Conference operator. Welcome, thank you for joining the Banca Generali first quarter 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 0 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, and thank you for participating to our first quarter results conference call. Before starting, I would like just to inform you that we have changed some slides just to better represent the business plan, the business model of the bank. The first quarter was pretty impressive on different aspects. First of all, the total assets of our client achieved the highest level ever, basically thanks to an increasing productivity of our existing sales force. On the financial numbers, pretty impressive, the new highs of the recurring fees and the recurring net profit, thanks of course to very strong net interest income but also sticky recurring revenues, thanks to the diversification and cost control.
The capital ratios and the liquidity ratio strengthened in the last three months. Even more important, we are very confident to achieve and to deliver all the targets of our three-year business plan. Page 4, net profit closed at EUR 83 million, of which EUR 77 of recurring net profit, while variable net profit closed at EUR 6 million. A positive contribution in terms of performance fee. Let's now go through line by line our PNL, starting from page 5, net financial income. Net financial income close to EUR 75 million, of which EUR 71 comes from net interest income with a margin of 1.8%, while the trading result stood at EUR 4 million, in line with the same period of the last year. Page 6, total gross fees slightly down.
We close at EUR 143, of which EUR 138 coming from gross recurring fees. As I mentioned, we start receiving some performance fee, EUR 5 million. This is thanks to our flagship fund, the in-house flexible fund that is at the high-water mark level, and the total assets are at or above EUR 1 billion. If we go through the total gross fees, we see management fees down 5%, it is all driven by a reduction of average managed assets, while margins are keeping pretty well at 1.43%. Pretty impressive at page 8, the result of other fees. Other fees closed at EUR 38.3 or 10% higher than the same period of the last year, thanks to the contribution of all the measured components.
Entry fees, 10.7%, thanks to higher volumes in primary market structured certificate. Brokerage, impressive acceleration of retail brokerage and a contribution at 11.6%. Advisory fees, we achieve a new high, we will detail later, EUR 9.4 million, and also other banking fees well supported by expanding volumes. Focusing on margins, you see that both measure, so the overall margins and the margin excluding the more cyclical components are as been steadily in the last quarters. Moving on cost side, page 9. You remember that we decided to show specifically the cost of the payout on net interest income.
It accounts for EUR 2.5 million, while the total fee expenses for revenues, incentive scheme and third party payments, stood at EUR 122.4, or down EUR 2 million on year-on-year basis. In terms of payout ratio to the network, no news, good news. Everything is in line with our guidance. Ordinary payout 35.6%. Incentive payout, 10%. Also the payout to third parties is stable in line with our guidance. Moving on to the operating cost. You see in the graph on the top of the page some one-off, which is basically, related to some M&A activities, some analysis we run, some potential targets that when we didn't go through, and then, mainly retirement. Sales personnel costs are in line with some seasonality, it's no news also from this side.
Core operating costs closed at +6% in line with guidance, including all the inflation impact and all the projects that we are developing and including also, of course, the BG Suisse. Overall, the ratios continue to stay at best practice level with the cost-to-income ratio close to 33%. Summing up the first part, we can say that the operating result excluding performance fee were very strong, thanks to the increase in net interest income, fee, recurring revenues, but also cost discipline. If we move below the operating line, the total non-operating charges amounted to EUR 50 million, or EUR 2.4 million higher than a year ago.
To work on the tax rate, closed higher than our guidance, close to closed at 27.4%, which is basically due to major effect, the increasing contribution net interest income and lower performance fee. Also in this case, we will expect a normalization in the next quarters, thanks to a normalization of the market and so forth for the performance fee. On the balance sheet, you will see new slides to show in more detail our solidity and the strength of our balance sheet. Page 14, we start from total assets, and you see the trend on the last year, and you see also the deep dive on interest-bearing assets. Overall interest-bearing assets closed at EUR 15.5 billion or -2%.
In terms of margins, you see the overall margins stood at 2.3 with all major components, of course, increasing the contribution. You have 2% for loans to banks and other liabilities, 3 point almost 5 the loans to clients, and about 2% the financial assets. Next page, you see a deep dive of the financial assets. First of all, the trend and the breakdown. You see the percentage of govvies, Italian govvie bonds is constant at EUR 5.4 billion or 47%. 22% of other govvies in EUR terms. Then you see significant contribution on covered bonds with very high ratings.
On the right of the slide, you see first of all that we have a very high quality financial assets with almost 96% which is eligible for ECB. This 96% equals to EUR 10.9 billion, and we have EUR 8.2 billion of high quality liquid assets. That number is pretty impressive. The duration is very low, and we have more than 50% of the portfolio with a maturity by the end of 2025. On the liability side, at page 16, here you see the overall liabilities and equity, then zoom on total deposits. Total deposits amounts to EUR 15.2 or 2% lower than the end of last year, of which EUR 12 billion comes from clients' deposits.
Cost of funding closed at 0.5, with a cost of 0.24 for retail clients and above 2% for deposits held by banks and institutions. Here on the right, you can see also some more information on our current account. First of all, the average client deposits deposit balance stood at EUR 34,000, of which clients with more than half million EUR, the average is slightly lower than EUR 100,000. For affluent, ultra-affluent clients, the average is EUR 17,000. Even more important, the ratio of HQLA on total client deposits stood at 68%. That is probably one of the highest ratio in Italy. In terms of Total Capital Ratio, old news. Total Capital Ratio stood at 17.1.
Once, we have posted for this first quarter, 81% of net profit for the dividend policy. We posted EUR 67 million for the dividend of this year. Leverage Ratio, 4.5, and Liquidity Coverage Ratio and Net Stable Funding Ratio definitely, above the required requirement of 100. I think that the balance sheet represents probably one of the main strengths of our bank, very flexible, very liquid, and I say that we can manage the overall assets also to manage Net Interest Income, and you will see in the business update, some new guidance. Page 19, there is a new representation. First of all, on the, at the top left, you see the total assets, highest level ever. It's about almost EUR 86 billion.
You see that the Assets Under Management start resuming, so it's a little bit higher compared to the end of last year. Then you see the significant increase of Asset Under Custody and the slight reduction in banking assets. On the bottom of the page, on the left, there's a new information that is about the Asset Under Advisement with an explicit fee. You see that now asset Advanced Advisory account for EUR 7.8 billion or 9% of the total asset. Even more important, if you focus on the breakdown, you see that the orange part accounted for EUR 3.9 billion of Advanced Advisory with the underlying invested in stocks and bonds, so in Asset Under Custody.
You see that this part increased by EUR 1 billion in 1 year. On the right, you see a new representation because this is about all the assets in the bank with a recurring fee. We have the managed solutions, we have the traditional life policies, and we have the part of Advanced Advisory with the underlying invested in asset under custody. You see that the overall portfolio with an explicit recurring fee amount at 70% of the total assets. In the business update, we will see some more information on that. Page 20, we see on the left the asset management product. Pretty impressive the result of the financial wrappers at the highest level ever, EUR 9.6 billion.
We see a slight reduction in the fund industry, in house and third party. On the right you see a lower contribution in terms of total assets of the insurance products. Here I will comment during the last chapter of the presentation. Page 21, we have the inflows. As we already said, that the inflows are slightly higher year-on-year. Let's focus on the quality of these inflows. Of course, the major part comes from asset under custody, so it will be important to focus on margins on the asset under custody. The managed solution accounted for EUR 400 million. On the right you see that this EUR 400 million comes from financial wrappers and funds.
You can also see at the bottom of the page, the net inflows on Asset Under Advisory. They closed at EUR 300 million, of which EUR 400 million is an explicit fee on Asset Under Custody. If you want to work out the total of the net inflows invested in risky assets with a recurring fee, you have just to add these two numbers, 0.4 and 0.4, point 4, for a total of 0.8. Page 22. It's impressive result. We have been increasing the productivity of our existing sales force, EUR 1.3 billion, thanks to the implementation of some strategic projects.
We start to see some results for the project on the data. We are just at the beginning. I'm very confident on the inflows, especially for the existing sales force, thanks to all the projects that we are executing. If we focus on the recruitment, the net recruitment, the contribution was very low, not for the part of out. The phase that who decided to leave the company because the retention is probably the highest ever. We have just EUR 100 million outflows, probably the lowest level ever. For the recruitment, for the in, because as I mentioned in the previous conference call, in this moment it's very difficult to transfer portfolios with performance in the range of -10, -12. The interest it's pretty impressive.
In terms of head count, we have 29 new colleagues, of which 9 without recruitment package or talent, the junior phase, 11 from banks and 9 from, say, financial advisors. Page 23, we have also an update on the inflows in April. We closed the first 4 months with EUR 2 billion of inflows, net inflows. Focusing on the right, you see that the managed solution closed at half billion. If you look at the bottom, we have EUR 600 million under Advanced Advisory with the underlying invested in asset under custody. It means that more than EUR 1 billion provide recurring fees with an underline that is invested in risky assets.
In terms of banking assets, in terms of traditional life insurance, you see, in both cases that the outflows are low. I will focus more on this in, in two minutes. New recruitment. April was a pretty positive month with 12 new colleagues. The total new recruits for the year, stood at 41. I think that from a commercial perspective, three major considerations. First, we achieved the highest level of assets. This is really important because I think that as usual, there is some seasonality in how we invest these assets, but in the long term, higher the asset, higher the profitability for the bank. Second, the acceleration in inflows comes from existing sales force. We, we are achieving higher productivity.
Third, that recruitment is not contributing to the numbers as it happened in the past, but there is a very important great interest from different players. Once we're gonna see a normalization of the market, I'm confident to see a restart also of the contribution from recruitment. Now let's enter the last chapter of the presentation, that is about business update. Here, you have two focuses. The first one is on net interest income, and the second is on client assets, the major trends and major consideration on what we have to expect for the last part of the year. Page 25, net interest income. If you remember, during the previous conference call, we gave a guidance at or higher the net interest income at EUR 200 million, and there were some assumption.
The first assumption was about the cost of funding. We set the cost of funding, the average cost of funding for the year at 130 basis points. The second assumption was about the deposits, client deposits, and we set the guidance to an unchanged level. We said, basically, we don't see the case of increase in deposits, and we want to be very conservative in defining an expected cost of funding. Of course, we can either work on the level of deposits, pay less cost of funding, or we can reduce the cost with deposits, optimizing the net interest income. In the case that we discussed during the last conference call, 130 basis points and stabilize.
We have just update this projection, trying to maintain the same assumption that we discussed at the beginning of the year. Just maintaining as a cost of funding 130 basis points for the remaining 8 months of the year, just because April was again a very positive month for our net interest income, with the cost of funding almost in line with the first three quarters, 3 months. Maintaining a cost of funding from May to December at 130 basis points, this would imply an average cost of funding of 100 basis points, okay? This is the first assumption. Second assumption, very conservative.
If we project linearly what happened in the current accounts in the first quarter to the remaining three quarters, this should set a range between EUR 10 billion-EUR 11 billion of client deposit. At this condition, you will achieve a net interest income of EUR 230 million. This EUR 230 million is a floor. How can I work out a potential, just a number for the full year? We can give you the sensitivity to the cost of funding. Any 10 basis points saved in the cost of funding would impact on a period of 8 months, EUR 8 million. EUR 1 million per month. You want to have, let's say, this is the floor, EUR 230, and an average cost of funding 100.
If you want, let's say, an optimistic scenario, you can set the cost of funding at almost 50% of 100, so around 50 basis points. This could be a range between 50 and 100 basis points of cost of funding. The same can be said for the client deposit. If I look at the numbers in May, I should be very optimistic. Since we don't want to pass through net interest income to the client deposit, we maintain this very cautious assumption to a slight reduction, ongoing reduction in deposits. I repeat, in May, I'm not seeing this kind of trend. April was pretty positive with a strong acceleration. May we see stabilization, but we continue to maintain a very low cost of funding for client deposits.
Let's move on the second part of the business update, that it's about the client assets. First of all, we are all convinced that our business is to sell and to provide advisory on managed solutions. Having said that, I do expect a normalization of the overall contribution of Assets Under Custody in medium terms on overall assets. I see tremendous upside there. We have to understand in depth what we have been doing in the last three years to increase margin on Assets Under Custody. We are in a unique example in Italy that succeeded in increasing systematically the profitability of Assets Under Custody. Page 26, you see, first of all, retail brokerage. EUR 5.1 billion compared to EUR 1.8 billion 1st quarter 2019, is almost 3 times.
Primary class structured products, EUR 5 half billion in just 1 quarter compared to EUR 100 million in the first quarter of 2019. Advanced Advisory services, fee-based business with the underline of assets under custody from EUR 1.6 to EUR 3.9. At the end of the day, the margins of these initiatives stood at 0.44%. This is about retail clients. It accounted for almost EUR 19 million in just 1 quarter. It's true that we're gonna see a normalization of assets under custody in the next quarters and next year. It's also true that we found a way to get profitability also on this part of the portfolio. Second, we have a terrific competitive advantage in the high-value investment services. What do I mean?
High-value investment services are of two kinds: financial wrappers and Advanced Advisory services. If you look at the graph, the acceleration, so the growth has been pretty impressive, from EUR 9.3 billion to EUR 17 billion. This is all driven by in-house capabilities and is best practice in the market. This is of course, all about also any doubt on ban on inducement because the answer to the inducement is to be very strong on this kind of services, and we are definitely best in class. If you look at the margins and the revenues coming from these two services, again, the numbers are pretty impressive. Financial wrappers stood at 1.38%. Advanced Advisory considering the underlying, the profitability of the underlying, at 1.45%. On average, 1.41%.
This is again, another way to see the quality of our financial advisors and how to provide two complimentary services to high level, they say the high-end clients. Of course it's not just about investment solutions, but it's also about, let's say, bread and butter products. If you move on to page 28, you see fund results. Here you see a different representation. You see three colors. The first consideration is about the red ones, in-house funds. You know, we reviewed our offering in October and since that, every month we got positive results. Not very significant, not impressive, but we say steadily growing and also with a different trend compared to the third party plain vanilla products. Plain vanilla products are the gray one. You know, asset management is suffering and third party is a proxy.
You see that in the last three months, the contribution is negative. You know, this is due to the fact that there is a disaffection on this kind of products. The orange part is about specific target initiatives organized for Banca Generali. An example, a target fund launched with JP Morgan in February. You see that the orange contribution is positive. The change in strategy at the end of last year in focusing more on in-house products and developing partnerships with target funds is providing results. Last part of the presentation is about page 29 of insurance. Again, here we have to invest some time to understand the trend. Let's start from the red focused numbers, that is about traditional life insurance.
We shared several times the opportunity to reduce traditional life insurance, also, to reduce the risk of diluting the yield for our existing clients. If you look at the monthly trend of 2022, also in that case, the outflows were pretty impressive. We saw an acceleration of outflows driven by two facts, increasing interest rate and some bad news on other insurance companies. We decided to reopen the offering of this product. You see the sharp deceleration of outflows in April. I can assure you that in the second half the numbers will be different. If you focus on insurance wrappers, same story. Insurance wrappers invest also in traditional life insurance. At the beginning of the year we had negative inflows. We reviewed the offer.
We focused more and more on efficiency and the results are pretty clear. Again, positive inflows. We represent the lion. Generali is the strongest brand in Italy and is a competitive advantage. This, combined with the investment services will be a lever, a competitive advantage also to strengthen the inflows in managed solution for the remaining part of the year. Page 30 is about the financial target. I already said we confirm all the targets. Consistent growth is about net inflows. As already mentioned several times, we are increasingly focused on product mix. I see some seasonality in the peak of assets under custody. It's good to continue to get inflows, to add inflows, we convert these assets under custody also in asset and managed products. The project on data-driven approach is the solution to accelerating productivity of our existing sales force.
We are back to in-person activity meetings, and this is very strong in terms of utilization. This explains why the churn rate is so low. Profitable growth. We gave very important numbers at the beginning of our three-year business plan with a growth in the range of 10%, 15%. We raised the targets at 15% and 20%, and we confirmed that. We increased the guide as with net interest income, and we already gave you some flexibility on the guidance on net interest income. In-house solution are working pretty well, and we know how to extract value also from assets under custody. Last but not least, remunerative growth. We already discussed several times that we are one of the fastest growing company, but we care about the remuneration of our shareholders.
In May 22nd, we will pay EUR 1 for the dividend payout of the last year. We already paid EUR 0.85. We are perfectly in line to achieve also this result. Now I will hand over for any questions. 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 touch tone 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 Elena Perini of Intesa Sanpaolo. Please go ahead.
Yes. Good afternoon, thank you for taking my questions. I've got some questions. Actually, the first one is on your net interest income guidance because just to check out if I have understood correctly. If we assume a cost of funding of 50 basis points instead of 100 basis points, we recover 8 multiplied by 5, so approximately EUR 40 million of an NII. Just to check. The second question is about your performance fees, which were quite good for this period.
I was wondering, if you can give us some data about, you know, some other potential funds that are well positioned to recover performance fees in the second quarter? Looking at your tax rate, should you come out with a net interest income of, in line with your guidance, should we assume a normalization of the tax rate towards 25%, or for the current year, you still see a higher tax rate?
Finally, on your net inflow guidance, I don't know if you can provide us with some assumptions or some scenarios about the managed assets component also considering that it seems that the situation regarding life insurance is improving? Thank you very much.
Thank you, Elena. Let's start from net interest income. You are right. If we estimate or project a cost of funding of 0.5, the overall result of net interest income for the full year would be EUR 270 million. We gave the floor of EUR 2,030 million just because, you know, we love to be conservative and then a bit. Now I must be a little bit more optimistic because April worked very well and May is working very well. I gave you a range so that you can set your own expectation. On performance fee, the performance fee of our flexible fund, because the flexible fund was basically amazing. It accounts for more than EUR 1 billion.
This fund now is at the high water mark level, and it can provide other performance fee. In general terms, we have almost 20% of assets that could achieve performance fee this year. I'm very optimistic for next year. This year, it depends mostly from the market, but we have some flexible strategies that are performing very well. That is the reason also why the financial wrappers are working well, because we are performing better than the market. In terms of tax rate, let's say the guidance, I mean, I have in mind the guidance for next year. This year, depending on performance fee, basically we should stay above our guidance. In case of a recovery of performance fee, of course, the guidance will be targeted.
Like I said, I'm not so sure to have significant performance fee this year. We set a target, internal target between EUR 20 million and EUR 30 million performance fee a year, with an assumption of from today to the end of the year of performance of 1 percentage point, 2 percentage points as overall. The last is about interest guidance. I'd love to be conservative, but in this case it's difficult because I think that in this case, the quality of our professional will drive an excellent result. In terms of life insurance product, I would be surprised to see numbers below zero as a net result for the second half. We could have some positive surprise. The high value investment services that both provide a recurring fee.
I'm talking about financial wrappers as well as Advanced Advisory services are doing very well. I'm confident to continue to deliver on these two services. In terms of funds, I think that the average that we are achieving in the first four months is again a floor, and we could again have positive surprise also on this side. Of course, this consideration are in a situation in which the market stay at these levels. In case of positive surprise of the market, I would be even more confident. In case of negative performance, we should review this kind of targets.
Okay, thank you very much.
The next question is from Giovanni Razzoli of Deutsche Bank. Please go ahead.
Good afternoon to everybody. Thank you for taking my questions. The first one is on your strategy in terms of product mix. You have showed an increase in the percentage of Assets Under Advisory. I was wondering what percentage of total assets do you plan to move under that model in, you know, 3 years' time from 9% today. How can this impact the overall remuneration of your managed assets? I've seen that more or less, if I'm not mistaken, on these products you do have a slightly higher than 40 basis points of remuneration, which compared with slightly above 1% on recurring fees on total assets.
I was wondering whether we should, you know, take into consideration those two data points for making our assumptions going forward. Related to this, I was wondering whether you do plan to increase your exposure to this, you know, product as a kind of, you know, defensive strategy, if possible, regulatory changes, which doesn't seem to me to be taking place, at least in the short term. The second question, thanks for the disclosure that you've given. You mentioned that you have some costs in terms of M&A scouting, without clearly mentioning what you have in mind. Is it something for the domestic market or the foreign market? I think you are referring to something like bolt-on acquisitions.
The very last question, as I have you on the line, allow me the opportunity to ask you this. We have seen that so far the asset gatherers are, you know, a little bit out of the traditional banks in terms of remuneration of their, you know, deposits and in general, their clients. I was wondering whether going forward you do the defensive strategy from the banks, also a similar move? So far we've seen divergent trends between you and the commercial banks. Thank you.
Thank you. Let's start. Thank you, Giovanni. The impact of Advanced Advisory services on total assets, we set the target during the Investor Day in the range of 10, 12, if I remember well. I'm very confident to achieve this target. Consider that in terms of profitability on average, Assets under Advisory provide higher margins than, let's say, financial wrappers, especially on private clients. We show in the presentation a profitability in the range of revenues above 1.4%. Of course, the Advanced Advisory services normally is about private clients, so it's a very good margin if you think of the kind of clients.
As I mentioned before, even if you see an acceleration of the Advanced Advisory Services with the underlying of assets under custody, these assets, the assets invested in stock and bonds, provide good profitability. I show you the slide with the volumes implied in brokerage, Structured Certificate, and so forth. Of course, under Advanced Advisory Services, you use more and more of these kinds of services. To cut long story short, I think that especially if you have in mind that sooner or later we will work through higher transparency or inducement ban, this is the way. financial wrappers and Advanced Advisory Service. I don't believe that we go in that direction soon. I am sure that we are accelerating transparency, and I consider Banca Generali best in class on this topic.
In terms of defensive strategy and product and so forth, we say that, I do expect some rethinking of the asset management industry, where you give more transparency over the underlying, where you focus more on the expected into maturity and, or something that should converge to financial wrappers on one end or to the traditional, let's say, bond on the other one. We are working in this direction. I think that we are ahead of the market in terms of innovation products. In terms of M&A, you're right. We are scouting different opportunity, always pretty small, always to accelerate integration of capabilities. At the end of the day, in this moment, we do not see any other opportunities, excluding the ones that we closed, that is Main Street.
That, in my opinion, is a great advantage in terms of sustainability and business linked to sustainability. We scouted basically small companies in both in Switzerland and in Italy. Again, I confirm that after we closed the deal with Main Street, we don't have any potential deal in this moment on our desk.
Thank you.
The next question is from Alberto Villa with Intermonte. Please go ahead.
Good afternoon, and thanks for the detailed guidance, especially on the net interest income. I have a few questions. The first one is on your conservative provisioning you made in the first quarter. Since we have been hearing other banks being very or quite positive on the cost of risk, I was wondering if there is any specific reason for this provision or is it just a generic one you are booking? If you can provide us an indication of what are your expectations in terms of provisioning provisions for the 20, the entire year. The second question is on the brokerage activity. You have shown a significant increase in volumes but a steady revenue contribution.
I was wondering if we can expect going forward a higher contribution from brokerage revenues, thanks to higher volumes, you are expecting or if there is any reason why instead it should be considered to be quite flattish going forward. I think I'm basically done. Just one other point is on the cost of funding, the 24 basis points you are seeing now. You have had also some campaigns of repos. Is that something that could accelerate, you expect to accelerate in the remainder of the year, and how this could eventually impact the cost of funding? Thank you.
Thank you, Alberto. I will hand over to Mauro for the provision. Just to say the short answer is a generic one, and for the target of the full year, I answer to the 2nd and 3rd one, and then I will hand over to Mauro. Brokerage, I see stable profitability despite higher volumes, just because the mix is in favor of bonds in this moment. The increasing volumes offset lower margin of the single trade. You know, Saxo is working pretty well. All the activity also on the secondary market of structured products could start gaining momentum because we start also to trade on the secondary market or the primary assets or the primary activity. On the cost of funding, 2 consideration.
The first one that we set apart EUR 10 million for initiatives in the next 8 months. I don't know whether we're gonna use it or not, but we set apart EUR 10 million. Second consideration, we have almost EUR 2 billion of current accounts with the remuneration with current accounts linked to the Euribor, to the percentage of the Euribor. Euribor is normally 60%.
The projection that I provided as a positive scenario takes already in account the increasing weight of the cost of this fund, of this current account, plus the money that I set apart for any potential initiatives on repos that this time are very negligible and just EUR 100 million in the last, let's say, in the last weeks, so we are talking about nothing. I set apart some cash just in order to indicate accelerating inflows and to manage any specific campaign. The cost of funding that we communicate of EUR 100, you well understand that would imply a significant acceleration of cost of funding for commercial banks. Just to answer also Giovanni.
I don't see an acceleration of cost of funding from the commercial banks, we have decided, and we are trying to reduce as much as possible the pass-through, and it is very positive also for us. As other players, we use some small campaigns, and we are part of the book that is remunerated. Current accounts remunerated, especially for corporates, for business, normally important entrepreneurs. This part is in common also for the commercial banks. You cannot see that just because it's a small part on the total balance sheet of the commercial bank. On entrepreneurs, I say that there is some competition, and almost all the players pay some part, some percentage of the arrival.
Massimo, on the provision revision, I confirm that the provision that we did was a generic one. Basically, we didn't have a particular issue to cover the provisions. Going forward, we expect to stay in the range between EUR 30 million, you know, for the year, EUR 30 million-EUR 35 million. This is what we could project today in terms of provision for the full year. We have been very conservative in the first quarter. We now expect to have the same number for all the quarters going forward.
Okay. If I may, just little follow-up on the expenses for the network, on deposits. Should we expect there we were seeing it starting from the fourth quarter of last year and should we expect this number to grow significantly in the coming quarters, trying to retain, I would say, liquidity?
No, the short answer is no. We pay 15% of the spread. There is a cap at EUR 60,000.
On each account.
On each account. We say that the worst case is around, we pay between the range of between EUR 7 million and EUR 10 million of payout for the full year. Because, of course, it depends also on the assumption that you make on the liability side. Because if you have a higher cost of the liability, you reduce the spread on which you pay the banker. While if you have a bigger spread, you have a higher payout. I mean, but our assumption is between seven and 10, so let's say-
3 months, EUR 3 million for per quarter is a very conservative assumption. Between 2 and 3, let's say.
Okay. Thank you. Thank you very much, Arturo.
Welcome.
The next question is from Gianluca Ferrari of Mediobanca. Please go ahead.
Yes. Hi, good afternoon, everyone. I'll start again from the NII. First of all, I would like to understand how much is the so-called non-transactional liquidity. I appreciate the breakdown of your deposit balance among the two segments, above 500K and below 500K. Could you tell us also how many clients are in the two brackets or eventually, what is the level of the non-transactional liquidity? Linked to this, can you share also a bit more the managerial view or the strategic view that took last conference call, the 90 basis point cost of retail funding going up to 130 and now down again to 100. What were your thoughts?
You were expecting the sector to fight a bit more on deposits, then you realized that nobody else is moving, then you can be a bit more soft in terms of remuneration. Is that the rationale? You prefer to lose some EUR 1 billion the first four months and EUR 2-3 billion if you take your full year to 3 guidance instead of overpaying for deposits? What are your thoughts behind this change in the guidance? Also on the banking book, I was noticing that you keep remaining super cautious in terms of duration on the asset side, on the banking book, much more cautious than some of your competitors, and you are still a super liquid bank. Why not taking a bit more risk on the banking book, passing through parts of those...
part of those extra earnings to your client and to, let's say, retain and to make more loyal your top-end clients? A bit of thoughts on this. The second one is on the Ramo I, on the less traditional. What are in practice the specific moves you are planning together with Generali Group? Are you launching new Ramo I, new segregated funds to be offered only to existing clients? Is this a way to soften the level of outflows or there are other moves behind it? Thank you.
Thank you, Gianluca. Transitional liquidity, I can answer like this. We see outflows when the stock and current account is above EUR 450,000 as a general rule. I can see 30, 40% of assets that could be again, could be part of this story. The assumption to project the result of the first quarter is a very, very conservative assumption because on average, on the affluent client, not again, but also in the current clients, most of them, the overall exposure to current account is already pretty low. I would say that they consider transitional 60, 70% of the overall liquidity from a commercial perspective. The second question is the cost of funding.
I try to explain a little bit better the exercise we run. In the previous conference call, we set a cost of funding of 130, and I confirm also in this projection 130. 130 is applied only for the remaining 8 months of the year. If you consider 0.25 for 4 months and 1.3 for the remaining 8, the result is 100. The conservative assumption of 100, 130, is unchanged. My impression is that thanks to the resistance of the commercial banks, the pressure is probably lower than previously expected. In terms of duration, I mean, from a financial perspective, we are leaving a context with an inverted curve, yield curve.
In this situation, I think that staying in the shorter part of the yield curve is the best place to be. Of course, any normalization of the curve could imply a rethinking of our strategy in terms of duration. We set also cap in terms of maturity to stay below 4. You have some rounding effect, but we say that also in terms of maturity, we don't want to exceed 4 year. You know, our profile is very conservative, and we want to be perceived also from a commercial perspective as the most liquid bank in Italy. On the traditional life insurance, it's also a way to attract new clients. We will launch some specific initiatives where the cost of the product will be paid.
We are thinking of also launching some new traditional life insurance policies where we start from zero, so the underlying. Where we can leverage on higher rates. The combination of these two initiatives should more than compensate the outflows that we already see in data, in reduction.
Will the existing clients be allowed to subscribe the new one or eventually only for additional payments? And the switch from the old to the new, I guess it will be forbidden, right?
Exactly. Only for new cash.
Okay. Thank you very much.
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Okay, thank you. Hope to see you soon. Thank you all. Bye.
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