Good day, and thank you for standing by. Welcome to Banca Mediolanum First Half 2024 Results and Business Update Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To enter the queue for questions, please press star one and one at any time. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Alessandra Lanzone, Head of Investor Relations. Please go ahead, madam.
Hello, everyone, and welcome to the webcast presenting Banca Mediolanum's First Half Results. We appreciate your joining us today as we delve into our latest performance and highlights. Before we start, please remember to ask your questions according to the language you're calling from, the line you're calling from. In any case, the answers will be in Italian with an English translation. Now, I'll hand things over to our CEO, Massimo Doris, who will guide us through the presentation. Joining him is our CFO, Angelo Lietti. Massimo, take it away.
Thank you, Alessandra. Good afternoon, everybody. It's a real pleasure to be with you today, and I'm proud to take you through a recap of Banca Mediolanum's performance over the half year, examining the key highlights and strategic initiatives that have driven our progress and touch on how we plan to maintain this momentum. When thinking about what the pre-results meant to me, a famous Warren Buffett quote came to mind: "Risk comes from not knowing what you are doing." Today, I would like to unpack our First Half Results to show just how well we understand our future direction and create our own way to get there. We could have easily fully capitalized on a relatively slower-than-expected decrease in rates and joined an even fatter net interest income.
However, as you well know, our vision looks beyond short-term gains, and so we implemented the well-known promo offer on time deposits, which allowed us to selectively share the persistently high rates with both our existing and newly acquired customers, solidifying customer loyalty and expanding our customer base. In fact, this strategic move, which was uniquely ours, delivered unprecedented growth in new customers and assets. Additionally, we decided to implement a couple of key initiatives to benefit our mortgage customers and to protect our portfolio. But what matters most to us is that we keep beating records in recurring commission income, which remains the cornerstone of our core revenues. The second quarter, in particular, was exceptionally positive, propelled by favorable movements in the equity market that significantly drove up our average AUM.
Once again, our strategic equity gearing is yielding positive results, proving to be a consistently reliable payoff over time. Thriving market conditions also fueled our net inflows into managed assets, which were already solid in the first quarter but really took off in Q2. This has allowed us to reinforce our leadership position even more and look to the rest of the year with confidence. One of our analysts stated that commercial performance is undoubtedly the most compelling indicator of profitability, and we couldn't agree more. This observation underscores the critical importance of our commercial strategies and their direct impact on our financial success. That's why we put so much energy into attaining unparalleled excellence in our commercial results, ensuring that our efforts consistently drive outstanding performance. Well, let's now dive into the details of our performance in H1.
As you can see, slide number four, net income reached EUR 449.9 million, exceeding H1 last year by 24%, with Q2 coming in at EUR 229.4 million, 4% higher than Q1. Indeed, an outstanding financial performance that not only features a strong NI, but most notably an impressive net commission income, up 15% to EUR 587.4 million. The growth in our recurring fees, driven by higher average AUM, was certainly supported by buying markets, but also by strong inflows into managed assets. This was truly remarkable, given the challenging environment for inflows, especially at the beginning of the year. Our performance stood out in both quality and quantity, with significant contributions from both new and existing customers. As a matter of fact, management and investment management fees combined nearly hit EUR 743 million, pointing to a 15% increase compared to the first half of last year.
Our distinctive high-quality asset mix continued to bolster our high margins. On a pre-IFRS 17 like-for-like basis, the recurring fees on average assets were 215 basis points. Even though our net flows were mainly in fixed income funds over the past half year, the equity component of customers' managed assets has consistently remained at a notable 61%, as shown on slide number 15. Of course, we can't forget the major role played in our P&L by net interest income, which came in to EUR 480 million, increasing 20% versus H1 last year, however, down 10% over Q1. Keep in mind that NAI decreased in Q2 since the quarter naturally got the full impact of higher customer cost of funding from the six-month promo offer. Anyway, these funding costs peaked in Q2, and so we expect them to decrease in the upcoming quarters as promotional deposits expire and phase out.
We mentioned more than once that our NAI would expand in 2024, and this projection holds true as the year plays out. Now, in light of the latest market expectation and our very successful move in favor of mortgage customers, we slightly revised our NAI guidance for 2024 to around a 10% increase compared to 2023. This assumes an average three-month year-on-year for 2024 of 3.6%. Assuming 2.5% of the year-on-year for 2025, we expect a relatively flat NAI for 2025. Turning back to the P&L, I'd like to emphasize our most notable achievement, our record-breaking operating margin, which surged to EUR 566 million, with an increase of 22% for the half year. This reflects the diversification, profitability, and scalability of our business model.
Our net income also received a boost from market-related revenues in the first half, with performance fees generating over EUR 41 million, compared to virtually nothing in H1 last year. Lastly, I'd like to draw attention to our improved cost-income ratio, which stood at 39.2%, improved versus year-end 2023. This progress was driven by the income component that, thanks to higher recurring fees from increased average AUMs. As far as costs are concerned, the 9% increase we saw in G&A, slide number 8, is perfectly in line with our indication, despite the different timing of the marketing costs in the first two quarters. The contributions to the banking industry showed an unusual increase due to a change in scope. As you know by now, the single resolution fund reached its planned funding capacity and was not allocated in Q1.
Currently, Italian banks were required to advance the entire allocation for the Deposit Guarantee Scheme in the first quarter. Additionally, we have allocated on a pro-rata basis the new contribution requested by IVASS on the insurance reserves, estimated to be around EUR 17 million for the year, although this is not yet official. On the topic of costs, it is important to note that the increase in provisions for risk and charges is because last year this line item benefited from a significant increase in interest rates, which positively impacted the discount rate. Now, moving on to slide number five, I'd like to briefly comment on the business results for the first six months, which you are already familiar with. Total net inflows, which were already solid in the first quarter, had a major boost in Q2, ending up at EUR 5.66 billion for the half year, a notable increase of 21%.
More importantly, managed asset flows took an extremely positive course, surpassing EUR 3 billion, 43% higher than in H1 last year. We can tell you that July was nothing short of spectacular. These strong net inflows showcase the effectiveness of our signature Intelligent Investment Strategy and, at the same time, the opportune timing of our fixed income mutual funds, which have been the major part of our flows so far this year, finally providing our customers with the perfect opportunity to rebalance their portfolio effectively. As you know, for us, fixed income funds represent a high-value alternative to BTPs, and this is why our net flows are less impacted than our peers by the competition presented by GAVIs, which are gradually losing their appeal, also due to a natural saturation effect, but continue to be a competitive factor for the industry.
It's worth bringing up that the conversion of the EUR 1.9 billion from matured time deposits tied to the last year promo offer into managed assets is progressing smoothly and is on schedule. In fact, 60% of the new money brought in by customers responding to the offer has already been invested into managed assets. And it's particularly gratifying that only 3% of the customers we acquired throughout this offer turned out to be rate hoppers. To repeat what we said at the beginning, flows are the core of our business and vital to our success. Skipping to slide 33 for a moment to find ourselves at the top of our strategy ranking says a great deal in terms of gaining market share.
That said, we are confident that our strong inflows into managed assets won't slow down in H2, thanks as well to reinvestments of the newly expiring time deposits. Therefore, we believe there is plenty of room to outperform our previous guidance of some EUR 5 billion. So we are adjusting our 2024 guidance to somewhere between EUR 6.5 and EUR 7 billion. As a consequence, thanks to solid net inflows, steady deposits, and supportive markets, our total assets reached the record level of EUR 129.5 billion at the end of June, showing an impressive 10% growth since the beginning of the year. On the other hand, our credit book has remained stable versus year-end at EUR 16.95 billion, reflecting current loan granting volumes, and is picking back up again thanks to a significant reduction in early payoffs as a consequence of our initiatives in favor of our customers.
Loans granted were down 25% year-on-year due to a lower appetite tied to the still high interest rate environment. However, the net NPE ratio of 0.81% indicates the good health of our loan portfolio, along with the 12-month rolling cost of risk of 19 basis points, which is consistent with our expectations. Lastly, general insurance gross premiums were up slightly, coming in at EUR 92.7 million. Indeed, the growth in standalone premiums, especially in new business, which is in keeping with our long-term objectives, was able to offset the slowdown in loan protection policies. Finally, as you can see on slide number 6, our growth drivers are trending positively. Amidst an overall positive outlook, the highlight is the acquisition of bank customers, which set a new record with 109,300 new customers by the end of June, representing an 8% increase from an already exceptional half-year 2023 in terms of acquisition.
This superb growth was driven by our targeted marketing efforts focused on attracting primary customers. Regarding customers acquired digitally through Selfy, we added 16,100 new users, reflecting a 16% increase compared to last year. As a result, the total number of bank customers reached 1,865,500, marking a 4% increase since the end of the year. The network's expansion maintained its growth path, supported by the recruitment and training of professionals from various sectors, along with the gradual addition of new banking consultants to the franchise. The total headcount of family bankers at the group level reached a total of 6,314, up 2% since the start of the year. Included in this number are the 298 banking consultants from the project name NEXT, who were actively supporting our private bankers as of the end of June.
By the way, this number reached 334 at the end of July, with another 125 banking consultants in training currently advancing through their executive master program at our Mediolanum Corporate University. Just as a reminder, our objective for 2024 is to reach a total of 400 banking consultants. Finally, I'd like to draw attention to our automatic investment services, which are pivotal in driving our growth and explain the unfailing consistency of our net inflows into managed assets. At the end of June, the assets parked in the money market funds of the intelligent investment strategy service and in the deposit accounts of Double Chance were EUR 3.2 billion, almost 10% higher since the beginning of the year, especially thanks to the money market funds from IIS, which turned the course back around.
As you are well aware, these assets are set to be systematically transferred primarily into equity funds on a monthly basis over the next few years. This strategy guarantees a dependable baseline, ensuring consistent future inflows and supporting the growth of recurring fees over time, something we can rely on regardless of any other factors. Also keep in mind that at this point, our installment plans automatically invest EUR 1.61 billion into mutual funds on a yearly basis. You know, there is another quote from Warren Buffett that perfectly captures the long-term and automatic nature of our services. Someone's sitting in the shade today because someone planted the tree a long time ago. Now, I'd like to shift your attention to the balance sheet ratios in slide number seven.
Our bank's capital position is remarkably strong, providing a firm foundation for future growth and keeping us with a buffer against economic and regulatory uncertainties. This solidity makes us a trusted and safe institution for our customers and investors alike. Our CET1 ratio moved up even further to 23.7%, while our leverage ratio rose to 7.4%, leaving ample room for organic growth and granting the board flexibility to keep increasing our generous dividend distributions. Anyway, please note that the introduction of the Basel III final regulations next year is expected to impact our CET1 ratio by approximately 2 percentage points, according to our initial estimates. Let's shift gears now and check out our business performance in Spain. On slide 31, Spain registered a significant increase in commission income.
Therefore, the operating margin in H1 grew by 11%, while net income had a substantial gain of 16% compared to H1 last year, reaching EUR 36 million. Total assets progressed 12% since the start of the year, reaching EUR 11.8 billion, with nearly EUR 8.5 billion in managed assets, up 16%. Net inflows reached a total of EUR 655 million, with managed assets making up the lion's share, amounting to EUR 604 million. This is more than double the inflows from a year ago, benefiting greatly from the Double Chance service. The credit book picked up the pace over the course of the six months and reached EUR 1.4 billion, up 4% since the beginning of the year, primarily due to the steady volume of mortgages issued. The number of family bankers remained mostly stable, with a slight decrease of 1% to 1,620.
Remember, our focus has recently shifted toward enhancing the quality and productivity of the family bankers, with the objective of growing average asset per advisor. We are particularly concentrating on the individual development of those who have joined us in recent years. Finally, the number of customers in Spain has reached 242,775, representing a solid 5% increase since the beginning of the year. To conclude, I'd like to express how proud we are of our first-half results. They establish a strong basis for optimism regarding the future of our business. In fact, 2024 is shaping up to be in line with our expectations, and by that, we mean very strong indeed.
Just to provide a recap of the guidance for 2024, we expect net inflows into managed assets between EUR 6.5 billion and EUR 7 billion, net interest income to grow by about 10% compared to the previous year, and stable in 2025. Cost-to-income ratio in line with 2023 at approximately 40%. Cost of risk in line with 2023 at some 20 basis points. Dividend to increase compared to the previous year. It's clear that our strategic direction and efforts are yielding positive results, and it's incredibly gratifying to see that our hard work is being recognized by you, the analysts. Thank you for your time and attention today. Alessandra, I hand this back to you.
All right. So now we can open the Q&A session. Feel free to ask up to two questions each so that we can give anyone the chance to participate.
If you have more questions that we don't get to, we'll follow up at the end. We'll follow up later. Thank you.
Thank you. To ask a question, press Star 11 on your telephone keypad and wait for your name to be mentioned. If you want to withdraw the question, press again Star 11. Please wait until all the questions are queued up. Let's move on to the first question from Elena Perini in Intesa Sanpaolo.
Thank you. Hello everyone. Hello Massimo. I have a couple of questions. My first question concerns your guidance. You focused more on the cost-to-income ratio rather than on the growth of G&A, but I'd like to know whether the guidance you had provided on that front is still valid in terms of year-on-year growth or if any changes took place. Second question.
In the press this morning, some articles were talking about new taxes for banks and insurance companies. Could you please share your view on this issue, considering that last year as well, during the summer, they tried to push through some legislation for new taxes, but we know how that ended up?
I confirm that it is important to focus on the growth of G&A, of costs, but I believe it's a lot more important to focus on cost-to-income ratio. If we double costs, we can triple revenues. I would go immediately for double the costs, but it doesn't work that way. So you have to keep costs at bay. But considering that our business is expanding so rapidly, the number of clients is increasing, the number of family bankers is increasing, and also assets under management are increasing, obviously costs are on the way up too.
Variable costs are up because they are tied to volumes, but also more costs and expenses are necessary to manage a larger customer base. That is why we believe it is important to keep under control the cost-to-income ratio, which we expect it to remain at about 40%. Should income be reduced, we can step in and diminish discretionary costs so as to reduce expenses and retain an acceptable cost-to-income ratio. As far as the windfall tax is concerned, yeah, you know, I read the same articles in the press. We've been talking a lot about this tax on excess returns, but then nothing happened. My interest is really working for Banca Mediolanum and making the bank grow. Thank you very much.
Next question. Giovanni Razzoli, Deutsche Bank.
Good afternoon. I have two questions. Which is the deposit stock you were able to collect with the promo, the 5% promo?
Then during your presentation, you said that a certain percentage has been turned into assets under management. Can you remind us what was the result of the promo campaigns you had launched in previous years? And what was the impact on net interest income for the second quarter coming from these promos? Second question, the fund performance. Is it possible to have an idea of how many funds more or less have exceeded the high watermark and the hurdle rate? And what is the performance we can expect by year-end? Can you give us a guidance thereof?
I'll start with the second question. We have some 50 funds that are above the high watermark and the hurdle rate. And we have EUR 140 million worth of potential performance fees in excess of the EUR 40 million we have already booked. Should we close the year today?
So the 140 is something that may remain stable, grow, completely be wiped out, depending on how markets are going to perform. Right now, it's 140 more in addition to those we have already booked. So we'll see. As to what we gathered with the 5% deposit promo, that was EUR 2.2 billion in the first part of the year. Last year, over the same period, we had collected EUR 1.9 billion. This was the 4% promo, of which 60% has been turned into assets under management. The impact on the net interest income, it's EUR 20 million quarter-on-quarter. So the cost of funding goes up by EUR 20 million in 2024, quarter-on-quarter, first quarter compared to the second quarter. I don't know whether you were asking how much the cost of funding increased in quarter-on-quarter, first quarter, second quarter.
If this was a question, then cost of funding increased by EUR 20 million. Thank you.
Next question. From Alberto Villa, Intermonte SIM. Please go ahead.
Thank you. Good afternoon. I'd like to go back to the topic of inflows because it is really one of the most important elements characterizing your equity story, your ability of being so good at this. So the acceleration you expect in the second half of the year, I believe it's tied to the promo campaigns for deposits, but also tied to the propensity customers have to switch assets under administration into assets under management. Do you have any visibility on any deadlines? Because maybe you have temporary investments in securities that may be converted into managed assets. Spain did very well in the first quarter in terms of conversion into managed assets.
So I was wondering whether this exceptional commercial performance could be maintained in the next quarters as well.
I really have to say that net inflows into managed assets in January and February kicked off rather slowly, but I was sure things would change as months went by, and the numbers are proving me right. There are a number of deadlines coming up between June, sorry, July, August, and September. That's to say government bonds in our customers' portfolios that will reach maturity. And also there are certain unit links and certain other securities in the treasury portfolio that will expire. And this is going to help managed assets. Plus, I have to say that the first few 5% interest deposits that were opened back in January are now reaching the expiration date.
So those were made in January, and then those opened in February will expire next month, and so on and so forth. In the second half of the year, EUR 1.1 billion government bonds will reach maturity. And in the second half, EUR 2.2 billion worth of deposits collected or gathered in this part of the year will reach maturity, EUR 3.3 billion in terms of assets under administration. And I'm sure that our family bankers will start putting that money at work immediately. As far as Spain is concerned, I really think that they will expedite inflows because in July, in terms of net inflows into managed assets, July was an extremely good month for Spain. So barring incredible or unexpected events in the market, I believe they will keep growing at this pace.
Thank you.
Thank you, Alberto. Next question, please.
Next question. Luigi De Bellis, Equita SIM.
Good afternoon.
I have a question on recruitment, competition, and new customers. Can you give us an update on these aspects? Considering that in your sectors, there are a number of moving parts connected to new projects, is this bringing about any discontinuity on the market? So how is recruitment going and whether by the end of the year you might think competition might be fiercer and whether you may have the same customer acquisition rate you had in the past?
Let's start with customers. The acquisition rate in terms of customers depends on the type of offerings you can propose. Since we've proposed the 5% interest promo in the first quarter, this, of course, supported customer acquisition quite a lot. Repeating the same, in order to have a repeat in the second half of the years with respect to these results, we have to think about new offerings.
Of course, this is something we are doing. Maybe we will not be able to repeat exactly what we obtained in the first half, but I believe that we will still keep a good acquisition pace. As to recruitment, since we recruit from traditional banks, insurance companies, and also people coming from other sectors, whereas we really have very few recruits from other networks, we don't feel the brunt of a great competition here. I don't expect to see a major change. Every couple of years, there is a network that maybe really tries and recruits more people from other networks. One year it's Fideuram, another it's Banca Generali, and then we have Fineco stepping in. Another year it's Azimut. So they sort of pass the baton to one another in trying to recruit people from other networks.
So we might have these up and downs, but there is not something upsetting or really disrupting the recruitment market as far as we are concerned, as things stand now. But again, let me highlight the fact that we don't recruit people from other networks specifically. Very, very few of them come from other networks. 95% of people we recruit do not come from other networks.
Thank you.
Thank you, Luigi. Next question, which comes from Marco Nicolai, Jefferies. Please go ahead.
Good afternoon. A question about your inflows guidance. You provided a rather high number, absolutely in positive territory. Maybe this guidance is due to the fact, partly due to the fact that some of these promo campaigns concerning deposits will expire this year. Or is it maybe a number we can expect in future years as well, this 6.7 or 7? Is it something idiosyncratic to this year?
Or given the greater customer acquisition, given the growth displayed by the bank, is it something we can expect in the years to come? Then, of course, it all depends on the macroeconomic picture of the future. But in general, I'd like to hear your views on this. And then a few questions about NII. First questions, could you tell me which portion of the fixed-rate banking book have expirations or maturity dates in 2024-2026? And the rates you have in those years to understand the positive impact there will be on NII this year and the next two years. Then in terms of cost of funding, you mentioned 120 basis points. What do you expect at year-end?
In terms of net inflows into managed assets, we have improved our guidance because at the six-month point, we have already reached the EUR 3 billion point.
Our target was EUR 5 billion. We are already at EUR 3 billion at the end of the first half, so we still have six more months to go. July is a good month. December is normally a very strong month. So sticking to the EUR 5 billion target for year-end seemed to be too low. July was an exceptional month. So this guidance reviewed upward to EUR 6.5 billion or EUR 7 billion makes a lot of sense. Plus, we have already made EUR 6.5 billion in the past because in 2021, as you can see on the slide, back in 2021, we reported EUR 6.66 billion in terms of net inflows into managed assets. So my answer is absolutely yes. EUR 6.5 billion-EUR 7 billion are within reach. Of course, markets will have to help us because you know that managed assets, inflows into managed assets are highly influenced by the market performance.
In 2023, we reported EUR 4 billion inflows into managed assets. Why? The market was struggling. Very many banks reported negative numbers. That's to say outflows from managed assets. So we always have to come to terms with the market. We always have to take the market performance into account. But I believe that EUR 6.5 billion-EUR 7 billion net inflows into managed assets are really doable. Then also, it's a matter also of when government bonds in our customers' portfolio reach maturity. For instance, BTPs that were quite widespread this year and were absent last year. Then we have time deposits. And these are situations or say these are offerings that we come up with on a yearly basis. And in that case, the expiration would have a positive impact. Plus, the market is performing well.
We are doing better than the others, but I have to say that the entire market, the entire banking system is recovering. As far as NII is concerned, rather the cost of funding, we expect +10% NII. We expect in the third and fourth quarter, a cost of funding lower than the one reported in the second. The other questions about gov is I'd ask you please to get in touch with our colleagues offline later at the end of the conference because it requires a detailed answer as it was a detailed question. Thank you, Marco. Next question.
There are no more questions on the Italian line. Let me hand it over to the English channel for questions into English. Thank you. We'll now start the question and answer session on the English call.
As a reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 on your telephone and wait for your name to be announced. Thank you. We're now going to proceed with our first question. The questions come from the line of Hugh Betlam from Bank of America. Please ask your question.
Hi, good afternoon. Thanks for taking my questions. I've got 2 of them. Firstly, on your CET1 ratio, you're saying that with the impact of Basel III, it's going to have a 2 percentage point impact on it. So it will come down from 23.7%-21.7%, which is still a very high number.
Does that change the way you think about the dividend, or should we still expect a similar thoughts around the dividend even though the CET1 ratio goes down, but it's still a very strong number? Just any comment on that? And secondly, on your NII target or guidance for 10% up this year and flat next year, how many new deposit promotions do you bake in or factor in for your NII guidance over the next two years? Thank you.
As to your question on dividends, the fact that the CET1 ratio went down a couple of percentage points does not change in any way our dividend policy, i.e., paying euro cents per share in every year as an increase trend.
So it would be CET1 at 21.5% or 21.7% is more than enough to keep on paying and to absorb possible lower net income compared to the previous year due to market effects. As we've experienced many times in the past, one year we have a lot of performance fees, so it's possible to distribute a higher dividend or we can increase it a little bit more. The next year may be a little less, but with such high capital ratios, it is possible for us to increase the payout ratio, the dividend over net income ratio, and maintaining the target to pay dividend per share ratio that year after year grows higher. As to the NII, the various promotions we launched with having a six-month time deposit offering, there were two of them launched last year.
Well, the idea is of launching a couple of these promotions this year as well. One has already been kicked off, and the second should come by the end of the year. And the same will go also for next year. The thing that may change is the rate being offered in these promotions. Every time we will see and understand what is the right rate to be offered in order to be competitive on the market, but not really paying too much or too little. As to the impact on NII, I mentioned this during my presentation. We also have to consider the initiatives for mortgage customers. You know that our mortgages are primarily floating-rate mortgages. So we really benefited from the interest rate hike. Our interest income increased a lot. Also, thanks to the fact that our mortgage book was not predominantly fixed rate.
Otherwise, the interest rate hike would have had no benefit on net interest income. So quite the reverse. Most of the book was floating-rate mortgages. However, the customers, the borrowers, may skip payments. For example, they may decide that maybe they are in distress, they cannot pay for one or two months. So they may choose to go for this option. There is no cost for the borrower. Of course, the term of the mortgage, the length of the mortgage will be extended, but the customer will be able to skip payments. This will allow us to retain customers, or customers will not have to renegotiate or to remortgage their loans. This goes to the benefit of the customer, but also of the bank because it allows the bank to avoid discussions with the customer or to have to renegotiate a lot.
Of course, skipping payments has given thresholds and limits. But again, borrowers may decide to go for this option. And it's a very straightforward thing. You don't have to renegotiate or to change the rate. You don't have to go through this lengthy process. And this makes it really straightforward. And over this last year, borrowers have been making use of this option because of the rate hikes. But now that we have the first reversal of the Euribor three months because our mortgages are tied to the three-month Euribor, many borrowers are starting paying again. They are current again on their payments. So for a short time, they decided to use this option, but now they started repaying their mortgage. Thank you, Hugh. Are there any other questions?
We have no further questions on the English call. I'm now going to pass back to the Italian call. Thank you.
Thank you. Let me remind you that when you want to ask a question, you have to press star 11 on your telephone keypad. Wait for your name to be announced before asking the questions. If you want to withdraw the question, press star 11 again. Next question. Comes from Gianluca Ferrari, Mediobanca.
Good afternoon, everyone. Just three final questions. What was the volume of certificates in the second quarter, and what do you expect in the second half of the year for this product? Secondly, Germany. We expected a few hundred million EUR of net income in the second quarter. We have just seen a limited number. So quite unexpected. Could you provide some explanation about this unexpected result? And finally, the CSM for the closure of the quarter.
So CSM used to be EUR 2 billion, and it's EUR 2.5 billion.
2.1 billion on January 1st, 2024, went up by EUR 400 million over the six-month period. Do you think it's a sustainable growth? It's very, very high. Well, it's essentially due to new business, a sizable portion, which surpassed the release of CSM of the past. This is an interesting piece of information. If you are used to studying the market, seeing a new business at a 1.3 value, which is higher than the released figure, I think that it's lower than the release. Exactly. So you are confirming what I was saying. So the delta between new business and release is about EUR 40 million out of the EUR 400 I mentioned. Other significant changes are due to the curve effect, about EUR 140 million, EUR 120 million due to the increase in assets under management in funds or in insurance, which led to an increase in the CSM level.
And then we have a final change that is due to a technical factor. As you know, we settled with the Irish concerning the 2014 to 2017 years. So we settled in terms of the rebate between Ireland and Italy, taking it from 57- 59, which generates a positive CSM going from EUR 2.191 billion- EUR 2.591 billion over the six-month period. And as far as certificates during the quarter is EUR 192 million. Germany, well, it's just an accounting phenomenon. When we closed Germany, we had provisions, and we released those provisions. We freed them up. So a portion of that provision is there. And so there is an impact on the P&L.
Thank you so much.
Thank you, Gianluca. Next question.
There are no questions on the attending line. Let me hand it over to Mrs. Alessandra Lanzone.
If I may, let me conclude by saying that I am extremely satisfied with the performance we achieved in the first half. I believe that we are going to keep on being extremely satisfied with our business performance also in the second half of the year. Thank you, Massimo. Thank you for participating in this call. I wish you all a relaxing summer, and we'll meet again in November for the nine-month results. Thank you. Ladies and gentlemen, the conference is over. We thank you very much for participating. You can now disconnect. Thank you. Bye-bye.