Welcome everybody, and thanks for joining us for the presentation for the nine months 2022 results. We're quite pleased to report very strong earnings over a third above last year, driven by good performance of factoring and lending, the full impact of the synergies in the corporate center. Despite the market conditions, also securities services and payments have performed well and have driven the performance of the business for this strong quarter. We're also happy to report that we have some important news on our factoring and lending business.
We won a court case in front of the EU Court on the right to recover EUR 40 per invoice of recovery cost, which results in a large off-balance sheet reserve and over EUR 50 million of LPI accruals that we can recover from debtors. Looking at the performance of the various divisions of our business, factoring and lending continues in the strong growth of the loan book at 37% year-over-year, a new historical high, driven particularly by strong growth of new volumes, in particular in Italy. The impact of increased interest rates has not yet been seen in our P&L because the LPI rate will adjust for the rise of the ECB and other central banks refinancing rates only from the first of January, which will drive further profitability next year.
Securities Services, which is our business exposed to the financial markets, has seen assets under deposit down 6.7% year-over-year, despite the positive net inflow. We've completed the exit of Arca in November, and the PBT of the first nine months of the year has grown actually despite the market performance by double digit compared to last year, thanks particularly to a good performance on the cost side. Payments have been basically flat year-over-year. We knew that because last year we had a strong showing from the revenues from Fondo Nazionale di Garanzia, and so the business continues to perform above plan. The corporate center has seen the full impact of the synergies with EUR 31 million of incremental profit compared to last year.
Importantly, our funding position remains strong and highly liquid, with no ECB funding to be refinanced, and therefore, no negative impact of the recent measures of our central bank. Bank of Italy has issued, at the end of September, further clarification on how to implement the new definition of default. This has made it more stringent than before and has implied the reclassification of some of our public sector exposures to past due. Clearly, this does not impact our credit risk. It inflates slightly our capital, our RWA, but impact of that. Capital remains plentiful. We have a CET1 ratio of almost 14% and a total capital ratio of almost 20%, excluding the profits of the quarter.
Remember, we have paid already EUR 68 million of interim dividends. The reduction compared to the previous quarter has been driven by the inflation of RWA, driven by two effects, clearly the strong volumes growth in factoring and lending and the increase in past due. Importantly, the RWA density of the business is unchanged, and so we can continue the trajectory we have seen in the past in terms of capital consumption of the business. In terms of performance by division on page three, you can see the strong growth as described of factoring and lending and of the corporate center, and also the positive performance of security services and payments.
We have reclassified some line item in our accounts, and Giorgio will walk you through that, to have a more consistent view on our net interest income, and also the full inclusion of our deferred personnel cost in our OpEx. We've provided in the footnotes of the presentation the details of this. This is particularly important for people comparing the past numbers. Overall, therefore, a good quarter, but importantly with the increase in interest rates and the reset of the LPI rate starting from the first of January, plus the sentence that we got from the European Court of Justice really underpins also the future profitability of this business. On to you, Giorgio.
Thank you, Max, and good afternoon. As you can see in slide four, we start from the factoring and lending business. We are continuing with the tailwind with the increase of our loan book. As you can see in the bottom right of the slide, the increase in the loan book is strongly driven by Italy and Greece. In Italy, we grew 56% compared to the previous year. For the volumes, we are up by 36%, and also increased our LPI stock, and the fund is at EUR 1,751 million before taxes, with an unrecognized LPI stock that is at EUR 4,033 million.
The LPI collected grew compared to the same period of last year. We have started to see the benefit of the reorganization that we put in place in our collection team. As related by Max, we received this positive sentence from the European Court of Justice and related to the so called EUR 40 that are the amount that we have the right to collect when an invoice has been paid late. I leave the stage again to Max in order to go deeper on this topic.
Thank you, Giorgio. We have on page five a full explanation of what happened and the impact of it. The European Late Payment Directive indicated already that the creditor or who buys the receivables from the creditor had the right to collect EUR 40 at least for recovery cost. The European Commission had explained that it was EUR 40 per invoice. Some courts did not recognize that. Through our Spanish subsidiary, we took the case to the European Court of Justice, which in a recent sentence in October, sorry, has confirmed that the creditor has the right to collect at least EUR 40 per overdue invoice.
That is irrespective of the time of delay, so it's not linked to the payment time as long as the invoice is overdue, and it's also irrespective of the amount of the invoice. That's an important income stream, because it's not linked to the amount of time the invoice remains overdue, nor the amount of the invoice per se. We started from since 2018 to ask through the court process and in negotiation with our debtors to be paid EUR 40 per invoice. Since then, we have recovered over EUR 23 million that you see in the other income line of our P&L.
Importantly, when we settle the recovery amount and we don't collect the full amount, we recover these amounts at the same level at which we recover our late payment interest. Differently from our late payment interest, we're still accounting for these amounts only upon collection, so on a cash basis and not on an accrual basis. Remember, we instead account the late payment interest at 45% of what we have the right to collect, in itself, a lower level compared to what we in effect collect.
If we look therefore at the impact of this directive in the last 12 months, BFF has had 1.2 million invoices which have become overdue and therefore we have generated the right to collect roughly EUR 50 million from our debtors on those invoices. In the same period in the first nine months of this year instead, we have collected EUR 5.4 million, as I said, with the same level of recovery as the late payment interest. If we look at the stock and not the flow of these recovery costs, we have an off-balance sheet reserve of EUR 237 million, and both amounts are pre-tax. What does it mean?
It means actually we have a huge reserve of income that now with the confirmation of the European Court of Justice, we can claim towards the debtor. If we were to account that off-balance sheet reserve at the same level of accrual as we have the late payment interest, we generate pre-tax EUR 107 million of one-off capital. Importantly, we could generate EUR 23 million of ongoing income from the yearly flow of recovery costs. This is not even taking into account the fact that given the strong growth in the factoring and lending business, this number is due to increase over time.
A very strong result because it underpins our strategy of collecting also these recovery costs, and that should boost our profitability on a cash basis when those recovery costs come in through our negotiation with the debtors or in case we were to change the accounting mechanism also on an ongoing basis. The second important point, which I raised at the beginning of my presentation, is also a recap on how the late payment interest is actually calculated and what is the effect of rising rates on what we can charge the debtor, not from recovery costs, but from the late payment interest. Let me recap what the directive says.
The directive says on page six that the LPIs accrue for the creditor at least at an 8% spread versus the central bank refinancing rate. This refinancing rate is reset twice a year on the first of January and on the first of July. The refinancing rate is actually changed by the central bank on an ongoing basis, but the late payment interest is calculated twice a year on the first of January and the 1st of July. If we look at the forecasted rate increases until the year end from the ECB, we should expect a rate starting from the first of January of 10.5% compared to the 8% currently.
You can see on the graph on page six on the right, based on the expected increases in the refinancing rates, the market is pricing in, which is the blue line, where the LPI rate will go in January of this year of 2023 and in July of 2023 and the year forward. There is a delay basically of the reset, but it's immediate reset based on the level of the refinancing rate of the European Central Bank. What does it mean in terms of our P&L? Well, clearly, we are gonna accrue a higher rate for our LPI fund, and that will have a pretty strong impact on the stock.
Because we accrue 45% of what we have the right to collect, that will mean roughly a 1.1% increase in the yield of our receivables starting from the 1st of January. Which on a portfolio of overdue invoices towards the public administration, which if you take September's numbers, and clearly we have a growing business, is EUR 2.2 billion, will have a quite strong impact going forward. We thought was worthwhile to flag this in the review of our Factoring & Lending business. On to Giorgio next.
Thank you. Now we are at page seven, going forward with the factoring and lending. The P&L clearly increased 17% year-over-year. We can see that in the net interest income and also in the total net revenues. The gross yield on average loans is at 5.2% and increased compared to the last year, from the 4% that we had in the same period of the 2021. We grew a bit about direct costs, but compared to the average loans, we decreased from 1.1% last year to 0.9% of this year.
We had an increase also in the loan loss provision, and this has been mostly due to specific provision on private exposure. The other operating income expenses are at EUR 7.3 million, and this is due to the higher collection on LPI euros that we had in the period. The profit before tax is at EUR 91.3 million. Going to the Securities Services business at page eight, as highlighted by Max, there was assets under deposit at EUR 77.4 billion, sorry. This is less 6.7% compared to the last year.
This has been driven by the negative financial market performance, and also the same happened to the Global Custody with a downfall of 4.5% year-over-year. We have registered also a decrease in the deposit for the first nine months of the year. This has been mostly driven by the EUR 0.5 billion of deposit coming from Arca. At the beginning of November, the migration of Arca has been completed. Also the lower assets under deposit, that's because the liquidity has been shifted toward higher yield generating assets for our clients. The net interest income decreased by 16%. It is linked to the lower level of the deposit.
The total net revenues finally is up by 0.3% year-over-year because we applied better fees and commission income that grew by 5%. Also we put a lot of attention on our direct costs, and we've been able to decrease the direct costs by 10%. At the end we registered also a good growth in profit before tax. Going to the Payments business, KPIs and profit and loss growth in KPIs has been driven by the higher economic activities. The number of transactions in this business for transfer and collection grew by 6%, and also the card settlement in terms of KPI grew.
On this business, due to the commercial competition, we apply flat fee, and so on the pricing, on the pricing side, so we did reduce the same increase in the fees. Checks and receivables continue the trend, decreasing trend that we forecasted. With the corporate payments, we had a +12% year-over-year that has been driven by higher economic activities in the first nine months of the compared to the first nine months of 2021. The net interest income increased 4% year-over-year.
As I noted before, we register a - 5% in the commissions because in the first nine months of 2021, we had a boost on the revenues coming from the Fondo Nazionale di Garanzia. This was an exceptional measure linked to the pandemic situation that we had in the last year. At least the profit before tax is down by 2%. It is mostly linked to this final effect on the commission coming from the Fondo Nazionale di Garanzia.
For the corporate center, it's important to highlight that we move, as you can see in the footnote number one, and the net interest income increased compared to the one of the last year. Because we move the cost of the swap for refinancing the asset that we had in the Polish zloty from the other income and expenses to the net interest income. If we take this point, we had an increase on the net interest income coming from the corporate center. In general, the result of the corporate center has been really positive because we are positive for EUR 15 million, as you can see in the chart.
Also this has been driven by the full implementation of this funding synergies that we discussed several times also over the last year. We had also the synergies in the direct costs, not only in the funding. We can say that that's for the corporate center, we had a very strong result. That is EUR 31.2 million higher than the previous year. Going to the asset and liability structure at page 11, we maintain a strong LCR and our leverage ratio is at 4%. Also the NSFR is significantly higher than the requirement coming from the regulation.
Also we have moved our strategy in order to have a different mix in our bond portfolio, moving from the fixed portfolio that was the split between fixed and floater was 50% until the last quarter. Now we moved to a growth for the floater compared to the fixed bond portfolio because our liabilities are floater. In this sense, we can freeze the change of rates that we are forecasting for the future. Going to the next slide, page 12. As said before, we have applied more stringent criteria on the calculation of the past due.
We didn't have an increase in our RWA density, but the level of the past due increased up to EUR 187 million. We are putting in place a lot of effort in order to manage the new criteria highlighted by Bank of Italy. We are setting new processes. We started also to study a project related to the definition of and to ask for the validation from Bank of Italy of the internal model for credit risk. This going forward can give us also another benefit. We didn't have any significant increase in cost of risk. We have to also consider that 91% of our impaired loans are towards the public sector.
This increase in past-due doesn't generate anything in our real credit risk. Going to the capital ratios at page 13. We have EUR 170 million of excess capital, and we accrued dividend in this quarter for EUR 36.8 million. Our capital ratios are 19.3% CET1. Total capital ratio, sorry, is 19.3%, and CET1 is 13.8%. Considering also the accrued dividend, we can reach a total capital ratio, a level of 20.7%. We have received the MREL requirement that has been in place for us with the compliance starting from the 1st of January 2025.
There is no subordination requirement, and we have a shortfall at the moment for the risk weighting that is EUR 64.7 billion. On the leverage ratio is EUR 176.5 million, but we have to comply starting from the 1st of January 2025. Also, we have received the new SREP requirement, and the total capital ratio requirement moved from 12.05% to 12.5%. We have to also to remind that our RWA calculation is based on a standard model, and as said before, we are starting to think about the implementation of the internal model on that side.
I finished, and I leave the floor to Max for the last slides and the conclusion. Waiting for your questions. Thank you.
Thank you. Thank you, Giorgio, for the presentation. It's an important quarter for us with a number of structural features, as we have described that will improve our business model, and the handling of the new interpretation Bank of Italy on the past-due regulation. I leave the floor for any question you might have. 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 Giovanni Razzoli with Deutsche Bank. Please go on.
Good afternoon to everybody, and thank you for the clarification. To summarize everything in terms of changing the regulatory environment. Basically, from 2023, you will be able to book EUR 23 million of higher revenues on the recent European Court of Justice regulation. Assuming the further increase in the rates, you are gonna have another EUR 25 million of NII starting from 2023. All in all, you are guiding more or less to EUR 50 million of higher revenues in 2023 vis-à-vis 2022. I was wondering whether my understanding is correct. Again, on the European Court of Justice ruling, you've mentioned that you have, you know, a legacy, you know, value of EUR 107 million.
I was wondering whether you can release that, I don't know, in the Q4, and so to boost the profitability, one off, at the year-end, given this EU ruling, or whether shall we wait other, I don't know, accounting approval or whatever. That's my first question. The second question is, clearly the rates environment is significantly better. You have this Court of Justice regulation, which is extremely favorable to you. I was wondering how shall we look at the EUR 175 million of net income target for 2023. If you can give us a sense of what could be, you know, the sensitivity or an updated guidance out of this.
If I'm not mistaken, the last quarter you mentioned that you could have revised your target with the Q2 results, if I'm not mistaken. If you can comment on this as well. The last question, again, on net interest income. I've seen that you in the slide you mentioned that as most of the other banks, you are not yet benefiting from the increase in the variable rates on the CGT, I guess. It's the repricing is going to be in October, so the Q4 for NII should be really strong. If you can give us an idea of the magnitude of this effect also from the repricing of the existing carry trade portfolio. Thank you very much.
Thank you, Giovanni Razzoli. Let me go through the various points hopefully I won't miss them. On the European Court of Justice, on the Factoring & Lending business, you mentioned two effects. The effect on the NII is correct. If you take 1.1% × EUR 2.2 billion, and then clearly at the end we will have a higher level of receivables, and you have a clearly strong increase on the yield of the portfolio. On the European Court of Justice, at the moment, it's fairly new, the judgment, and therefore, we continue, at least until the year-end, to account the collection of those recovery costs on a cash basis.
In the first nine months, we've collected EUR 5.4 million, as I mentioned. We are thinking what to do if we want to move to an accrual basis. We haven't taken any decision, but we wanted to give a sense of what would mean if we were to move to an accrual basis, as a broad estimate. If we were to do it, then yes, we would have a one-off positive impact of EUR 107 million. We clearly adjust for one-offs as well. That will go, most likely to reserves. On the P&L basis, then we will have, on an ongoing basis, the EUR 23 million you mentioned.
also we will not account fully what we recover because part of it will be already booked through the P&L, not clear to the full extent. It will be slightly less than EUR 23 million you mentioned. No decision has been taken, and we have no communication to be made today. If you look on the current accounting policy, the fact that we have the stock of balance sheet recovery cost of EUR 237 million means that those will come through our P&L, a portion of it, roughly in four or five years, which is what it takes usually to recover the late payment interest.
Certainly, because we have started to ask for those recovery costs to the debtors only in 2018, we have in front of us a reasonable expectation of seeing those recovery costs, which we have recovered, rather for the recovery of EUR 23.5 million in the last three and a half years. Actually, we expect those volumes to grow quite strongly in the next four or five years. As I said, even without taking into account the change in accounting.
The fact that we won the European Court of Justice gives us a very strong base to claim those recovery costs, both in courts, because the courts will abide by the judgment of the European Court of Justice, and in the court judgment we have already opened, but also in the bilateral discussion with debtors. That's a strong underpinning, we think, of future profitability. In terms of the 2023 targets, no, we didn't say that we would have updated guidance with the Q3 results. What we indicate is that we are starting the process of updating our business plan because as you know, our targets are for 2023. We will review the business plan early into next year.
If that's the case, we'll give a different guidance to the market and what we've indicated today. We have some positive news, I think, in the overall environment. In terms of the benefit for variable rate, I think, we need to, as you correctly pointed out on page 11 in the footnote two, we indicate the refix of the variable rate bonds, which will happen mostly between end of October, which has already happened, and the year-end, that will drive spread higher. Interest rates though are still increasing, so we will have an increase also in the short term rates that drive the cost of our deposit from transaction services.
The full benefit of the reset of the yield will be seen next year, whereas in the fourth quarter, the two effects will be a bit more muted. Importantly, we have EUR 1.2 billion of bonds expiring Q4 2022, so the investment of those happens at a higher level. For instance, if you take the EUR 0.7 billion of fixed rate bond that expired in November, those were yielding a negative 20 basis points. We have reinvested those in floaters that yield a higher, actually higher spread. The base rate, the Euro plus the spread. That's a good basis for next year.
Thank you.
The next question comes from Gulnara Saitkulova with Morgan Stanley. Please go ahead.
Hi, good afternoon, everyone. It's Gulnara from Morgan Stanley, and thank you for taking my questions. My first question is on volumes. We have seen a very strong trend in volumes in the last quarters. Can you talk about what type of volume growth rates would you expect to see across your key regions, i.e., Italy, Spain and Poland in 2023? And can you talk about the volumes pipeline with a focus on these regions and your expectations? My second question is on margins. Could you talk about the margin developments that BFF has seen recently? What is the discount at which BFF buys receivable today versus a year ago? And my third question is on cost outlook.
Inflation is running at a very high level in Italy and in Europe, and Italian consumer price index is growing at 12% year-on-year. In that regard, how should we think about your cost development for the next year? How do you expect the cost base to progress going forward? Thank you.
Sorry. I thought I was talking, so that the mic on mute. On volume evolution, yes, you're correct. We've seen a strong growth in volumes, and we expect to continue to see a strong growth in volumes at double-digit in this quarter, also in the quarters ahead. That's driven by good performance in Italy, where you know we have changed the leadership of the commercial team at the beginning of this year. Strong growth in Portugal, strong growth in Greece, a bit more subdued in Spain, although we have recovered the growth there as well.
On Poland, the shock, a very steep increase in interest rates has subdued the growth rate more than in other markets, where we continue to expect growth in loans to continue at good pace. Overall, quite positive. I link these to the inflation point. Remember we buy nominal invoices, so inflation is actually positive for us, particularly if you think about the cost of energy that public administrations are buying from utilities. Because we buy in nominal terms and the cost is really linked to the volume of invoices and not the value of the invoices, that has a positive gearing in terms of our overall returns. We are not seeing yet a lot of pressure on wages.
We might see some, I would say particularly in Poland, because we start from a low base of salaries, and clearly the inflation has more of an impact. We have fairly limited indexation in our overall contracts. The choice we have made to move in 2024 to a new headquarters in Italy will actually protect us in that respect from the inflationary development on our real estate costs. We don't expect a huge change also given our relatively good cost-income ratio. On margins, I think the truth, we have seen actually pretty good performance on margins. We need to see, I would say, two sides to it.
One is what we can charge our customer on the Factoring & Lending business and also our cost of funding. On our cost of funding, we have pushed for more collection of retail deposits. That has actually seen retail deposits for the first time after a long time to show a positive spread for the taker of deposits. We get deposits at a lower level of interest than the Euribor or WIBOR, so we get a margin there. On the yield side, we have been able to reprice, I would say, quite well, the contracts that are up for renewal. A portion of our contracts have actually been written in different interest rate environments.
We have a portion of our book, which is priced at with fixed two years or three years purchase price cost for the seller of the receivable. We have the hedging on the late interest payment, as we mentioned before. That protects us a little bit on that. The effort will clearly be to reprice those contracts as they come due. Because the interest rate environment has shifted for everybody, we think actually the ability to transfer the increased cost of funding to the clients is good. We'll see in the next few months how that will pan out.
Thank you.
The next question comes from Nicholas Binda with Intermonte SIM. Please go ahead.
Hi. Good afternoon. Thank you for the presentation. I have just a question on the capital ratio. What has been the impact on capital ratio deriving from the increase in past due loans? Thank you.
The impact on capital ratio can be, I mean, from back of the envelope calculation page, you take page 12, we have an increase of roughly EUR 160 million of net past-due. If you take our average RWA on the Superbonus portfolio of 20%, we have had an increase of 130% of RWA on those EUR 160 million. That's the overall impact. Now, my mental math is not as strong, but it should be around EUR 220 million, I think, of RWA.
If you look at then page 13, the growth you have seen from EUR 2.171 billion of RWA at the end of the year, and the EUR 2.7 billion as of today, is driven on one side with this EUR 200 million+ of RWA inflation, but mostly actually from the growth of the loan book. Now, because the loan book has an average RWA which is at around 20%, then clearly the growth in the loan book deflates the RWA density of the book. The increase in past dues has not resulted in an increase in an RWA density, which has been, as you see here on the bubbles on top of the graph, fairly flat over the last two years. Over the last year, sorry.
Thank you.
The next question comes from Simonetta Chiriotti with Mediobanca. Please go ahead.
Hi, good afternoon, and thank you for taking my question. I've got two questions. Well, the first one refers to switching to a different accounting of the EUR 40 per invoice. My question is, which are the drivers of this change? You have to talk with the Bank of Italy or what is making you switch to a different accounting method. The second question in regards to the different way that you accounted the swap in Poland, if I'm not wrong on Poland, let me just see if I'm not mistaken.
There is this change, so it's difficult to compare the NII in the third quarter of 2022 with the same period of 2021. I'm wondering if you could provide this number. The NII for the third quarter of 2022 and 2021, calculated with the same reclassification. Thank you.
Thank you, Simonetta. Yes, the team will provide you the data on this shortly on the call. On the accounting of the EUR 40 in the potential change, which is frankly a decision of the board, having discussed it with the auditors. We think we have a good base to actually potentially change the accounting. We haven't taken any decision yet. Therefore, we will update the market when this decision gets taken, if at all. I think for us it was important to actually flag how big the reserve is and how important is the yearly accrual of new EUR 40 amount because that's clearly material for our business.
Because it takes on average five years to collect our LPI. The EUR 40, even if you're not to account for it, we have a substantial increase in our earning capacity. Why substantial increase in our earning capacity? Because clearly, as I mentioned before, when we go to the court or when we negotiate with the debtor, and we have finally a confirmation from the European Court of Justice of the correct interpretation of the law, that gives us a huge amount of power in those negotiations. That's a positive. Leave it to Giorgio to provide the data.
Yes. The difference that we applied moving the cost of the swap from the other income to the net interest income is that if we compare the quotes in 2022 and 2021, we paid around EUR 26 million compared to almost EUR 6 million in the previous year. Considering that is of the WIBOR, then we spent the difference between the two, so around EUR 20 million in terms of swap. In this case, you can draw the difference and compare the net interest income.
You can see the.
Sorry, Giorgio. Could you repeat? I couldn't note down the precise numbers.
Okay. We move from the other interest expenses, the cost of the swap. When 2021, the cost of the swap was 5.8, so around EUR 6 million. In 2022, is EUR 26 million. This has been driven by the increase of the WIBOR, the rate that we have in Poland.
In the quarter.
Nine months.
These are quarterly numbers.
Nine months.
Nine months.
We'll get you also the quarterly.
Yes.
-numbers at the end of the call while the team prepare them.
Thank you.
The next question comes from Andrea Lisi with Equita. Please go ahead.
Hi. The first question is on the increase in past-due. Just wanted to understand how you manage the exposure, you know, if you plan some disposal or just waiting for collection. Do you expect this to impact the capital going on because of the effect of calendar provisioning, which do not always distinguish between the different categories of NPEs, and so requires a full coverage over some years. The second question is on the NII of the factoring and lending business in the quarter.
We see that it is quite stable, quarter on quarter, third quarter versus second quarter, mainly because of huge increase in the interest expense. If you can just elaborate a bit more on that. Thank you.
On the Factoring & Lending, no, you're absolutely right. What we've seen is that the interest expense grows immediately, whereas the NII rate changes only at year-end, as we described. We have counterbalanced the increase in interest expenses. We are repricing on customers, but that also takes time to play out. In a sense, in the quarter, you don't see any benefit on the NII rate because the effect is only from the first of January. We have been able to compensate the increase in interest expense with the part of the repricing, but not fully otherwise we'd have grown at a faster rate.
What is important if you look forward is that we continue to grow the loan book that will yield substantially more. The effect of the repricing of the interest expenses have already to a large extent happened. We should see more positive results going forward. On the past dues, our business model is actually to manage the receivables. We think actually we've invested quite a lot of time, and we continue to do so in the platform to service our customers and to collect our own receivable effectively. We think actually there's a lot of value in those receivables because there's no real credit risk, and they will yield a pretty high level of yield.
Think about the 10.5% that we get as a right to collect starting from the 1st of January. Economically, it doesn't make much sense to wait for that. It's a portfolio which churns a lot, so we don't expect the calendar provision to really impact in that respect. It's further down the line, and our receivable gets paid fairly quickly.
Thank you.
The last question comes from Julian Roberts with Jefferies. Please go ahead.
Hello?
Hello. We have another question, sorry, from Michele Baldelli with BNP Paribas. Please go ahead.
Hi. Good afternoon to everybody. I have two questions. The first one relates to the trend of the fees, because in the last quarter it seems that there has not been that much accrual coming from fees and commissions. I just wanted some color on it. The second question relates to the LPI, in the sense that, just to be sure, when you speak about EUR 2.2 billion of PA, does that include also NHS or is just the PA in the total that you mentioned on the slide? Another question relating to the LPI, in the calculation you apply a 45%, which is the, let's say accrual dedicated to the Italian business.
Can we assume that this rate is for Italy, but for the other regions is more, like let's say Spain, probably close to 100% and so on? Thank you.
Let me clarify this last point quickly. We accrue 45% on the whole portfolio. There's no country in which we collect only 45%. We collect substantially above in every country. In Spain, it's close to 100%. In the other countries, it's higher. It's a very prudent approach compared to, for instance, some of our competitors do. The 45% is really the minimum that we recover on the LPI. It's a constant accrual that we apply across our broad. On the LPI book that generates on the book generates the LPI, what we've indicated is NHS plus public administration.
You need to bear in mind that most of the Polish business, also Belgian business, is not LPI generating assets. We have tax credit, and as we've indicated in the footnote, we have actually the other receivables we indicated are not in the footnote, but in the first half results, the amount of tax credit coming from 110%. That's how you get then to the overall amounts of loans. On the fees and commissions, are you referring to the group fees and commission or the factoring and lending fees and commission?
It's the group one.
Well, if you think about the group fees and commissions, what we have basically two effects. The first one, if you take the bigger items, if you take Payments, those have seen a contraction in net fees and commissions because of these one-off. Sorry, of these high volumes of revenues coming from the Fondo Nazionale di Garanzia. As you see on page nine, the fourth from bottom bullet point, we had EUR 3.4 million more last year, so that explains the entire gap and more of the Payments business. On Securities Services, we actually have a higher net fees and commissions despite the lower level of average AUM. So this has been a fairly good performance.
In fact, in lending, we have seen some of the customers who were giving to us receivable only to be managed, they actually sold the receivable to us. That's why we have less net fees and commissions.
Okay, thank you very much for the explanation. Just a follow-up, just to understand. The repos that you are now doing with the government bonds is because on those you can get better rates if you are giving as collateral the Italian government bonds. Is this the way you are approaching these kind of funding?
Yeah. Look, it's simply that we have on the deposits from transaction services, volumes of deposits can vary throughout the year and also throughout the months. We've kept historically a pretty large bond portfolio so that we can manage that, and we use the repos as a flag for these deposits.
Okay. Clear. Thank you very much.
In a sense, if I may add, there's also a reason why we've moved more towards floaters, because the repos are on floaters, and so it makes sense to invest the large part of the government bond portfolio on floating rate bonds as well.
Sure. Thank you very much.
This concludes our question and answer session. I would like to turn the conference back over to Massimiliano Belingheri and Piergiorgio Bicci for any closing remarks.
Okay, coming back to the cost of the swap. For the third quarter of 2022 was EUR 11 million, compared to EUR 0.5 million of the same quarter of 2021. For the second quarter 2022, EUR 9 million and EUR 0.94 million for the 2021. The first quarter 2022