Good afternoon, this is the Chorus Call Conference Operator. Welcome. Thank you for joining the Banca Generali first half 2023 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Gian Maria Mossa, CEO and General Manager of Banca Generali. Please go ahead, sir.
Good afternoon. Welcome to our first half results conference call. In the first half, we delivered very strong results with some very important achievements. The total assets exceed EUR 80 billion for the first time ever. The productivity of our existing sales force was at the highest level, and the best interim result ever in terms of recurring net profit, thanks to very strong net interest income and very solid gross fees. The first half was pretty challenging due to the market performance of the last year and raising interest rate. Despite that context, we delivered very strong results also in terms of net inflows. The quality was pretty good.
The net inflows in what we call high-quality investment services , that is about financial wrappers and advanced advisory services, exceeded the level of last year with EUR 1.6 billion of net inflows, or almost 50% of net inflows. We continue to see a rebalancing between third-party funds to in-house funds, and also considering the quality on the assets under custody , we are pretty happy with that, because there is an important contribution from structured products and certificates. Very good quality of portfolios under advanced advisory services. Last but not least, a great part of the bonds are invested in duration lower than one year.
We are, this quarter is really important because we are at the midpoint of our three-year business plan, and I'm very proud to say that we are in line or above our targets. In particular, we are very confident for the next quarters. Starting from net profit, page 4, as you can see, the first half closed at EUR 175. Most of these comes from recurring net profit. Recurring net profit in the second quarter closed very close to EUR 90 million, while the variable net profit contributes marginally. Why the recurring net profit jumped? First of all, thanks to very strong net financial income, page 5. You can see the contribution on net interest income in the second quarter, above EUR 80 million. This is driven by an increasing net interest margin.
In the second quarter, closed at 2.13%. As I mentioned, it's not only about net interest income, it's also thanks to the total gross fees, in page 6, we recovered the level of the first half of last year, so we are pretty stable year-on-year, but with a steadily recovering quarter-by-quarter. While variable fees are marginal, EUR 2.6 million, but I think it's really important to stress the fact that EUR 1.7 billion of funds, or five strategies, are at or very close to the high-water mark. Page 7, let me dive into the gross fees, starting from management fees. Here, the positive news from margins at 1.43.
The average assets under management are recovering, but are not at the same level last year, the result is management fees at EUR 400 million. We re-reached the level of EUR 200 million per quarter. Very strong results from the gross banking entry fees, page 8. The result here is pretty impressive, almost EUR 40 million. All the components are contributing positively, with entry fees at EUR 1.2, brokerage commission almost close to EUR 11 million, advisory fees above EUR 10 million, and other banking fees above EUR 6 million. This is driven by asset expansion, volumes, but also margins. As you can see, bottom of the page, the margins closed at 0.18, or once excluded the cyclical component , 0.17.
The three major initiatives launched during our previous three-year business plan are contributing significantly in providing good revenues also on assets under custody . In terms of payout ratio, the contribution for net interest income is in line with the first quarter, it's EUR 3 million. Payout, ordinary payout, 36.2%, slightly higher than 36%, that is our target, due to basically seasonality. Some costs for the network that are of this quarter, but we are pretty confident to regain the level 36% or below. The part of the cost of growth is in line with expectation, in the range of 10%-11%, while payout to third parties increased on higher servicing costs linked to credit cards. The overall total payout ratio is in line with our targets of 53%. Next page, cost. No news, good news.
We are, we confirm the range, 5%-6% of the core cost, included also all the investments and the banking, and the Swiss bank project. I would go to page 11, where we see the ratios, and also in this case, you can see our very efficient leverage with operating costs and on total assets, again, below 0.3, and cost income ratio at the lowest level ever. Page 12, just to sum up, they say that the operating profit, excluding performance fee, were very strong. This is driven from, of course, great part from net interest income, also the diversification of our revenues and in particular, the great activity of the network on the assets under custody .
If we focus on non-operating trade charges, we see that we are EUR 2.53 million higher than last year, nothing new, while on the tax rate, we confirm the level of the first quarter. This is driven by the mix, so, less performance fee, more fees generated in Italy, financial wrappers, and the fees on assets under custody . Also, in this, also for tax rate, we do expect normalization with the stabilization of the market. Next paragraph, balance sheet and capital ratio, page 14, we start from total assets. Total assets, total interest-bearing assets closed at 14.3. Here, let me highlight the quality, the asset quality. Just to remind you that we do not have any traditional lending activity.
We do not have any mortgage initiatives, we have some mortgages only for employees, and the HQLA assets are almost 70% of total assets, so very high quality on the balance sheet. In terms of yield, we are at 2.64%, and this is driven basically by all the major components of our total assets. Next page, liabilities and equities. The total, let's focus on client deposits at EUR 11.1, in line with our projection. We will deep dive on this on the last part of the presentation. Cost of funding, pretty stable, 0.31%, the overall cost of client deposits. Last, capital and liquidity ratios.
All the ratios are improving, and leverage ratio at 5, total capital ratio above 18, and all, let's say, liquidity ratios well above the requirement and above also the level of last year. Now let's introduce the commercial part. New achievements, a new record, total assets above EUR 88 billion, advanced advisory services 8.5, almost 10%. Focusing on page 19, you can see the quality of assets under management with the financial wrappers exceeding EUR 10 billion, and with in-house funds improving relatively better than the third parties. Also, in insurance products, good news, the insurance wrappers recovered, and now the total insurance wrappers account for EUR 10.5 billion. Then, as we will see later, there is a progressive stabilization also of the traditional life policies.
In terms of net inflows, page 20, the focus is on the right. As I already commented, EUR 1.6 billion of net inflows in fee generating assets, then we will deep dive on the EUR 5 billion in assets under custody. The quality of the inflows is very high, with EUR 2.9 billion of existing sales force inflows, I am at page 21. Recruitment is lagging, as I explained in the first quarter, is due to the difficulties to transfer portfolios with negative performance from competitors, the interest in the bank is very, very high. I'm very confident that once we see stabilization of the market, we will regain our leadership in recruitment top talent.
Let's say that the focus today is about, in the business update, our midpoint, the midpoint of our three-year business plan. At page 23, you see our three major targets. The first one is consistent growth, it's about net inflows. You know, we set the target in the range EUR 18 billion-EUR 22 billion for the three years. It means that for the first eight months is in the range EUR 9 billion-EUR 11 billion. Two main components, the first part was about the existing sales force. Here we are above the average of the target with EUR 7.4 billion. This is all about productivity. You see that we are lagging in the recruitment two components, Italy and Switzerland. Profitability, here, let's say that we set the target of growth in the range 10%-15%.
We are definitely well above expectation, and remunerative growth, which is pretty impressive to me. We already approved EUR 4.2 per share, and we already posted almost EUR 1.2 for the first half of the year, is above 3%. Just annualizing what we have already accrued for the first half, we would pay a dividend yield above 7% to the price, to the price. Deep dive on consistent growth, page 24. Here we give a sort of a deep dive in of the different clusters, the age of the net inflows. You see an acceleration of the inflows from younger. It's from 0.3 to 0.4, with some rounding effect.
Is the result of our dedicated project to enhance the development and inclusion of new junior talents and the team. The lighter gray is about our senior banker, 2.4, new high. Here we start seeing the first results of all the data projects that we announced during our three-year business plan day. In particular, we are piloting the phase in which we provide the first estimates of the potential of the client, and we see with great optimism, room to increase the share of wallet of our existing clients. We delivered also our new platform, the BG Family Office , that is a way to provide a holistic approach to high net worth individuals. Switzerland, finally, we are at this moment in which we're going to receive the license.
We do expect it in next month, in August. This implies that a go live for Swiss clients in November, and for Italian clients in the first quarter of next year. This is very important. It's a revenue engine that will contribute significantly to our inflows in the medium terms. In terms of consistent growth, we are optimistic to see re-raising contribution of the existing, thanks to all the projects, in particular, the data and the potential of the clients. Switzerland is close to be there, and it's the first license, the regulator in Switzerland approved after several years, and we see great interest around this new initiative.
Especially, we are confident to see also a stabilization, a revamp of recruitment in the next quarters, in particular, in the first half of next year. Second part is on profitable growth, and we start with net interest income . In the slide, you see the same framework as the one we already shared with you in the last two conference call. There is the assumptions to increase the cost of funding of the clients from the current 0.31 to 130 basis points. There is the assumption or the reduction of client deposit as projected in the previous quarter, in the range of EUR 10 billion-EUR 11 billion. You see the result. The result is an increase on net interest income in the range EUR 250 million-EUR 260 million .
Bottom right, you see another projection that will be our new target, that is, implementing the same projection with a cost of funding that is 50% of our target, so around 0.6%-0.7%. In this case, the overall net interest income will be EUR 280 million. We increased our targets from EUR 230 million-EUR 280 million , and we are confident to confirm this level also for next year. Page 26, a deep dive on assets under custody . Here you can see the result of the delivery of the previous three-year business plan. Very solid result. First of all, you see the volumes on primary markets and certificates, EUR 1.5 billion in the first half, more than twice year-on-year.
The volumes in terms of assets under advisory for the AUC part, 4.4, more than 50% higher year-on-year. Brokerage, again! 9.8 or more than 50% higher than the last year. Here, good news are plenty. First of all, advisory on assets under custody is 20%. It's good enough, and it is accelerating. Primary certificate, it accounts for only 7%. This is important because it implies to nowhere. The bonds, on the right bottom of the page, you see a histogram jumping from 0.5 to 3.2. It means that we accumulated 2.7 of extra assets invested in bonds with a duration lower than one year. We have EUR 3.2 billion of assets maturing in the next 12 months.
This is, of course, it implies that a sort of rebalancing also in the mix, and there's a sort of caution for asset management insurance products. Page 27. 27, you see this slide is the same as the first quarter, where we show the trend of services, of investment services, the bespoke investment services, so financial wrappers and advanced advisory services. The growth path is pretty impressive. The same can be said for the margins, 1.41. The last page, page 28, is a deep dive on the more traditional asset management and insurance product. Let's focus on fund industry. The first chart on the top of the page. If you look at the two histograms, the red is saying one thing. We are increasing the focus on in-house products.
In the first quarter, 122, in the second quarter, 181. There's a good momentum for in-house products, while the third- party products are losing momentum. There is, you see that there is a sort of switch, and this is very important because in difficult period, the financial advisors, our clients, are choosing the in-house solutions for the quality of the results. On the bottom, we have the insurance. You know, it's two years that we are targeting a rebalancing between traditional life insurance policy and insurance wrappers. We start again to see this mechanism, this rebalancing, with EUR 100 million of net inflows in insurance wrappers. We do see a stabilization in the outflows of traditional life insurance.
We have a target, a medium-term target of -50, -70, of in traditional life insurance, more than offset by positive inflows in the insurance wrapper. The expectation for the fourth quarter, in the third, we should see the U-turn. In the fourth quarter, you should see positive net inflows for the insurance business. Basically, for the profitable growth, positive news from net interest income, up this year, stable next year. Positive news in assets under custody , higher profitability, plenty of liquidity. Positive news on financial wrappers and advanced advisory services, the place to be. Great quality of in-house solution for funds and say, stabilization of the insurance world with an attention, higher volumes on the most profitable product.
All these numbers make us even more optimistic and confident in delivering all the targets of our three-year business strategic plan. Now I will hand over for the Q&A session. Thank you.
Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Gianluca Ferrari with Mediobanca. Please go ahead.
Yes. Hi, good afternoon. I have three questions. The first one is on the outlook you can give us for Q3, in particular for certificates. Last year, it was a bit of a weak quarter for certificates. I was wondering what are your expectations now? I understood you said you have EUR 1.7 billion, not too far from the high-water mark. Can you provide us a bit of gut feeling of the performance fees we should put in our models for year end 2023? The second one is sort of accounting kind of question. In the Altri Proventi net adjustment line, EUR 6.6 million this year, it was EUR 7.8 million last year.
I remember last year, you made a point regarding the discount rate for the indemnities of the portfolios you acquired. I thought this year, those kind of effect, that kind of effect was less present, but it's still. If you can explain what is driving that line of the P&L? The last one, I understand the reassuring message on Life G&A savings . Outflows are gradually improving, the secondary market is going pretty well. Can you tell us from a commercial standpoint, what are you doing to improve that phenomenon, if you have new Ramo I offered to existing clients, or what are the kind of strategic and practical measures you are putting in place? Thank you.
Thank you, Gianluca. Starting from the outlook for certificate, the numbers are pretty impressive because the net inflows are negligible, so the volume is all about turnover for the positive performance. I don't see concentration risk, and as I mentioned, the overall exposure to structured products, certificate and primary market is close to 7%. That is, as we said, that we have still room to increase this percentage. Here, the idea is to continue to provide practical solutions, and this kind of solution work much better with higher interest rate. I don't see as down. We are using these initiatives commercially, so we can manage the volumes.
I don't want to accelerate, so I do expect positive volumes of, also from the second half, a little bit lower, also for seasonality in, compared to the first half. In terms of performance fee, it will depend mostly from the market, but let's say that we have five strategies at or above the line or just slightly lower than the high-water mark, in particular, two flexible products and one high yield and one equity on technology. let's say that if we think of a normalization of the markets with a single-digit returns on the equity, let's say around 5%, and some positive news from bonds, so stabilization also of the yield, we could have in the range of EUR 10 million-EUR 20 million .
It depends from, of course, the market condition that you have in mind. For provision, it's exactly what we described in the first quarter, because we increased the provision for to manage potential claims from clients for the market performance of last year and for securitization. In the second quarter, nothing new compared to the first quarter, for this question, I will hand over to Tommaso to complement the answer. For the insurance, let's say that as you know, here, the goal is to increase the percentage of the insurance wrappers. We're going to launch a new project, a new product, in September, October, where in the insurance wrappers, we can manage automatic rebalancing.
This is very efficient for fiscal reason and also to mitigate the time to market, the entry point in the markets. We are pretty sure, we are confident to see important numbers from these initiatives, and the product will be launched, let's say, in the first part of October. Traditional life insurance is working pretty well because, together with the insurance company and in line with the initiatives provided by other competitors, there is a sort of upfront for the clients, two percentage points. This, let's say, stabilize the yield for the next two years on an average of three percentage points.
I have to say that thanks to a very cautious management of the inflows in the previous year, the quality of our segregated accounts is very high. We do expect that if we stabilize the inflows, we could see also an uptick on the, let's say, on the yield of the underlying. That is now slightly above, expected to be slightly above 2.5. Tommaso, do you want to? Sorry, last answer on the insurance, the gross premium per month now are at EUR 200 million overall. It's pretty good, it's in line with the previous years.
Thank you.
Coming back to the provision, the impact of the interest rate was positive for around EUR 10 million last year, in the first half. This year, we have a positive effect of almost less than EUR 5 million. I think you mentioned also another item in the PNL, Proventi Netti , which is, I mean, it's positive because there is a transaction between some financial advisor, they transferred the portfolio. It's something which is neutral in our PNL overall, but we account the cost in the payout, we have a benefit in this line.
When we have this transaction, we have some, I mean, the positive is in the other net income and the cost is accounting the payout, but it's neutral in the P&L overall.
Sorry, this is the second year that we have this phenomenon only in Q2. It is a chance, just by chance, or it's regularly booked in the second quarter, this transaction with the ESA?
It depends when we have the transaction. I mean, it's something that can be in every quarter, basically.
... The important point is that it is neutral in the, in the overall.
Okay, thank you.
The next question is from Elena Perini with Intesa Sanpaolo. Please go ahead.
Yes, good afternoon, and thank you for your presentation. The first question is on your expected tax rate for the full year, because the first half was around 27%, basically due to lower performance fees and high net interest income. I was wondering what is the outlook for the second half and for the full year? Another question, I don't know if you have already mentioned, but I was disconnected for only a few or two minutes. What is at the moment the cost of retail funding? Thank you very much.
The first question, tax rate. I do not expect significant improvements because the mix will be still in favor of, let's say, fee generated in Italy. I would set a range between 25%-27%, depending on the topic that I explained before, so performance fee, so depending also on the market. On the retail, the overall cost is... You're talking about the cost of client deposits, so the cost of funding is 0.31%. If it's, instead is about the asset management business, because sorry, Elena, can you repeat if it's about the net interest income and the cost of funding for client deposits, or it's about the funds? Sorry.
Retail funding.
Retail funding. If it is about retail funding, it's 0.31. In the projection for the full year, you have two scenarios. The first one is that the cost of funding will increase at 130, and the second scenario is, it will increase to 0.6%-0.7%. It means twice. Considering the doubling of this cost, we will achieve EUR 280 million of net interest income. This number is confirmed also for next year, due to a higher cost of funding for next year, in the range of 0.9%-1%, and a stabilization of client deposits. Thank you.
The next question is from Giovanni Razzoli with Deutsche Bank. Please go ahead.
Good afternoon to everybody. Thank you for taking my question. Just a clarification on this. Basically, you see that, you know, underlying NII guidance for the full year is EUR 250 million-EUR 160 million, with the assumption of doubling the cost of funding at year-end. It seems to me that you are still extremely good and committed, it would imply a material deceleration in the second half. If I make my numbers correctly, from EUR 150 million to something in the region of EUR 100 million, or slightly above that. I was wondering what kind of the new conservatism have you included into this?
Second question, if you can share with us, sorry if I missed it, the share of BTP Valore that you had in the, in, with this, placement. The third point, you mentioned that you expect the normalization of the new business generation on the insurance business from the second half. Did I get it correctly? Thank you.
Thank you, Giovanni. Net interest income, the expectation is at EUR 280 million. EUR 250 million-EUR 260 million was the same framework presented in the previous conference call. Simply updating the framework, the target would be EUR 250 million-EUR 260 million . Since now, you know, we have only four months to the end of the year, we gave, we decided to give always a very conservative target, but more realistic. The assumption is a cost of funding of 0.6%-0.7% for the last four months. With this assumption, the overall net interest income for this year will be above EUR 280 million. BTP Valore, BTP Valore, the overall amount was around EUR 360 million.
In the insurance space, I confirm that we do expect, especially in the fourth quarter, an acceleration on the insurance wrappers and a reduction of the outflows on the traditional life insurance. As a result, the net impact will be positive, so positive net inflows.
Thank you. Thank you very much.
The next question is from Alberto Villa with Intermonte. Please go ahead.
Good afternoon. I have a few questions. The first one is on your comments on the dividend. You mentioned the accrual of EUR 1.2 in the first half of 2023, and also you mentioned possibly doubling this amount at the end of the year. Should we take this payout ratio in the region of 80% and EUR 2.4 under normal condition as a sort of base for the dividend of this year? The second question is related to your comments on the recruitment. I was wondering, with improving market conditions, I guess some clients and some advisors are still looking at what has happened in 2022.
Given the more favorable conditions we have had so far this year, can we expect already in the second part of the year, a revamp of the recruitment activity to more normal levels? Or is there any other, let's say, element, competition or cost of recruitment that has changed compared to the past? My final point is on your guidance on the client deposits. You see, you didn't change your expectation of EUR 10 billion-EUR 11 billion at the end of the year. You were at EUR 10.4 at the end of June.
Are you already experiencing some improvement in the, let's say, outflows you have had in the first part of the year from deposits in July, or you expect it to be happening more later on in the year? Thank you.
Thank you, Alberto. Let's start from dividend. The payout, the implied payout ratio is 81%, 100% of payout ratio on variable net profit and 80% on recurring net profit. What I mentioned before is that annualizing, let's say, the dividend yield, you would see a 7 plus, 7% plus. The assumption of 2.4 is, it could be, but it's not the base scenario. Let's see the net profit in the second part. Just to say that we want to pay back a significant part of the net profit. This 81% is a good proxy of our commitment to remunerative growth. For recruitment, this is not about any changing in the market dynamics.
There's no competition, no cost. It's about performance. It's about the performance of last year, it's about the reporting period that should be end in the first half, so to sharing and the results of the bad performance of last year. I do expect some good recruitment because we are in discussion with senior bankers in during the fall. to see a full normalization, we need some performance also on the bond portfolio, so stabilization over the years. I would bet on normalization in the first part of next year. Again, we are very attractive, and I'm not worried for long-term trend. It's just about the continued situation.
For client deposit, just to explain a little bit better the numbers, our guidance is in the range of EUR 10 billion-EUR 11 billion . It's about the numbers of the liabilities that now accounts for 11.2. This is 11.1. This 11.1 include also some extra liquidities, not just the current account that you see in the total assets of the client.
Okay, thank you.
The next question is from Domenico Santoro with HSBC. Please go ahead.
Hi, good afternoon. Just a few questions on the sales product. First of all, I see the banking fees are increasing steadily, you know, over the quarters. I just want to understand if you can give us a bit of visibility on this line for the second part of the year. Same, I just wonder whether the Operating Margin already capture, you know, the market performance of the second quarter, or from now, you expect a bit of improvement in terms of AuM margin?
The second question that I have is that in case, you know, sales on mutual funds that prove to be stronger going forward, I just wonder if we shall see a sort of stabilization of banking fees instead going forward, because I'm not sure if what I say makes sense, but those kind of products are sort of complementary in the sense that you either buy one or the other one. Just to model these lines in the future. The other question is about the payout ratio to financial advisors. Shall we include in our model the same seasonality to last year, or the one that we see in Q2, given the structure of your sales, is something that we can take as a sort of a benchmark going forward?
The performance fees, have I understood correctly that you expect something like EUR 10 million in the second part of the year? Thank you.
Thank you. For the banking fees, let's say that in the second part of the year, there is some seasonality. Summertime and the end of the year, where you run for the incentive scheme. The banking fees in the second half normally is weaker than in the first half. Overall, you are right, the other fees are in part complementary to the recurring fee, the other recurring fees, so management fees. Let's say that thanks to all the projects that we have implemented and delivered, during the last three years, we increased structurally the turnover.
You, there is a part that is due to the context, to the context of interest yield, and part is due to the new set of platforms and the initiatives provided to the financial advisors. You, you have part of it is seasonal due to seasonality, part is due to a structural shift. I'm confident that the banking fees will contribute to the, our PNL in the future years. Of course, my view is a normalization of management products, management fee and products in with recurring fees. In this case, probably the overall impact of the other banking fees and others will be a little bit lower.
Let's say that I'm positive because there is a structural increase in volumes, is in turnover, while advanced advisory fee, fee on AUC is a structural trend. In terms of AuM margins, I do not expect an increase compared to the 1.43. We set a target of staying above 1.41, and we confirm this target. Let's say that we are above this guidance, and I don't have any particular topics to think of a reduction. Payout ratio, I'm very positive on the ratios that, on the KPIs that we share, and that I always communicate during conference call, that it's about 36% on the ordinary payout, no more than, let's say, 12 in the incentive, depending on the mix, and, around 6% for third parties.
The overall should be 53, or around that 53. I don't see structural changes. Performance fee, let's say that if you have the assumption of positive performance, one single-digit performance in the equity, and positive performance, slightly above zero in the bond portfolios, we could stay in the range 10%-20%, just because we have EUR 1.7 billion of assets that are almost at a high-water mark, and other assets that are close, too. Depends mostly on the view that you have on the markets. Thank you.
Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Gentlemen, there are no more questions registered. I turn the conference back to Mr. Mossa for any closing remarks.
Are you sure that we do not have any other questions?
Excuse me, there are two questions. The first one is from Luigi De Bellis, Equita. Please go ahead.
Yes, good afternoon. Two quick questions for me. The first one is on the capital ratio, because you had a very strong organic generation in the quarters, thanks to both higher capital and lower risk-weighted asset. Can you elaborate on this? What we can expect for the coming quarters if this dynamic will continue with this speed? The second question on the Swiss market. Can you elaborate on what we can expect in terms of main KPI for 2024, namely recruitment and net inflows? Thank you.
Thank you, Luigi. On capital ratio, let's say that we will be more generous on the dividend policy in the respect of the guidance. The assumption of 100% of payout on the variable net profit and 80%, that is the upper range of the target we gave in our strategy, are confirmed, and I will take all the room to remunerate the shareholders. It's about, first of all, capital ratio, higher capital ratio, a good buffer to a generous dividend policy. Second, let's say that the overall effect of capital ratio is also about a reduction, overall reduction of the balance sheet. I do see a stabilization with the balance sheet next year, so I do not expect significant increases in the capital ratios....
Let's say that is a confirmation that we are a capitalized bank, and that we say we have a consistent growth, a profitable growth, but also the new narrative growth. Swiss market, from, let's say that in the first 12 months from the launch of the bank, so from March, I do expect at least EUR 1 billion of inflows.
Thank you very much.
The next question is from Marco Nicolai with Jefferies. Please go ahead.
Hi, thanks for taking my questions. I might have missed this, but last quarter you gave the net new money guidance between EUR 5.7 billion-EUR 6.7 billion for 2023. Did you change anything in this? I had another question: could you please remember me the difference in marginality between in-house funds and third party funds? Thank you.
Thank you. At the moment, we confirm the guidance in the range of EUR 5.7 billion-EUR 6.7 billion , where the increase of the guidance mostly depend on the recruitment. In the next conference call, I will give you an update because, again, there is a great interest around the bank, but in the next few weeks, I don't see significant recruitment activity. Depends more on September, October, in the recruitment part result. In-house funds and third-party funds, let's say that in general terms, I would say that before taxes, you have on average 40-50 basis points more, but just to give you the exact numbers, I will hand over to Tommaso.
Let's say that the third party funds have a pay-in around 110 basis points. While for the average in-house has a pay-in of around 170, 190, it depends on the asset allocation of the underlying funds. There is basically a 30%-40% of difference in terms of pay-in, gross pay-in. We have the payout that, as you know, generally it accounts for the 35%-36% of our pay-in.
Thank you.
Mr. Massa, there are no more questions registered at this time.
Great, thank you for participating to our conference call, and have a great vacation. Bye.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.