FinecoBank Banca Fineco S.p.A.

Good afternoon, everyone, and thank you for joining our fourth quarter of 2023 results conference call. Adjusted net profit in 2023 reached a new record high and was equal to €609.1 million, strongly up about 42% year on year and by 54% excluding 2022 profits from treasury management.

Adjusted revenues achieved at €1,237.6 million, increasing by 30.5% year-on-year in mainly supported by net financial income, which is sustained by our clients very sticky and valuable transactional liquidity and by the solid growth both of our investing business, thanks to the volume effect and the higher control of the value chain by Fineco Asset Management. Operating costs well-under control at €298.3 million, increasing by 4.7% year-on-year by excluding costs related to the growth of the business.

Adjusted cost income ratio was at the very remarkable level at 24.1%, strongly improving year-on-year and confirming operating leverage as the strength of the bank. In 2023, Fineco achieved an outstanding commercial performance thanks to our organic growth strategy.

First of all we recorded and strong acceleration in our new client acquisition increasing by around 23% year-on-year and allowing the bank to reach the new yearly record in terms of new clients. Let me highlight that these remarkable acceleration is confirmed also in January, which recorded the second best month ever in terms of new clients for the bank and bodes extremely well for our future growth.

Second, our net sales confirmed to be very solid with €8.8 billion inflows in 2023 in January with net sales at around €4.6 billion of which deposits at minus €374 million as a short-term trade has deployed with liquidity to buy both equity and Govies for trading purposes. As a consequence, brokerage recorded a very strong month with estimated revenues at €16 million, 40% higher compared to the average revenues in the period 2017, 2019.

Assets under management net sales were positive at around €79 million. Despite that one-off €6 million outflows from insurance business and with Fineco Asset Management recording €153 million retail net sales, asset under custody was equal to €875 million.

Let me also add that we are in the process to launch new investment solution in February and this will be supportive for both volume and revenues. Further, our network of Personal Financial Advisors confirmed to be once again the leader in terms of productivity within the asset gatherers space, thanks to our focus for organic growth engine and Fintech DNA.

Our capital position continued to be strong and safe with the common equity Tier 1 ratio at 24.3% and a leverage ratio at 4.95%. Let me please underline that we are very pleased to propose to the next Annual General Meeting, a dividend per share of €0.69, increasing by more than 40-percentage year-on-year.

On the right hand of the slide, you can find the summary of our 2024 guidance, where we confirmed the outlook we shared in the last quarter conference call with a better mix, more in detail. On revenues, we expect them to consolidate in 2024 around the record level of 2023, with an improvement of the mix in favor of commissions, thanks to investing revenues expected to increase low-double-digit in comparison to 2023 with a natural market assumption.

Banking fees expected stable versus 2023. Brokerage, we confirmed for 2024 expected revenues stronger with a floor higher versus pre-COVID period.

On operating costs, we expect a 6% growth year-on-year in 2024, not including additional costs for both Fineco Asset Management and marketing expenses. We expect our cost of risk in a range between 5 and 10 basis points in 2024.

And finally, we expect in 2024, a growing CET1 and leverage ratio year-on-year. Let's now move to slide 5.

As announced, adjusted net profit in 2023 reached a new record level at €609.1 million in a very challenging market scenario with an outstanding increase by 42% year-on-year and by 54%, excluding profits from Treasury management realized in 2022. Revenues achieved €1,237.6 million, up by 30.5% year-on-year as we have been able to catch the strong acceleration of the structural trends in place.

The strong growth of our net financial income increasing by 75.4% year-on-year, supported by our high-quality and capital-light net interest income, which doubled year-on-year. Net commissions increased by a sound 5.2% year-on-year, mainly thanks to the solid contribution of our investing business.

As for trading profit, let me remind you that in this line there are accounted minus €7.2 million related to the ineffectiveness of hedging derivatives in accordance with the accounting standard IFRS9 compared to the plus €12.2 million in 2022. The value is influenced both by the spread between the Euro Short-Term Rate and Euribor and by the amount of the fair value of the derivatives.

Excluding this effect, the decline in trading profit is mainly related to the brokerage activity due to the lower level of market volumes. Operating costs at €298.3 million were under controlled, increasing by 4.7% year-on-year, excluding costs strictly related to the growth of the business, mainly additional cost of Fineco Asset Management to further expand its business and the higher control of the big achieve additional marketing costs to further improve our growth in cash flow strong momentum of the business.

Finally within our provisions we are accounting and one off effect due to Eurovita equal to minus €11 million related to the contribution to the rescue of the Company. Let's now move on Slide six for a deep dive on the performance of the of the investment business.

Investing revenues reached EUR329.1 million in 2003 increasing by solid 6.8% a year on year. Let me please remind you the great in the great quality of our investing revenues mirroring our transparent and fair approach to Alliance.

As a result our revenues are exclusively driven by recurring management fees. On the quarterly management the dynamics let me underline that we were affected by the negative market performance at the end of the third quarter which resulted in lower average volumes in the last three months of 2023.

Let me please underline that this set of results particularly remarkable given the more challenging marketing environment for the asset management industry. Also let me underline that the bank is going ahead with its plan to deeply reshape its products and services offered to better fit with the new context.

This will give our will keep more fuel to our growth that changing in the months ahead and will allow us to keep on adding new market share. Let's now move on to Slide 7, for a focused management company.

Fineco Asset Management is progressively delivering in having more control of the investing value chain. The contribution of Fineco Asset Management, to the Group assets under management net sales, is further improving regardless of the market scenario moving from 77% in 2022 to 118% in 2023.

At the end of December, the contribution of Fineco Asset Management, out of the total stock of assets under management of the bank, improved to 34.5% from 30.3% in the fourth quarter 2022. The commercial performance by Fineco Asset Management in 2023 has been outstanding, not only in absolute performance, down in the slide we are showing and benchmarking based on a suggested junior retail net sales as of December.

As you can see how our Irish company successfully delivered the second best net sales compared to the -- to the most relevant asset manager operating in Italy. These remarkable results despite the very challenging environment is due to Fineco Asset Management effectiveness in quickly developing the right set of products to catch what clients are currently looking for.

Let's now move on Slide 8 for a focus on Brokerage. Brokerage registered an excellent 2023, at €186.4 million, achieving a monthly average more than 35% higher, compared to the monthly average revenues in the period 2017-2019.

This confirming a structurally higher flow compared to the pre-pandemic levels, regardless of the market conditions. As a reminder, January recorded revenues of around $16 million of revenues, 40% higher versus the average of the period 2017, 2019.

Let me remind you that the growth of the brokerage business is driven by the contribution of three structural components. First, the line plus process of improvement of our brokerage business, thanks -- our new initiatives like the new platform, FinecoX, the new brokerage – the new brokerage current account and leverage certificates.

Second, the widening of our client base using the platform with active investor growing significantly in absolute terms. Third, we are continuously increasing our retail market share.

As you can see on Slide 9, all of this is translating in a very solid revenue generation regardless of the market context, delivering a far better performance compared to peers. Let's now move on Slide 11 for a focus on our capital ratios.

Fineco cost sales once again, a capital position well above requirements on the wave of a safe balance sheet. Common equity Tier 1 ratio at 24.34% and the leverage ratio is very sound of 4.95% while risk-weighted assets was equal to €4.73 billion, increasing due to the usual yearly update of operational risk.

Total capital ratio at 34.91% as of December 2023. As for the liquidity ratio, liquidity coverage ratio is at 823% and a net stable funding ratio at 378%.

While the ratio, high-quality liquid assets on deposit is at 68%, well above the average of the industry and position Fineco's the best positive applier, as you can see on Slide 12. Let's now move to Slide 14 for a focus on the acceleration of our commercial dynamics.

Let me spend a few words on strong acceleration of our client acquisition, which is even more remarkable considering the context and both extremely well for our future growth. As you can see from the graph on top of the slide, new client 2023, were 22.5% highest year-on-year.

These outstanding results have been achieved keeping our marketing strategy unchanged when it comes to new client acquisition and effectively translates in a quality and sticky client base key to grow in a healthy business in long-term horizon. Let me also underline the very positive further acceleration in January this year when we recorded the second best month ever in terms of new clients, showing once again that our most recent market initiatives are delivering.

Going forward, this will represent a very strong support for our future growth. As a reminder, let me also underline that we have recently improved the efficiency of our marketing hedging, thanks to our innovative and brand-new onboarding process.

On top of this, we are now leveraging on artificial intelligence and data-driven marketing, which are allowing the bank to connect with positive clients in a more personalized and efficient way, leading to a further acceleration in our client acquisition. Let me also quickly comment on Slide 18 as another key driver of organic growth is the best-in-class productivity of our Personal Financial Advisors helped by our Fintech DNA.

As you can see in the slide, the productivity of our network in terms of assets under management, net sales has been by far the best one within the sector. Let's now move to slide 19.

The granularity stickiness of our deposit base is confirmed quarter-by-quarter. Our deposits continued to be extremely granular with an average ticket of around €18,000 and median ticket of €4,800.

On top of this differently from other players mostly focused on brokerage investing. Our successful one-stop solutions relies on a fully-fledged banking platform with 50% of our clients crediting salary and pension with us.

Down the slide we show our usual breakdown on the deposit net sales where we once again saw 9% increase in the net new liquidity before investments. As you can see in 2023 the bank effectively collected €18.2 billion of liquidity coming from salary in pensions and €11.4 billion from net bank transfers.

After the expenses in cards, bills and taxes deposits were up €7 billion, once taking into account investments in assets under management and asset under custody. The final result is minus €2.1 billion of deposits in net sales.

On the graph on the right we confirmed the trend in terms of liquidity flows for cluster of clients. Clients with total financial assets up to €100,000 increased demand for liquidity in the bank.

And this is mainly is mainly transaction. On the other way the cash sorting process has been 100% driven by wealthier clients, which in the past accumulated excess liquidity waiting to be invested.

For private banking clients, the liquidity as a percentage of total financial assets is at 12% as of December close to the lowest that -- this is below the lowest level since 2015 suggesting that they are approaching what is structural flow. Finally, please note that the new clients acquired in this also brought positive liquidity.

Let's now move on to slide 21 for a focus on our guidance. Let's now focus on the -- on our 2024 guidance where we confirmed [indiscernible] we shared in the last quarter conference call with a better mix.

Revenues are expected to consolidate in 2024 at the record level of 2023. We've been in improvement of the mix in favor of commissions thanks to invest in revenues for which we expect a low double-digit growth in to respect the 2033 with a natural market assumption.

Banking fees are expected to be stable compared to 2023. Brokerage revenues are expected to remain been stronger with a floor.

In relative terms with respect to the market context that is definitely higher than the pre-COVID period. Operating costs are expected to grow at around 6% year-on-year not including additional cost for both finished asset management and marketing expenses.

Cost/income was hit comfortably below 30% thanks to the scalability of our platform and the strong operating gearing we have. Systemic charges for the year expected around €40 million which will be accounted in the first quarter of 2024.

On capital ratio we expect CET1 ratio and leverage ratio year-on-year, currently with the combination of both strong acceleration in the growth of the bank and distribution as of generous dividends. Our leverage ratio our goal is to remain above 4.5%.

On dividend per share we expect that hit increasing. Cost of risk was equal to five basis points thanks to the quality of our lending portfolio and we expect hitting a range between 5 basis points and 10 basis points.

Finally, we expect a robust and high-quality net sales, keeping our priority in direction of asset under management and continued strong growth expected for our client acquisition, as we are in the sweet spot to keep on adding new market shares. Thank you for your time, and we can now open the call for questions.

Good afternoon to everybody. A couple of questions.

The first one is a clarification on your guidance for revenues in 2024, when you said that you consolidate the 2024 level to the same record level of 2023. So that appears at the flattish revenues on a year-on-year basis with growing fees on investing and stable banking fees.

So shall we derive from this guidance that you could see the NII going down in 2024 vis-a-vis 2023? So that's my first question.

The second question is on the NII back with a more medium-term outlook, if I look at your Slide number 34, when you provide the details of your bond portfolio. I was wondering, first of all, if there is some action that you can implement to change the sensitivity of this portfolio to our -- to the rate environment that is implied in the forward curve?

Because I see that you have a lot of bonds with a relative long duration with actually a relative long maturity, which has a yield that is 100 -- below 100 basis points. So we have a lot of them expiring beyond the 2027.

So this clearly creates structural deflation to your NII all has been equal. So I was wondering whether there are some actions that you can implement to change your sensitivity here?

And secondly, regarding the floating leg of this portfolio, I see that the expectation for Euribor 3 months are incorporating a decrease between 100 and 150 basis points at year-end. So this is creating still a headwind to your floating rate portfolio going forward.

So I would like to know if you can have some counterbalance actions here. And to wrap it up, shall we assume that in 2025, will we see the bottom of the NII in terms of trajectory as equal?

Second question, if you can provide us a guidance for the sales net base of pharma. And the last one, on the cash balances of your private clients, I see them still in the region of 12%, which is still there for a couple of quarters now in a rate environment, which for those kinds of clients offer relatively appealing remuneration.

So was wondering whether you know what can you do in terms of action on the product or strategies. I tried to capture these assets into asset management products and avoided that not the appetite for plain vanilla product like government bonds is increasing.

Thank you.

Now first of all, let me -- because it's -- I'm trying to put together some of your questions because it seems that the most part of your questions are related to the evolution of the net interest income. So let me clarify a point that we -- because there is the reason why we are now guiding the market on the overall revenues is for a very simple reason because, first of all, there is -- so it's when we are guiding purely on the net interest income means to make a forecast and assumption on the level of rates, the timing of the change in the level of rates.

And clearly, we don't have the crystal ball for doing that. At the same time, it's pretty evident that considering the business model we have and so on, is a very clear correlation between the -- what the rates are going and all the other components of the bank.

So let me be even more precise. If, for example, the rates are going to be higher than the market is expecting, I referring presented the forward gold is reasonable to expect a positive impact on the stock of our liquidity, but we then probably end with lower volumes.

And probably somewhere a little bit of a headwind for the asset management business. And at the same time, probably it's going to be even in any case supportive for the brokerage.

If we expect rates going lower than the market is expecting, it's clear that we are going to have a negative impact on the stock of deposits, a positive volume effect on the deposits as well. And then even -- even stronger than expected impact on the asset under management and brokerage is going to do pretty well as well.

So -- and putting anything together, this makes us extremely comfortable in guiding the market on the bank consolidating in terms of revenues and the record level we reached in 2023. That clearly, we think it's an absolutely outstanding achievement.

So to give a perfectly precise guidance on net interest income doesn't make any sense if you're not attaching to this and foreign cost on interest rates. But this is up to you, because there are analysts that their expectation of rates.

And so you can circulation. My suggestion is not making the mistake to not considering that the full -- the full component of the bank because it's not just the net financial income moving, but it's all the other components moving together, so.

And regarding the -- if we have in mind to take some action for changing, which is our interest rate sensitivity. The answer is no.

We are not planning to take any action there. So our net interest sensitivity is going to stay in the region of €116 million.

And so this is not expected to change anytime soon, because we are not putting in place, for example, hedging and replicating portfolio strategies for a very simple reason because we have a different kind of business model respect traditional banks and so on. And so our goal is to run a completely safe business model.

And so clearly -- and moving forward, so this more or less is our comments on the net interest income. Guidance for the Fineco Asset Management net sales, also here we are not guiding anymore on volumes but we are guiding on revenues, because we know that there are also in this case bedding for that correlation.

For example, if we have rates probably going down as the market is expecting, probably we can expect a lower these investments on the insurance raptor and this positive for volumes and less positive for the margins. In -- if we have rates remaining higher, we can expect then these investments on the insurance raptor continuing, and this is clearly is less positive for the volumes, but more positive for the margins.

And the most part of the -- what is reinvested by this investment is captured by Fineco Asset Management. So this is the reason.

And so what we are -- when we are guiding the market, again, we are guiding on the -- looking to the overall expected change in the revenues generation that we are confirming that we expect in low double-digit growth of the revenues generated by investing. On the liquidity -- on the 12% liquidity to repay banking clients, this is a percentage that is expected to -- it's difficult to think that this percentage of liquidity moving even lower, because as we explained, these clients are starting on approaching what is real structure of physiological level below which they cannot.

The most part of the growth in our assets under management is going to be driven by the new acquisition -- the acquisition of new clients. The clients are bringing additional assets, because our private banking clients are not started yet, because we are continuously increasing the share of wallet of this client.

And as we explained in -- throughout the month of February, we are going to deploy a quite very important interesting set of new product solutions. They are expected to give a clear boost to the volumes on assets under management and the revenue and the margins as well.

We made one clarification on the NII, you mentioned €100 million to €116 million of sensitivity, which I take us for the usual 100 basis points rival because you mentioned this, right?

Yes.

Thank you.

Hi. Good afternoon.

Thanks for taking my questions. So, one, sorry to go back there again.

I just wanted to get some extra color on the assumptions that underpin your revenue guidance and the NII guidance more specifically. I appreciate that it's very difficult to foresee where the curves would be.

Can you at least give us some color in terms of what sort of deposit level you expect? Does you assume a stability?

Does you assume a further decline? I'm asking also because in February, now there's going to be another BTP placing by the government, which usually is a drag on liquidity for the system as a whole.

So I just wanted to hear your thoughts there. And then alongside that, last year, you launched this Cash Park initiative where you were remunerating part of the new liquidity coming to the platform.

Can you give us any color in terms of what sort of volumes are you seeing into this product? And more generally, do you see an increase in competition for new liquidity?

I'm asking because one of your peers in Italy has always been offering a very generous remuneration on your liquidity which arguably led to very strong flows. So I was wondering if you were thinking of doing the same.

So that's my first question. My second question was on capital.

You guide for another area of -- increase in leverage ratio. Can you give us any color in terms of what you plan to do when it comes to the AT1, which I believe is callable in December this year?

And then my final question was on the insurance products. Can you remind us how much AUM you still have in these products, which are in outflows?

And do you expect that eventually will all be invested and invested elsewhere. Thanks.

So, first of all, on the -- so let me give you a little bit more color on the assumptions behind the net interest income. First of all, as you can imagine, we -- the option taken by the government are not anymore a surprise for us because we know perfectly that every year, the government is going to take auction.

And so when we are giving the guidance, we are embedding expectation to have the government taking place at least three auctions. And usually, so one is in the spring time in this case, this is going to be at the end of February and ending at the beginning of March.

Then we expect another auction that is going to be probably -- is going to be by -- before the summer effect. And then there is going to be at another one during the fall.

And what we expect that is -- clearly, it's not -- we don't know exactly which kind of appetite is going to emerge by clients. It's clear that the more you have rates going down and they're always going to be depleted by clients for this option.

But overall, we are embedding conservative assumptions. And so we are embedding the expectation to replicate exactly what has been done last year.

And overall, in the guidance we were giving. There is embedded an expectation for steel declining deposit base throughout the year.

And so this is what we are embedding in our guidance. In -- regarding Cash Park, let me -- little bit make some clarity on the volumes impact on the P&L of the -- on the financial income, P&L of the bank and the rationale behind.

So the volume at the end of December was €700 million, the impact in terms of the financial income of the bank is as we had the opportunity to say several times also in the past, is completely natural. So there is no impact, not negative, not positive on the financial income right, for a very simple reason.

What we do is exactly more or less what we get in terms of marginal reinvestments we are doing. And the rationale behind is purely in order to add the full range of possible solutions of interest by our clients because we -- for us, what is important is not to lose our commercial traction.

So if we are in an environment in which everybody is offering term deposits, we have to offer them as well. Also in the case we are not considering this as the most efficient solutions for the clients.

And regarding the competition on liquidity, the competition is in place by many months. So now the impact that we are experiencing is absolutely stabilized, so there is not anything brand new.

And you are referring to an offer made by a peer. We have to remember that is an offer that is on a six month horizon.

And so what we are observing that is not really encountering any particular interest by our clients in terms of loss. And then on -- on the capital, yes, we confirm that we expect a growing both CET1 and more important leverage ratio.

And our plan now we are waiting for the green light by the ECB for and as soon as we are going to receive the green light by the ECB, we are going to recall the AT1 that is going to expire by December, and we are going to go on the market. On insurance, we have more or less still €14 billion of net assets under management there, of which the largest component is represented by unit-linked.

And then what is the component that is -- on which there has been -- we had this investment is on the so-called gestioni separate ramo primo [ph] -- and the remaining component is more or less €4 billion -- €4.7 billion. And -- but we had the opportunity to explain several times.

For us, this investment by this product overall is more positive than negative for a very simple reason because these solutions, again, I'm repeating the ramo primo [ph]are the solutions catalyzed by start by the lowest margins for the bank. And so the more we have client is investing by these products and the more we are able to capture this with other solutions and the better is for the margins.

Thank you. Very, very helpful.

Just two small clarifications, please. So one, I think you mentioned that you still expect a decline in deposits.

I just wanted to understand, do you expect a decline in deposit on those months where there's going to be the BTP placing or for the year as a whole, 2024 versus the current deposit level? And related to NII again, on the cash park initiative, do you plan to continue with this initiative?

I know you lowered the interest rate, but is it going to remain? Or at some point, you might consider taking out the market?

Thanks.

So first of all, let me make a clarification because we are observing that there is a kind of obsession on the evolution of deposits month-by-month. Let me remind the point that probably it seems that it's not probably it's is our fault.

We have not been able to be -- to explain this correctly. So Fineco is running what is, by far, the platform of reference in Italy for brokerage.

So we are in control of 27% of the overall volumes of the Italian stock exchange. And more than 50% of the retail clients that they are trading on the market, trading means clients that they are operating with a short-term horizon are using our platform.

So this, by definition is driving completely unpredictable short-term impact on the liquidity of the bank. Because when there for example, as we explained, when the market, for example, when you have hills going up -- and for example equity is going down, by definition of clients for trading purpose are bank and they are doing exactly the opposite when, for example, you have the market reversing.

This is completely unpredictable because, for example, the clients in January, the reduction of deposit is being completely driven by this kind of clients. So, these are traders that they are, for example, they put long-hand maturity on bonds with the idea to take a profit and as soon as we have a decline here.

Same story, the way the clients are trading on stocks and so on. So this is completely and this kind of liquidity can be reversed anytime in any moment.

So this is the reason why it is completely misleading to try to get a kind of idea of the future evolution of the bank for all the year by one single month is completing the same, particularly when you're referring to a bank that is running. What I'm saying is the platform or reference in Italy.

There is no other country in Europe which there is a single player that is in control of a such a huge market share. So this by definition is driving the liquidity, but its driving as well commissions on brokerage for example.

And this liquidity that has been exiting can be reversed tomorrow morning, but we cannot make a forecast, honestly speaking. So this -- and we think that is completely is completely waste of time tried to -- and the example is being last year because the market was expecting -- we were projecting €4 billion more than €4 billion of the client deposits.

At the end of this story, the decline has been pretty much in line with what we would expect it to happen. The temporal dimension cannot be forecasted for a very simple reason because the clients are training and so we are very happy to have a very powerful brokerage platform.

So because now it seems that there are brokerage platforms is minus. We don't think so.

We think that is a great value in our business model. Because we sometimes we -- there has been a member analogy saying I think that the affinity creates a problem because the brokerage platforms to the clients are buying and selling BTPs.

This is the first time in which we have something that is bringing an incredibly powerful and valuable business is a problem. So this is my personal point of view.

So everybody has the right to have its own. And the cash back, yes, we're going to continue because it's natural.

It's going to support our commercial traction. And it's going to stay on the shelf until that makes sense so tomorrow morning, we have the rates going back to 0 or negative, the cash back doesn't make any sense.

At the moment that makes sense and so its going to stay. And again, I'm repeating in order to be completely clear at this point, it’s completely natural potential impact on the bank on the financial income and P&L.

Yes. Hi.

Good afternoon. Mr.

Alessandro, three questions. I understand you don't want to share with us a guidance on asset management flows, but you improved investing revenues from high single-digit to low double digits.

So I was wondering if you can at least qualitatively comment on the quantitative aspect related to flows versus margins. So you expect an improvement in margins.

And linked to that, the new products you mentioned that are going to be presented in February are then equity, fixed income, if you can give us a bit of color to understand also the trajectory in terms of margins. Second question is, if I understood correctly, you provisioned at €11 million for Eurovita.

Can you tell us that technically what happened here? I think you are not in kronas.

So what are these 11 million related about? The third and last one is on the new floor of 4.5% leverage.

I understood also that the trajectory in terms of deposits is going to be a bit subdued during 2024. So the 4.5 seems cautious, or if you can tell us why you defined your appetite at this level.

Thank you.

So regarding the qualitative comment on the asset under management, first of all, clearly, our suggestion is not to take any kind of misleading conclusions by the flows of January, because January is the definition amount which the activity is extremely, we have just a couple of weeks of activity. And it depends in which kind of the cycle you are in terms of your new product.

So, for example in January we had the spike of rates that has made the solutions we had not any more competitive for the client. And so now we have this kind of gap at the moment.

And part of it is the new pipeline of solutions that is coming, so throughout the month of February, we are going to have the brand new solutions completely perfectly aligned with the new market conditions. Second we are going enter in a new segment of activity that is going to be very interesting both in terms volumes and margins.

We are going to give more color on this as soon as we have -- we are going to launch the solutions and – but this is going to -- and new products are a blend of fixed income and equity solutions as well and so on. But overall the reason why we are absolutely relaxed on the improving the guidance on the asset under management is exactly for these reasons because volumes are going to be here and also we have a quite very interesting pipeline of solutions that are going to be also accretive in terms of margins.

And at the same time, we are extremely happy to see that the percentage represented by the Fineco Asset Manager Solution is continuously on growing. But this is not driven by, because we are forcing our financial plan is doing that, but this is driven by the capability of Fineco Asset Management to just to deliver properly and with the right timing, the right solution.

And this is exactly what is going to be to happen throughout the month of February. And on the €11 million, this is part of the overall arrangement that has been taken to rescue the company.

This is not -- clearly this embodied -- all the distributor embodied involved in the process. So this is part of the agreement.

So there is anything particularly strange in what sense. And the 4.5% level, yes, it's -- you are right, it is cautious because the minimum level is 3%.

But as we have -- also always our case, we want to keep on running a business characterized by being incredibly robust, safe, and so we want to keep margins so.

If I may, are you planning to increase the percentage of entry fees that are at the moment are very low? And secondly, if I'm not mistaken, you will recall the AT1 and you will roll it over.

So is there any chance you might use this extra 0.5% for shares buybacks? Thank you.

What is -- so our level of entry fees is incredibly low, because we think that to run a business in which the entry fees are -- the largest part of what you're doing is clearly not -- we think it's not a good choice, it's not sustainable. At the same time, to run a business in which you have just 1% of your revenues represented by entry fees, probably it's a mistake as well.

So, it's possible that we can have some increase of these entry fees going forward. And on the AT1, so another very important element that is pretty clear that the bank is going to keep on generating continuously new organic additional capital.

And throughout the year, we are going to be a little bit more precise regarding what we plan to do looking forward with this structural organic generation of new capital.

Thank you.

Hi. Good afternoon.

A few questions from my side. One is, again, on the net sales.

I understand you don't give a precise guidance there. But how can we compare with the €8.8 billion you made in 2023 overall?

I guess the mix is difficult. But maybe overall, you can give us an idea of what you think about the starting point of last year in terms of overall volumes, also considering that you are accelerating in the acquisition of new customers, a great number in January.

In general, I would like to understand if you expect this trend to continue? And which kind of clients are you getting, are similar to the past, are there any difference in terms of how you source the clients or the quality of the clients, the assets they can bring just to kind of understand what this contribution could look like in the future?

And the second question is on the provisions you provide indications on the systemic charges for 2024. Is that right to expect a significant drop in 2025 onwards from what we know right now about these schemes?

And basically that's it.

Thank you. So on the net case and never we gave a precise guidance.

It's clear that the very strong acceleration we are experiencing the client acquisitions. Clearly, it's boding extremely well going forward.

By definition, when you have a new client entering the bank, there is a season period that you have to go through in order to have the client exploiting the full potential. But again, if we always, the most important driver in the growth of the bank has been the capability to increase the market share, the capability of acquiring clients and considering what's going on, this is making us extremely positive on the future evolution of the next phase of the bank, really.

And so this is the only thing that we can see. Then, to tell you exactly the perfect timing of which this is going to be translated immediately in the safe, it's practically impossible, but it's clear that by definition, such a powerful acceleration in the client acquisition, by definition, is with a certain kind of temporal legacy generating a strong growth.

This has been always the story and so this is going to be the same case also now. The kind of clients we are getting, this is an extremity, we are keeping on getting a very important component of high quality clients because there is an increase in acquisition in all the clusters.

It's very important to consider that Fineco is a business model able to fulfill the need of an extremely broad range of clients. So we are accelerating in the acquisition of the high-quality clients, but this is in the case, I don't remember in which part of the presentation he is, but there is a page that is pretty clear, is the progression we have on the private banking activity.

Fineco is, we are growing at a speed that is nearly four times the speed at which is growing the industry in the upper end of the client. So we are confirming that in this acceleration of client acquisitions, we are accelerating as well in the high quality clients.

At the same time, we are also accelerating in acquiring, for example, young clients because we try to work also on the future of the bank. So the new trading account with less features and so on is working incredibly well.

So it's an extremely very well-balanced growth in terms of kind of clients that we are taking on board. On the systemic challenges, I'm leaving the floor to Lorena, I want to see her point, we want to be a little bit more precise in what we can expect on the systemic charges going forward.

Thank you, Alessandro. But it’s quite easy to answer to this question because, yes, for 2025, we expect a significant drop because Single Resolution Fund and a Deposit Guarantee Scheme, a rich scheme target level, Single Resolution Fund at the end of 2023 and the Deposit Guarantee Scheme at the end of March 2024.

So going forward, we expect potential contribution relating to the increase of Deposit Guarantee or related to bank fee, but we expect a significant drop.

Thank you very much.

Hi there. I just have two questions please.

So the first is going back to the CashPark information. I was just wondering, so you said it has no cost to the business which I get.

Do you see any potential upside from ability to convert these deposits into higher-margin AUM? And then the second question is on dividend per share.

So, you talked again about an increasing dividend this year, but there was quite a substantial increase clearly on the '23 dividend over 2022. So could you just quantify what the increase should we expect it to be a similar quantum slightly lower?

That would be great. Thank you.

Regarding CashPark. So we are paying the CashPark information is to keep perfectly at aligning our commercial traction.

There is absolutely is competing networks in terms of impact on the financial income of the bank because what we see is what we get. So it's going to be because there is no kind of a misunderstanding on this point in terms of usually decline in the sense that the potential for converting these in assets under management went to be there to be very, very frank and honest.

Usually in terms of transformation asset under management, there is a much bigger potential in the bonds. So in the asset under custody, but this is the history.

So by definition, as soon as, as much as we have a decline in rates. That is exactly what the market is expecting because it seems that the conversation is mostly focused on net interest margin.

So it seems that everybody is convinced that the rates are going to go down and the story is exactly always the same as much as you have interest rates going down. The huge potential in terms of the huge -- the bigger amount of fuel for the asset under management is going to be driven by the asset under custody, not by the CashPark, because CashPark is mostly attracted the interest by clients with a short time horizon.

So to speak to transport the CashPark investment in assets under management, yes we can do that, but we have to be extremely realistic, the person that you can expect transforming us and the demand is pretty small. On the contrary, the percentage that you can expect in 2024 from the asset under custody and assets under management is by definition is huge.

And this has been -- so the story is going to be repeated during the process of declining rates in time that -- started in 2000 -- starting 2012 going to and dealer a couple of years ago. This has been one of the biggest driver of the growth of the assets under management industry.

And this time it’s going to be repeated. So if you want to look to the potential for asset under management look to the asset under custody.

So this is the reason why we are extremely pleased by the huge detailed a large increase we are experiencing through our platform on asset under custody. And on the dividend per share, clearly it's not reasonable to expect that, because we increased our dividend per share by 41%.

So if your question and I want to be sure that I got correctly your question, is your question, if we can expect to increase by another 40% in 2024, then the answer is clearly no, because it's impossible. But we expect it to increase further our dividend per share going forward, yes.

Okay, great. Thank you.

But in terms of absolute -- so in terms of a euro cents increase, a relative increase?

Never we have given such a precise guidance. What we can say that we are on track for delivering in higher dividend per share respect at a record level we delivered in 2023.

Okay. Thank you.

Yeah. Sorry, can you hear me now?

Yes.

Sorry, sorry. I'm starting again.

The first question is on the redemption of money from the policy where you're losing it after the redemption in December, or redemption in January. This morning you have to park it on the current account of clients or being part of that is being deployed in other investment.

And the second is on your guidance on operating cost for 2024, do you still basically keep 6% growth plus other industrial growth? Does this guidance include the effect from the new collective labor agreement for their banking employees?

And the last one is a clarification on the other 81 bond that you got, the [indiscernible] bond that was not recovered yet. Do you plan so to not recall it is bonding, not even in June and not even in December, so nothing for this year?

Thank you.

Regarding the redemption of money from Eurovita, let us say the largest, faster has been invested by the clients, yes. So there is -- what is still remaining on the current account is relatively small.

And on cost, yes, in the guidance expected impact by the new contracts for the banking employees. And on AT1, I'm leaving again the floor to Lorena.

So Lorena if you want to…?

Yes. So regarding AT1, we are deciding not to recall the €281 million private placement given the market conditions, and also, please note that in any case, each six months there are call dates giving us plenty of flexibility.

Regarding the €300 million of AT1, that will have the first call date on December 2024, we have included the AT1 in the EMTN program in order to have more flexibility in terms of execution, in terms of amount to be issued. And because the EMTN allows to speed up the issuance process.

We are waiting, as already said by Alessandro, the approval by regulators for a potential call during 2024, and we will evaluate what to do according to market conditions.

Thank you.

We have not decided yet what to do. We will evaluate according to market conditions.

Hi, everyone. Just following up on your point that you made before the lower rates can trigger AUC to move towards AUM.

So my question is, given that it is unlikely that we go back towards zero negative rates where we were pre-COVID. Do you think eventually, I mean, there is the risk that clients will always keep higher AUC and that this reversal will eventually, could be postponed essentially indeterminately because how low these rates need to go to push clients out of AUC?

Do you need them to go back to zero? Because my understanding is that we will always be around 200, 250 basis points.

I'm talking about the short-term rates, like three months Euribor. What are your thoughts on this?

Thank you. This is a very good point, because I did again, I'm not telling you anything that is particularly strange.

I’m just, it’s a story repeating. So just looking behind, we can have a more or less an idea of the behaviors of clients.

So the propensity of clients in investing in assets under custody [ph] in bonds and so on tends to decline quite rapidly the more you have rates going down. So it's not a linear process.

Usually there is a kind of trigger a level of shorter rates below which the appetite by clients for buying bonds and gold tends to go down quite rapidly. And the trigger level is when you have shorter rates in the region of 3%.

As much as you move down below 3% historically, the appetite by clients for buying bonds is declining quite rapidly. And – but I'm very pleased to hear that is on the same line when we are listening some comments made by the CEO of Intesa that is being always extremely vocal to say that this is going to emerge as the by far the biggest opportunity for the industry going forward.

So this is the reason why sometimes I'm a little bit confused when I'm seeing that everybody is when you are looking to the overall curve and say, come on we have rates going down, and this is going to be a problem on the net interest income without realizing that this is going to emerge as the restart of the golden age for the Asset Management team is the asset gathering industry. But based on our experience, the story, usually the trigger level that it makes really the difference, when you have rates moving in the region of 3% and lower.

You will need to have rates going down this year.

All right. Thanks a lot.

So it's very interesting. So let's say your level and the sensitivity level starts let me say 3%...

Also without going back too much, if you look to also when there has been the acceleration of what has been called the cash stocking process is because the cash stocking process has been relatively stable until you have rates between 2.5, when you have the acceleration of rates above 3% that this has happened during the end of 2023, the beginning of the end of 2022 at the beginning of 2023, then we had the sharp acceleration by the clients. And the same story is going to be repeated.

So if the market is right in what is expecting, so rates going down below 3% level is practically sure that we are going to expect a big jump by the -- on the asset under management business.

Thanks a lot.

No, thank you to all of you for the -- for attending our conference, and particularly for the extremely interesting questions. And as usual, now we are starting by now we are available for moving through deep dive more colors, more numbers and so on.

So thank you again...