Good afternoon, and welcome everybody to our full year result presentation. We're pleased to report record earnings both on a reported and adjusted basis, double-digit growth compared to last year. The business factoring lending has shown a consistent and strong growth throughout the year, and we closed the year with our loan portfolio that grew 45% year-over-year. That coupled with the dynamic of interest rates, the reset in the NPI statutory rate, which will kick in the 1st of January. That has kicked in in the 1st of January of 2023, gives us a significant interest rate upside, which is still unlocked in our reports.
As we have indicated to the market, we have changed the accrual method for the recovery cost price, and for the recovery rate of the NPI, on the 31st of December of this year. That together with other items has generated a EUR 100 million capital one-off at year-end 2022, giving us also a further boost in increasing the yearly profits from 2023 onwards. We closed the year therefore with a very strong capital ratios. We are at almost 17% of core equity tier one and at 22% in terms of total capital ratio, well in excess of our 15% total capital ratio target, which is what we set for the payment of the dividend.
Those ratios do not include the dividends for this year, of which 68.5 we've already paid in August, and the final EUR 77.5 million tranche will be paid in April, following the approval of the GSM. As done last year, we will pay an interim dividend in August based on the first half of the year results. This ability to pay out large amount of dividends to the shareholders brought the total payout since IPO at EUR 650 million, which is more than three-quarters of the IPO market cap at the time.
What we've seen, and what we've just described has pushed us to increase the net income target for this year from EUR 170 million-EUR 180 million, which was in our 2023 business plan, to EUR 180 million-EUR 190 million. We will set new medium-term targets when we will communicate the new strategic plan of the bank before the first half results. We clearly are happy with the results that we have delivered, particularly on page three, if we look at what has happened in the world in 2022.
Clearly, when we entered the year, we did not expect war to break out in Europe, a shock in interest rates or inflation, and a shift so sudden in the monetary policy with a strong tightening in the end of cheap money for the banks. Volatility of spreads has also increased.
That is reflected in a tough performance for the equity market. We continued in that difficult environment for the economy to deliver a strong result with a return on equity which is above 30%, strong capital ratios, growth in the loan book, higher targets for this year, and a good performance compared to the market in 2022. Not forgetting also the high payment of dividend we deliver to the shareholders.
That it's a testimony to what we've continued to indicate to the market, which our business is actually not correlated to the economy. It actually tends to perform quite well when things get tough around us. The performance of the business on page four, if we look at the segment reporting, has been overall strong. Given the way we captured the synergies of DEPOBank in terms of cost, operating cost and funding cost, we've seen a strong growth in the corporate center.
That's because of the way we transfer money between division. In general, we're quite pleased on how the businesses have performed one by one. Giorgio will walk you through the performance of each individual line shortly.
We've highlighted in this chart also our performance in terms of cost income, because it's a testimony, the drop from 54% of last year to 44% this year of our ability to grow the business without adding significant incremental cost to do that. Those are the results. If you look forward, we wanted to give you a sense of the opportunity we see ahead of us.
First of all, in terms of the interest rate environment. We always said that we have a liability side that reprice faster than our asset side, but our asset side repriced at two levels because we can charge on our factoring portfolio two parties, the seller, the receivable, and the debtor. Therefore, when those two effects catch up, we have clearly a strong boost in terms of our net interest income.
We've seen a growth in net interest income of 20% year-over-year, which for the reason I said before, is mostly concentrated in a corporate center for our internal transfer pricing, and we expect to have strong growth this year as well. First and foremost, the change in the NPI rate, which moved from 8% to 10.5%. If you include the recent increase in the ECB financing rate, it's already implicitly set at 11% starting from the first of July. Second, we have our held to collect bond portfolio, which resets at six months, and so that still has to benefit from the increase of the Euribor 6 months over the last few months.
That will drive on a run rate basis, increase in earnings for this year. The repricing discussions that we have with our customers who are seeing a clear increase in the interest costs that are charged to them on various forms of financing.
On top of that, clearly, we have the loans growth of the portfolio. If we look forward in 2023, and more so in 2024, we should expect those effects to continue to drive the performance of the business. On page six , as I mentioned before, we have adjusted the NPI rate of accrual, given the strong performance in the last few years. We did not justify the previous level.
And we also have, as mentioned in the presentation three for the third quarter results, moved to an accrual accounting also for the recovery cost, for the famous EUR 40 per invoice that we can charge a customer, debtors who are late in paying those invoices. That has generated EUR 100 million of positive capital, one-off at year-end 2022. Capital that we're keeping in the business, gives us a bigger capital buffer, includes the ability to continue to pay dividends until we deplete that capital at 100%. The second effect has been the increase, as they mentioned before, on the NPI rate.
Those effects, together with, on the negative side, the impact of the Arca exit, the time lag on repricing of factoring some cost inflation, brought us to reset the targets for the 2023 adjustment income at EUR 180 million-EUR 190 million.
As I said, we give the targets for the years ahead once we approve the strategic plan in the spring, summer of this year. Overall, a positive result for 2022. A strong outlook going forward, and we're quite positive on the future that is ahead of us in the business. With this, I conclude my presentation. I leave the floor to Jojo to go through the details of his business life.
Thank you, Max. Good afternoon. We are now at page seven, starting from the factoring and lending the KPIs. As you can see, in the slide, and particularly in the box of the loans and receivables, you can observe the increase, especially in Italy, in Spain, Portugal, Greece, and also in France, in terms of growth of the loans, and also in the growth of the volumes of this year. Going to the next page, at page eight, we have for the factoring and lending the profit and loss, a good result despite the delay in the pricing and the delay on the NPI rate reset that started from the first of January 2023.
The net interest income increased by 3% year-over-year, considering the refixing of the NPI starting from January of this year, the maturity commission repricing that will deploy a positive effect starting from 2023. On the other side, the liabilities that repriced upfront. We have a net NPI overrecovery and also the recovery of the so-called EUR 40 that perform strongly during the year. Also, we put a lot of effort on maintaining a high level of cost, also considering that we increased some cost for the legal actions. On the other side also, we have to consider that the net provision increased due to some private exposure that we had in Poland.
Going forward to the security services business at page nine, we can see in the slide, we have the net revenues that are down compared to the last year. This has been driven by the exit of Arca occurred at the 1st of November 2022. We put a lot of effort in containing the cost derived topics and D&A that are down by 45, 14% year-over-year, due to some contract renegotiation and also some cost reduction initiatives that will continue also in 2033. Also, we have to consider that the depositary banks asset under deposit are down, including Arca compared to the last year.
Excluding the Arca effect, the difference is positive compared to the last year. We have also positive outlook going forward because of some change in laws, in particular, from 2023 on public administration employees will be a silent constant in contribution to security-Supplementary pension funds, as highlighted in the box in the right of the page. Also that will be mandatory of depository services for Cassa di Previdenza starting from 2024. We are acting, we are putting the actions in order to acquire new customers in this business.
For the payments that we have in slide ten, the profit before tax is stable, but we had a strong growth in deposits that partially compensated the drop in deposits coming from the security services. The performance of the payment business has been confirmed very positive also for the last for the last year. Going to page eleven. Corporate services, as highlighted before, the funding synergies are concentrated in corporate centers, thanks to the transfer pricing mechanism.
The net interest income increased significantly compared to the last to the last year. This has been made thanks to a better deposit spread, higher transfer pricing because of higher interest, and also the increase of the revenues coming from the held to collect portfolio with the floater rate.
Also, another effect of the synergies is related to the direct topics that has been contracted by 15% year-over-year. As a result for the asset and liability structure that we present at page 12, we have a solid asset and liability structure. We didn't have any kind of funding coming from ECB that would be refinanced in the year. We are quite positive on that side. We have a strong SCR ratio and NSFR ratio that are under control. Also the leverage ratio that in the end of the year is at 4.6%.
In the last quarter of 2022, the Euro cost of funding is 40 bps lower than the WIBOR, is a positive result compared to the third quarter of 2022. As said before, we have and as always, we have at page 13 the asset quality that has been maintained stable compared to the last quarter. Also considering the increase that we had in the past due. The cost of risk for the year is at 11.2 bps. It has been mostly driven by some specific provision in private exposures in Poland.
We have also to consider that our NPLs are mainly towards the public administration, so are classified as NPL, but the real level of risk is quite, is very low. At page 14, we have our capital ratios that we can consider it as a testing class. We have EUR 200 million in excess of capital, considering our target of 15% that we have for the dividends. The CET1 ratio is at 16.9%, and the total capital ratio is higher than the 22%. On the right side of the slide, we have some highlight about the dividends.
We are going to pay for the whole year, EUR 146 million, that including the 68.5 that has been paid in August and the 77.5 that we are going to pay after the general assembly. We are confirming the interim dividend at the end of the first half of 2023. Starting from the IPO date, we have paid more than EUR 600 million in dividends. That is the 77% of the market cap that we had at the IPO in 2017. Now I leave the stage also again to Max Belingheri in order to conclude this presentation.
Thank you, Jojo. We conclude the presentation of a strong set of 2002 results, and with a lot of optimism looking ahead of us. I leave the floor for any questions you might have for us. Thank you.
We will now begin the question and answer session. To ask a question, you may press star then one. The first question comes from Antonio Reale with Bank of America. Please go ahead.
Hi. Good afternoon, everyone. It's Antonio from Bank of America. I have three questions, if I may, please. The first one is with respect to your net profit guidance for 2023, the EUR 180 million-EUR 190 million. I understand you'll present a new business plan later this year. Given that you've provided a new guidance, I'd like to understand what's included in those numbers, particularly by touching on four points, please. First one, what level of interest rates have you assumed in your guidance? Secondly, what deposit beta have you got in? What percentage of rate hike do you expect to spend to increase your funding costs? Three, what are you factoring in in terms of volume growth?
I think your old plan was at 10% growth annually.
Growth could be higher than that. Lastly, any benefits from the EUR 40 overdue invoice that you have included in that guidance. If I remember, you had additional balance sheet, off-balance sheet reserves, which I think with the 50% recovery could be even more additive to your capital. I'm more interested on the P&L contribution that you've you expect for this year. My second question with respect to your competition. I've seen with some surprise a significant U-turn from some of your historical competitors in the Italian factoring business. I think that's on the back of regulatory changes, particularly related to the past due reclassification.
Some of these banks historically have had allocated quite a lot of capital to fund growth and gain market share. I think if confirmed, it will be an important change. I'm wondering, you know, to what extent on a public forum you can explain how these regulatory changes affect BFF, and how do you understand it affects your competition differently to the way it affects you. My very last question is, you know, we are a year-end, so a question on capital return, which of course, is a key part of your equity story. I wonder how are you thinking about your payout and the mix between cash dividends and share buyback going forward? Thank you.
Antonio, thank you for the questions. Let me start from the bottom and then move back to the first one. In terms of year-end capital return, we continue to have the same dividend policy of paying out the adjusted earnings of the year until we get down to 15%. Clearly by having had EUR 100 million of one-off step up, we've moved up the bar, which means that we can continue to pay at that level for a much longer period of time. It gives us the flexibility to continue to grow the business without much thought around that.
In terms of share buyback, we actually need to get the approval from the regulator, it's a process that takes quite a bit of time, it's 90 days on average. You saw that we announced a small buyback. It got authorized by Bank of Italy for EUR 2.3 million to cover our needs for the remuneration policy. It's not as a flexible process as one maybe would like in an unregulated business. We probably continue to pay with cash dividend at least for now. In terms of competition, we commented that in the past, the new past due regulation has been in place for a while. Bank of Italy has kept updating the guidelines to follow that, most recently in September.
We welcome the clarification because what happened is that in the discussion with them, they had taken, well, the same positive restriction, that they had in September, but it was not communicated to the market. We were, if you want, at a disadvantage versus others. I think what others might have found is that their interpretation of the regulatory direction was more lax than the regulator would allow, and that has might have caused them some problems. We think there's probably, there are probably other people out there who are just dealing now with the fallout of the, if you want, of officialization of what the regulatory thinks. For us, it has been crystallizing what we've been prepared for a while, in a very restrictive way, I have to say.
The knock-on effect for others has been severe because of this thing, probably different level of interpretation. On net profit guidance, there are a lot of moving parts. As you know, we have the impact of the loss of the of Arca. We have the delay in repricing.
We're in a rising interest rate environment. We have, we always are playing a bit catch up with rates. In terms of level of interest rates, we've assumed what the market is pricing in at the moment. If you knew any better, we would be richer and in different business. We simply follow what the market price is in.
On deposits, We have still a very good loan-to-deposit ratio, which we have actually flagged in the presentation. We are at 76% loan-to-deposit, contrary to other specialty banks, who maybe need to refinance their TLTRO. No, we don't have that problem. We have enough deposits engine to be able to grow those deposits at a cost which is not that far from the cost of the repos. We can actually grow the deposits ahead of the needs of funding, simply by substituting repos with deposits. On volume growth, we have indicated the 10% long-term trend.
That is really a function of what the market takes, we see opportunity to grow, but we're always cautious on what we think we can achieve. On the EUR 40, even there, that's a function of how many invoices, and not even the amounts, how many invoices are physically late. We've taken, I think, a reasonably prudent view on how many of them will be paid late, so to not to have a negative surprise.
We think our net profit guidance is solid. We give, I think we'll give, in the second quarter before the disclosure of the first half result, the guidance, medium-term guidance for the group, which will clearly include the effect of the stabilization of the rates, which should benefit our profitability going forward.
Great. Thank you very much.
The next question comes from Giovanni Razzoli with Deutsche Bank.
Good afternoon to everybody. I have three questions. Actually, I apologize, the first one is a little bit, you know, complex or simple if you want to. Basically, if I look at your new 2023 net income guidance of EUR 180 million-EUR 190 million, I compare that with the EUR 170 million-EUR 180 million of the previous plan. We are basically not comparing apple with apples because we do have three significant positive elements, if I'm not mistaken. We have a higher recognition of RPI from 45%-50%, a significantly higher policy rates, and the new recognition of the recovery cost.
While against this, we do have as a main headwind, we have the termination of the contract with Arca and a little bit of inflation. Plus, we do have the fact that in the Q4 you have already flagged to have front-loaded most of the cost of funding in your, in your NII. I would have expected a more significant increase in the profit guidance vis-à-vis the previous one, given the material change in the assumption that you have made and the much better and favorable rate environment.
This is my first consideration. Shall we assume that the acceleration of the profit should materialize mostly in 2024 vis-à-vis 2023 or shall we expect a more linear acceleration, you know, just as a back of the envelope indications? Another very quick question.
I think that the new business generation in Italy is slowing down to something by EUR 1 billion, if I'm not mistaken. I was wondering whether, you know, there has been some, what are the feedbacks that you can provide us in there. The last one, if you can give us your sense about the possible change in the split payment. We are approaching the termination of these regulations. Any sense of what could be these change in the future? Thank you.
Let's start with the short answer. Split payment is not in the extension is not in the budget. We don't have a signal that it will be extended. However, we didn't have a signal in the past. It did not get extended. We took a prudent approach even on that, in that respect in our planning, assuming a certain probability that it will get extended and a certain probability it will not get extended. To remind everybody, it means that basically our volumes and balance sheet in Italy increases by 20%. That's quite material, but it's not set in stone yet. We tend to get clarity as much as possible and as early as possible.
On new business growth, in Italy, look, it has been, I think overall a quarter where we had a less of a peak overall across many markets. It depends on also on the, on the preferences of customers. Clearly increasing interest rates have made people to adjust the difference in the choices they made with the year-end cleaning up of the balance sheet.
If you think about large corporates particularly, what happens, they have often objectives of P&L and of working capital of net debt. If you have a shock in interest rates as you've seen, and prices become steeper, you may be more inclined to hit your P&L number instead of hitting your working capital number. You rebudget for the following year knowing where the rates are.
That's part of the effect. On the target, let me go through the comments you gave. First of all, on the conclusion, yes, we expect, as I hinted during the presentation, an acceleration in 2024 simply because of this lag effect in repricing the assets, which reprice twice compared to the repricing of liabilities. In 2023, we are still in a rising interest rate environment, the deferral effect is clearly there. Even more in the year ahead, given that we are going to accumulate more RPI of balance sheet at a higher rate, and therefore the growth of the off-balance sheet fund will go faster, and therefore the deferral of the income will be even faster.
Now we're clearly piling up, piling up value for the shareholders in the year ahead. 2024, with the forecast, current forecast of interest rates, we expect interest rates to be stable and then maybe decline in 2024 should be a quite a strong, quite a strong year. On your comments on 180, 190, maybe a couple of clarifications. First of all, we've changed the LPI recovery rate at 50%, but we also have lengthened the timing, the expected timing of collection to 2,100 days. That's very prudently because it basically incorporates some of the delays we have seen through the COVID experience. The net effect of the two is basically zero. Huh. We, we don't really have a huge benefit there.
In terms of the increasing rates, let's not forget that we have still EUR 1.9 billion of fixed rate bonds that yields 35 bps. Clearly that's a drag on our P&L, but it will be reabsorbed over time. Elke, you mentioned inflation. We tend to keep it under control, but it's there. Look, there is the repricing versus volume trade-off, where we want to make sure that we reprice on, well, on one side, but we don't want to lose volumes because volume generates not only the income from the customer, but also the income from the debtor. That balance and all the other considerations push us to give the targets we have given this year.
Thank you.
Next question comes from Simonetta Chiriotti with Mediobanca. Please go ahead.
Thank you. Good afternoon, everybody. Two questions from my side. The first one is on the loan book that increased 45% to EUR 5.4 billion, so well above expectations. This loan book includes some items that were not included maybe before. Is it possible to know which is the factoring loan book, and in particular, which is the part of the loan book that on which you earn LPIs? The second question is on the repricing. The growth in maturity commissions, I suppose that conversations with customers have started for some time now. If you could give us an idea of which are the reactions of customers, how this campaign is progressing. Thank you.
Well, the campaign is progressing. We're making, I would say, good progress, also with some of the large, some of the large customers. We're actually not winning the sympathy prize of the year. No, everybody can see from his Bloomberg screen where interest rates are today, and where they were yesterday. It's not an Italian problem, it's not a bank-specific problem, it's a market, it's the market overall moving up. Those leads to some tough discussion. It's also moving, in a number of occasions, to an extension of the contracts in exchange for the repricing, which for us is actually quite beneficial, because we lock in customers for longer on the back of a positive repricing.
In terms of the loan book composition, we haven't actually added other components, to be clear. What you see in the footnotes, it's simply a clarification from an accounting perspective of the fact that we put in the loan book also the tax receivable we buy, which accounting-wise are in another place, but they've always been in another place, so there's no change there. Second, we have highlighted that in the loan book, as always, you also have the components of the LPI fund, which goes through, has gone already through the P&L. There's the new component, if you want, the EUR 120 million of recovery cost, which was not before there, was off balance sheet. If you want, that's the only new component.
As of December, the, of the, of the overdue, loan book, so the one that generates LPI, and has generated already the EUR 40, is EUR 2.7 billion, EUR 2.2 billion, as of September.
2.7. I didn't understand correctly.
Yeah.
Okay.
Yeah.
This is the part of the book that generates LPIs and also the EUR 40, correct?
Yeah. The EUR 40 is already generated because the day when.
Yes, because it's on the turnover basically.
It's already locked in, but it keeps generating the LPI. Yeah, that's basically how it works. Remember also that we tend to buy now fairly fresh invoices, so that that number at the peak of December may grow simply because of the effect of the seasoning of the portfolio.
Thank you.
The next question comes from, Andrea Lisi with Equita. Please go ahead.
Hi. Thank you for taking my questions. I'm back to the guidance of EUR 180 million-EUR 190 million in particular. Wondering to understand a bit better the components there. Looking at the presentation of nine months, if I'm not wrong, you said that the accrual in the last 12 months for the rights of recovery cost would have been kind of EUR 50 million. Just for including that impact, I had imagined that the positive benefit to PNL could have been in the area of EUR 15 million, let's say, per year at current level of receivable. Just wondering to understand if this is a number that works for you or that it is reasonable.
At that point, given that the previous guidance was kind of 170, 180, adding this level we already reached the level of your guidance. It's true that there is the impact of Arca, there are all the other elements. Just to want to understand which potential upside do you see there on the guidance, or if you think that this is really conservative one that you are quite sure to achieve in every market condition.
The second question is, if you can help us in understanding the magnitude of the potential benefit you have in terms of PNL from the mandatory depository services for the Cassa di Previdenza, and if it is likely that we could already see something in 2023, or it is something that will appear entirely in 2024. The last question is on the funding side. From the presentation, we see that the deposits from transaction services are down offset by the higher line deposit. Is it only the full effect from the exit of Arca or there is also commercial strategy there? Thank you.
Thank you, Andrea. Let me go through them. On the funding side, we mentioned, I think, on the security services page on page nine, we have had the exit of Arca for EUR 1 billion, also we had two effects. One, the markets were quite negative, the overall size of the assets went down to December, which generates usually a reduction in cash held, also was a reallocation out of cash into investments towards the year-end. We've actually seen, as indicated here, already a trend back with EUR 200 million more at the beginning of February in terms of deposits from security services.
We have, in security services, we think quite a lot of opportunities in the market, particularly in alternatives, in some pension funds, and as you mentioned in the Cassa di Previdenza, we expect the regulation to be fully enacted this side of 2023, which means then the Cassa will have to amend their regolamento by year-end 2023, and then tender for the depository bank sometimes in 2024. We expect the transition to happen next year. For us, it's quite meaningful, particularly in terms of liquidity and funding, because the market is EUR 127 billion.
If you take our market share in pension funds, which is roughly 40%, if you were to capture the same market share, it would mean increasing significantly the deposit coming from the security services business, and therefore give us a pretty cheap and abundant funding on top of what we have already. In terms of the guidance for 180, 190, well, it's a guidance, so I can't comment how conservative or prudent it is. It includes a lot of effects, as I said also in responding to the questions, two questions before.
On the 40 EUR, we've looked at what has been historically the accrual each year, taking into account also the mix between the various, the various markets and the different time of recognition. We think what we put in there is reasonable. It's not the same amount that you would have taken by simply multiplying by 50% the number you see in the presentation of September. That's also to be on the prudent side.
Thank you.
The last question comes from Michele Baldelli with BNP Paribas. Please go ahead.
Good afternoon, everybody. I have few questions. The first one relates to the curiosity on the factoring business because I didn't see the cost of funding. Can you comment a little bit on the trend of this spread between the yield and the cost of funding? Is it now compressed by roughly 40 basis points? This was the kind of rough calculation that I did. Second point is about the difference between the volume growth and the loan book growth. This is something different than in the last nine months. I was wondering if behind we can see some sort of increasing payment terms from public institution in some countries. Third question relates to the exit of Banca Ifis.
Given that the exit is also because of the RWA, the entity and so on, I was wondering if you will be the player to take that kind of market share, and if you are interested, let's say. This means that the RWA entity for you can go up in this kind of layer of growth. Finally, if you can comment a little bit on the expansion of the volumes in Italy, on the other. What are the others? Is it something related to private? Thank you.
Yeah. On other, you have the tax credits, and you'll see the disclosures in the stock that we have, in one of the footnotes, and also some private exposure. That's a growth together. It's mostly tax credit, tax credit business. On the RWA density, for us is really the opposite. You raise a very important point. If you look at page 14, if you look at our RWA density, it actually went down from 45% at the year-end 2021 to 42% today. Why? Because actually, by growing the business, we have a lower RWA density on the performing book than the average RWA density. We've counterbalanced the increase in past due with that.
If you take in also in consideration that in the RWA here, you have the operating cost, sorry, operating risk measure, which is a function of our reported profitability, basically, to a large extent, we've treated as a proxy. We have two years, 2021 and 2022, with positive one-off items, the badwill last year and the EUR 40 in NPI step-up this year. It means actually in the next three years, we should have a flat or declining amount of, absolute amount of operating risk RWA, which means that if you grow the loan book, that amount, the fixed amount generates a reduction of RWA density over a larger loan book. We see that as positive.
We should have going forward a more efficient RWA density for those reasons. On the camping, if you want, of volumes and loans in Italy, in the group in 2022. If you go to page seven, we've seen that in I would say in. The difference is different in each market. Let me walk you through them. In Italy has been quite a strong loan book growth compared to volumes. There we have the effect of the fiscal credits, which are multi-year, so that increase the base that stayed. In Spain, we haven't seen such a large one-off payment of the government in December.
You see actually our loan book almost doubled year-over-year, while the portfolio, so the volumes purchased increased only by 16%. That's potentially one of those signals that payment times might become a bit more complicated to keep for governments. In Poland, we have longer term exposures, again, multi-year. We have had lower volumes than the previous year, actually flattish on a constant Zloty exchange rate, but we have actually had a positive increase because of the accumulation effect. Slovak again, it's a government pays fairly late over a year. Even though we haven't added any new volumes, we have seen a growth in the loan. Portugal, conversely, is the opposite effect.
We actually grew the balance quite quick, the volumes quite quickly, but the balance grew less faster because the government actually injected cash at the end of the year. Then you have Greece, who is fairly aligned between the two. The other country, which is now mostly France, we've had a lot of growth in volumes, but because actually the payment times are fairly short, the accumulation effect, it's been less relevant. On the Net interest income. Look, because of the transfer pricing, between the various businesses, as I flagged before, it's actually more important to look at how the interest income, interest expense behave at the group level, more than how they are allocated between the businesses.
You see the NIM of the group on page five, which has grown at 20%. We basically self-constrained ourselves by keeping the profitability of the lower cost of funding compared to historical in a corporate center instead of transferring to factoring and then running the risk of having an erosion in terms of pricing in that business. There's been a sense of barrier build up in our transfer pricing to avoid slippages on that, on the front. Also, we reprice, which should be done fair, to factoring on a monthly basis, the level of interest rates, based on the previous month, three-month Euribor, whereas clearly the ability to reprice for customers is not as fast.
Because the NPA rates get repriced only every six months, factoring suffers, if you want, from that mechanism.
Okay, thank you very much. Just to complete, let's say at a group level, anyway, you had this kind of 40 basis point increase of the funding cost in 2022. Just to look at the group.
In 2022, our EUR funding cost actually shrank on page 17 compared to one-month Euribor from -17 basis point to -40. The reason is because of the increasing interest rate, we had some build of more deposits, and so we had that.
You are referring to the risk with respect to the reference rate?
Yes.
To the spread to the reference rate. Okay. No, that's fine. That's fine. I was referring to the absolute level. No, okay.
Okay. Okay. Yeah. No.
Thank you.
This concludes our question and answer session.