Good morning. This is the conference call operator. Welcome and thank you for joining the MPS Group second quarter and first half 2025 results presentation. 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. Luigi Lovaglio, Chief Executive Officer and General Manager. Please go ahead, sir.
Thank you very much. Good morning, everyone. Thank you for joining us today for the presentation of our second quarter and first half 2025 financial results. Today, we present spectacular results with a quarterly profit of EUR 479 million and nearly EUR 900 million in the first half of the year. These numbers show our tangible capability to deliver growth, high profitability, and strategic clarity. That clarity of purpose is really paying off for customers, employees, and increasingly for shareholders. Our advantage lies in our deep client relationship developed by a unique and very powerful distribution network that delivers high-quality revenues and rising fees contribution. Building on the strong results of the first half, we continue to lead with a strong Common Equity Tier 1 (CET1) ratio of 18.6%, a position that's further validated by recent stress tests.
Even under our best scenario, our bank ranks at the top of the sector in Italy and Europe. We build what they call a fortezza, a robust balance sheet capable of protecting Banca Monte dei Paschi di Siena and creating opportunity for decades to come. Our profitability is accelerating through strong commercial activity. With this solid foundation and on the back of excellent first half performance, we have raised the bar for full year 2025 and now expect pre-tax profit to well exceed EUR 1.5 billion. This is a clear sign that Banca Monte dei Paschi di Siena is delivering a real and growing value. With this awareness, we confirm our determination to create a new leading competitive force in the Italian banking system through our offer for Mediobanca, which is now live in the market.
Through this extraordinary combination with Mediobanca, we will generate a superior sustainable value over the long term, offering certain returns to both sets of shareholders. The know-how and distinctive skills of Mediobanca will perfectly complement those of Banca Monte dei Paschi di Siena. This commitment is supported by Banca Monte dei Paschi di Siena shareholders' endorsement and the confidence we have that the tangible, immediate, and sustainable value of our offer will be appreciated by Mediobanca shareholders. Now, let's dive into today's results that showcase our ability to deliver on our promises. First, some key highlights. Net profit for the second quarter hit EUR 479 million, up by more than 15% on the previous quarter, bringing the results over six months nearly to EUR 900 million, plus 21.4% on the previous year. The key driver was the strong operating performance visible in the net operating profit dynamic.
Gross operating profit reached EUR 576 million, up by 6.7% quarter on quarter, thanks to growing income and flat cost dynamics. After six months, total revenues reached over EUR 2 billion, allowing us to more than offset an increase in operating costs and keep the overall level of gross operating profit higher than the previous year. We saw strong commercial performance in key strategic areas. Wealth management gross inflow in the six months were close to EUR 9 billion, up 20% year on year. We granted mortgages worth EUR 3.5 billion in the first half, double last year's volumes, helping Italian families achieve home ownership while building a high-quality loan portfolio. The new consumer loans show a 20% increase compared to the same period last year. These are all tangible signs of a bank deeply connected to its clients and the real economy.
Further improvement in asset quality was achieved with the overall reduction of EUR 500 million in non-performing loans stock, of which over EUR 300 million was through the sale of a portfolio that was just finalized, with economics already included in our results. Our cost of risk dropped to 43 basis points from 53 last year, and it is tracking in line with our guidance. Our liquidity position remains sound, and our Common Equity Tier 1 (CET1) ratio at record level on 18.6% provides a significant buffer above requirements. Banca Monte dei Paschi di Siena stands among the strongest banks in Italy and Europe, a position that creates strategic flexibility and competitive advantage. Now, let's move to more details of our results.
As I have just mentioned, net profit of the first half of the year reached EUR 892 million, up by 21.4% year on year, excluding the positive net tax in both periods. Results are sustained by a strong commercial activity, which confirms the solidity of our business model and Monte Paschi strength. The results were supported by an excellent second quarter with a net profit of EUR 479 million, with an almost plus 16% growth versus the first quarter 2024, if we exclude net taxes. Now, moving on to the next slide, where we are presenting the net operating profit, which after six months amounted to EUR 956 million, showing a positive trend, growing plus 4.3% year on year, thanks to higher revenues with increased net fee income contribution, thanks to the strong commercial effectiveness of our franchise.
The net operating profit amounted to EUR 488 million in the second quarter, growing by 9.1% quarter on quarter, thanks to increased revenues, effective cost management, and lower cost of risk. Now, let's move to gross operating profit, which reached EUR 576 million in this quarter, increasing by 7.6% quarter on quarter. It was driven by almost 4% revenues growth in a quarter and effective management of operating costs. Cost income ratio has improved to 45% compared to 47% in the first quarter. For the first half of 2025, gross operating profit crossed more than EUR 1.1 billion, up compared to the previous years, thanks to the growing revenues driven by net income. This growth allows us to more than offset the increased costs impacted by labor contracts renewal and higher variable remuneration pool.
This again demonstrates our disciplined approach to both cost and revenue generation, ensuring steady performance even in a competitive context. For the first half of 2025, we maintain the cost income ratio that underlines our focus on operational discipline. These solid metrics support our strategy to deliver sustainable profitability over the medium to long term. As I mentioned, all the financial results have been achieved thanks to the commercial activity of our network, focused on key strategic areas and delivering results in a very sustainable manner. Just to comment on some KPIs, total commercial selling crossed EUR 171 billion and were higher by approximately EUR 4 billion since December 2024. Wealth management crossed the inflow amounted to almost EUR 9 billion in six months, up by 18% year on year. New retail mortgages granted in six months reached EUR 3.5 billion, 2.5 times compared to the first half of 2024.
New consumer finance flows amounted to almost EUR 690 million with a 20% year on year dynamic. These achievements are another confirmation of the solidity and validity of the Monte Paschi network. I would like to say thank you to our colleagues for the excellent results achieved. Now, let's have a look at the net interest income evolution. The net interest income on the second quarter amounted to EUR 551 million and was up by 1.5% quarter on quarter, thanks to lending volume expansion and further optimization of cost of funding, allowing it to compensate the negative impact on rate reduction on loans. In the first half of 2025, net interest income reached EUR 1.094 billion, with a yearly trend in line with the guidance given to the market at the beginning of the year. Now, looking at the volumes, let's start with loans.
We are reporting again a very strong net loans dynamic in the quarter, with the growing retail and small business component by EUR 1.5 billion, which gives plus 2.4% dynamic quarter on quarter, with almost 5% growth since the beginning of the year. Such a growth was possible thanks to the strong commercial activity in key strategic segments, and this is part of our strategic approach to mitigate the impact of decreasing rates on net interest income trend. We were also able to increase market share since the beginning of the year. Now, moving on to commercial savings, the total commercial savings in June exceeded the level of EUR 171 billion, a lot like more than EUR 4 billion in the second quarter, supporting the performance year on year and the performance year to date.
The growth is reported across all components, including also deposits, which is confirming the solid funding base and the effective approach in managing the trade-off between volumes and prices. Looking at our portfolio of Italian Govis, I can say that practically we are consistent with our approach. The portfolio is almost flat, showing that we are using this portfolio as a support to our liquidity. Now, let's move on to fees and commission income. Total fees after six months are quite impressive in terms of dynamic. If we look at the quarter, we reported in the second quarter an amount of EUR 405 million total fees, up by 1.7%, with a significant contribution that came from commercial banking fees. Wealth management fees in some way were affected by a significant component in the first quarter connected with the sale of some institutional bonds.
If we look at the performance after six months, we see the total fee reached a level of EUR 803 million and were higher by 9.1% year on year, thanks to the strong performance in wealth management and advisory fees, which increased by almost 14% year on year, with the positive dynamic also in commercial banking fees increasing by 4.4%, thanks to the excellence of the commercial network and the strong focus on key areas of our business. Now, let's move quickly on to costs, starting with the quarterly evolution. In the second quarter, operating costs amounted to EUR 471 million and were marginally lower quarter on quarter, with practically stable quarter on quarter HR and non-HR components. The overall level of cost is reflecting the continuous focus on non-HR cost management optimization, effects of which are even more visible when we turn to the yearly evolution.
Total operating costs in six months amounted to EUR 943 million and were higher by 2% year on year, with the growth driven by the HR component, which is up by 5.3% year on year, reflecting the impact of the renewal of the labor contract and the variable remuneration pool increase. The increase is partially offset by the effects of efficient cost governance approach in non-HR costs that allowed to reduce this component by 4.4% compared with the first half of 2024. Now, let's move on to gross and NP stock. The quality of our portfolio remains under control, and this is positively impacted by the sale we completed in the quarter of EUR 300 million of portfolio, enabling us to decrease the total stock by EUR 500 million in the quarter. Gross NP ratio performed at 3.7% and the net NP ratio performed at 2%.
Cost of risk was at 42 basis points in the second quarter, and in cumulative terms, after six months, amounts to 43 bps, 53 bps reported for the whole year 2024. As I mentioned at the beginning, we are completely in line with our guideline, and we are confident that we will keep this pace up to the end of the year. NP coverage performance stands at 46.7% after the EUR 300 million disposal, with a bad loan coverage performer reduced to 61.6% and with the coverage likely to pay and past due above the level of December 2024. Now, funding and liquidity, you can see from the slide that the solid liquidity position of the bank even in the quarter, we have an unencumbered counterbalance capacity at EUR 31 billion.
We are reducing ECB funding share at the level of 6%, and we have a significant improvement in the coverage ratio that reached 169% and a net stable funding ratio at the level of 132%. Both indicators are reflecting the solidity of our funding structure. We successfully also completed in the first half the issuance of EUR 1.70 billion bonds in line with our funding plan. Now, a couple of words on capital. Our consistent and strong capital position is reflected in the Common Equity Tier 1 ratio, that is reported at the level of 18.6%. It's important to mention that we kept this level of capital despite the increase of risk-based assets connected with the strong lending activity of the second quarter. The buffer is really impressive at the level of 840 basis points compared to the requirement. A few words on EU-wide stress test results.
We achieved the best ever results in 2023 EU-wide stress test with a fully loaded Common Equity Tier 1 (CET1) ratio of 16.83% in the adverse scenario in 2025, significantly above both the European average and the Italian average. I think this is a further confirmation of the capability of the group to generate capital in a very sustainable way with our quality of revenues that give us the strength to look forward with a lot of confidence about the potential we have by using the capital that we have at our disposal. Now, let's move on to the Mediobanca exchange offer. Our timeline remains on track. The consideration involves 2.533 newly issued ordinary shares for every Mediobanca share tendered. Our goal is to acquire at least 66.67% of Mediobanca's share capital. This transaction represents a unique growth and value creation opportunity with a compelling financial proposition.
We will generate approximately EUR 700 million per annum in pre-tax synergies. We will accelerate the activation of DTAs of around EUR 500 million per annum for six years. We expect double-digit accretion on adjusted earnings per share, and our organic capital generation enables 100% dividend payout with an accretive dividend per share of around 20% compared to the Mediobanca standalone proposition. The dividend yield is definitely in the range of 11-12%, among the highest in the European banking sector. The pro forma Common Equity Tier 1 (CET1) ratio remains strong at the level of approximately 16% throughout the plan, even with full payout, providing significant excess capital for strategic flexibility to capture other inorganic opportunities or enhance shareholder remuneration. Mediobanca shareholders, by tendering their shares, would also benefit from a significant upside potential on Monte Paschi stock re-rating. The industrial logic of combining Monte Paschi plus Mediobanca is crystal clear.
The deal will position us as Italy's leading player with a balance sheet ready to capture future opportunities. The combination will be a more resilient and diversified banking group with a fully fledged offering of products and capabilities for a full range of small business, corporate, families, and institutional clients, and with a strong capacity to invest in new technologies. The transaction will support the development of corporate investment bank and wealth management division, which are currently facing competitive pressure. It will open new horizons for consumer finance and provide a state-of-the-art digital platform through Banca with IBA to fully exploit Mediobanca Premier's potential. It will deliver benefits to the Italian real economy as well. In conclusion, our second quarter and first half 2025 financial results highlight our strong performance, commercial strength, and efficient business model.
With a quarterly profit of EUR 479 million and nearly EUR 900 million in the first half, we have demonstrated our ability to deliver sustainable growth and high profitability. At 18.6%, we reinforce our financial strength and our risk profile further significantly improved. For the full 2025 year, as I said, we raised the bar on pre-tax profit guidance of over EUR 1.5 billion, driven by our strategic initiatives and strong commercial performance. Now, let me address Mediobanca shareholders directly. I would like to take the opportunity to be clear and clear on the advantages our bid will make. Our model with Monte Paschi plus Mediobanca is broader and more diversified, which makes earnings more resilient. We offer a stable growing platform with clear prospects, and this from day one. From day one, we always reaffirmed our value proposition because we firmly believe it will generate superior growth and value on diversity.
On Mediobanca's side, instead of moving bank forward, what we observe is an increasingly erratic strategic approach, a position that shifts without clear rational conditions that change suddenly, and a defensive posture that prioritizes protection over value creation. This stands in stark contrast to our consistent, transparent, and value-focused approach throughout this entire process. Our offer is not about replacing Mediobanca's strength. We respect what its talented people have built over the past eight years. This is about unlocking their potential by combining them with Monte Paschi's scale, balance sheet strength, and retail reach to create something neither institution can achieve independently. We have a track record to deliver on our promises that I believe is the basis of the trust and why endorsement we gain from our shareholders, and thanks to them, we are moving forward. The real reward is the future.
Following this business combination, we will have multiple value creation levers at our disposal, accelerated on organic growth, strategic opportunities from additional growth from a position of strength, and we will have the flexibility for additional shareholder distribution as we optimize our combined platform. Looking ahead in the changing banking scenario, to tender Mediobanca share to Monte Paschi means becoming part of a future where we build a stronger, resilient, more competitive, and prosperous banking institution together. Thank you for your attention, and I look forward to your questions.
Thank you, sir. Excuse me. This is the course 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. The first question comes from Ignacio Ulargui of BNP Paribas Exchange.
Thanks very much for the presentation. I have three questions, if I may. The first one is on the operational performance, which was quite strong in the quarter. Just wanted to get a bit of a sense of the strategy on deposit. I have seen current accounts growing 3% quarter on quarter. That has been a very solid performance on that side. Whether that is kind of the driver to go in terms of improving funding costs and trying to reduce or to balance out a bit the declining in rates, and how should we think about NII? We have seen the bottom in this first half. Should we expect NII stabilizing here or growing from here?
The second question is on Mediobanca and Banca Generali, and I just wanted to get a bit of a sense of how do you see that deal and what could be the implications for you? Finally, one very quick comment on capital. Why you are not upgrading further the payout ratio of the bank, given the 18.6% CET1 ratio? Thank you.
Let's start from deposit, right? As I mentioned during the previous quarter, it's clear that we have a tactical and strategic approach on the side of deposit, having in mind that for us it's quite important to grow and to have a positive trend in retail deposit because that's strategic for our future growth, and particularly on the side of potential conversion on asset management products. Clearly, we want to leverage on that in order also to further improve our net interest income dynamic.
We pay a lot of attention to price, particularly on the side of corporate deposit, where the trade-off has been managed quite actively in the second half of the year. Going forward, we think that we can keep growing in market share, as we are doing from the beginning of the year, but again, particularly focused on retail. Despite this intention, we feel comfortable to confirm the guidance regarding the net interest income for the end of the year. We were mentioning a single-digit decrease, and this is something that we confirm. Hopefully, we can do also slightly better. It is clear that for the next quarter, we expect a further growth in average lending volume with a substantial stabilization in commercial spread in the fourth quarter.
Thanks to that, and based on what we are observing on the market, we believe that this trend will further find a stabilization in 2026 so that we are all in line with what we were mentioning at the beginning of the year and also in the first quarter. The situation is really progressing according to what were our expectations. Regarding the deal on Mediobanca and Banca Generali, honestly, I would like not to comment on that now, considering that today the Assicurazioni Generali board has probably just started, and the company is expected to issue a press release later. As Mediobanca mentioned, the outcome is crucial for eventual next steps on the transaction on Banca Generali.
About the payout ratio, it's clear that in the plan, in the combination with Mediobanca, we were already committing ourselves to get to increase both payout ratio that originally was 75-70%, then Mediobanca changed. Anyway, we said, as I mentioned, we committed to increase payout ratio to the level of 100%. It's clear that looking at the results we are reporting and the strong capital position, we are considering to anticipate this increase of payout ratio also for the current year.
Thank you.
The next question, sir, is from Luis Pratas of Autonomous Research.
Morning, everyone. Thank you for taking my questions. My first one is on the 2025 guidance, please. You essentially raised the pre-tax profit guidance to higher than $1.5 billion. However, if I look at the first half 2025 run rate, the pre-tax profit is already at $1.7 billion annualized. I wanted to understand a bit better the trajectory in the second half of this year. In which areas do you expect a decrease in the P&L? Maybe, if you could provide a more specific 2025 guidance across the main P&L lines, I'm thinking about fees, costs, cost of risk. It would be very helpful for us. My second question is on M&A as well. I just heard your comments that you prefer to wait for the general communication.
Given that this combination with Mediobanca is involved with so much hostility, and if we look at the Italian banking market right now with Banco BPM now free, I just wanted to be direct and ask you if you could consider refocusing on your M&A ambitions and maybe walk away from this Mediobanca deal and actually target Banco BPM. Thank you.
I think normally, as I was mentioning last time, the third quarter, we have August and fees and commission have some seasonality, as usually we are saying. We were mentioning that net interest income will have a single high digit. It is clear that, as I mentioned, stabilization in the fourth quarter, but still in the second half of the year, net interest income is expected slightly to decrease.
When we mention the overall landscape, it is clear that it is not proper to double the results of the first half historically, and normally, when you make this kind of forecast. Anyway, we were clearly stating well above $1.5 billion. I'm not sure I understood well your question regarding the intention for us to give up the transaction on Mediobanca. I'm not sure because there was a bad hearing, right? We are a serious institution and particularly focused in building up the third competitive force in the Italian landscape. As I was mentioning, we are quite determined. From the beginning of the year, all the organization, all the management team, all the board of directors is completely focused in getting this result. We are fully convinced, motivated, and committed to achieve it. Probably I didn't understand well your question. Anyway, this is the answer according to what I heard.
The next question, sir, is from Hugo Cruz of KBW.
I thank you for the time. Hope you can hear me. I have four questions. First question on NII. Can you remind us what are you doing in terms of hedging and what is the yield of the bond portfolio? Second question on fees, a very strong bid into Q. Although it looks to me like it might have been from repricing of commercial banking fees. I was just wondering if this fee growth was kind of a step up from the repricing and we shouldn't expect such growth going forward, or is there something else in the mix? Third question on, you mentioned that you could anticipate the 100% payout already this year from dividends. I was wondering, is that dependent on the outcome of the Mediobanca offer or will happen regardless? When can you actually confirm any increase in the payout?
Finally, on the Mediobanca offer, if you could remind me, what synergies do you expect if you end up controlling less than 50% of Mediobanca? Thank you.
Hello. Hi. Good morning to everybody. As regards the first question on hedging, actually what we're doing, we are, let's say, putting in place hedging strategies to manage both NII sensitivity in the short term and EV sensitivity in the longer term, managing the trade-off between the two. In particular, as you know, our hedging strategy is mainly based on natural hedges, and we are supporting this respect by the strong flows of mortgages, since the vast majority or almost all, like 99% of the new flows on retail mortgages, is at fixed rate, and this helps us to manage NII sensitivity in the short term.
Okay. I will answer about the fees and commission trend. It's clear that we were saying from the very beginning that the fees and commission are part of our focus and strategic driver also in the business plan we presented last year. We strongly believe that we have to keep this pace, and we have the possibility to do it because it is the result of some investment we put in place in terms of the way how we deal with customers, also in a remote way. That's why we are quite confident we can keep the pace, having in mind only that, as we mentioned, there is some seasonality connected with the fees and commission. Anyway, we expect to keep the pace achieved in the first half. As I said, with this one or two weeks where necessarily in August we are going to have this seasonal approach.
I believe that by maintaining the focus on lending activity, both in consumer lending and corporate, as well as concentrating on the growth on wealth management products, we are confident we can keep a very good level of fees and commission in the second part of the year. I think it's worth mentioning that the results are not connected with any repricing action. I think in the last two years, we didn't do any even massive change of tariffs. It's just because we have a very strong commercial activity. We have a team that is particularly focused in improving and further developing relations with our valuable customers. Fees and commission is our focus, and we will keep the pace going forward. Regarding the payout, we were just mentioning that it's something which we are clearly thinking.
It's normal to see how we'll evolve the second part of the year in terms of performance, but we are confident that we can anticipate the payout ratio up to 100% in 2025 already. Regarding the treasury, we were saying that our goal is to achieve at least 66.67%. We are going in this direction because we believe that the outcome of our offer will be very positive. Just as information, if even below 50%, we will get synergies despite it will take a bit longer period of time. As we were very conservative in fixing EUR 700 million of the amount of synergies, I believe that by entering and having a better view from the inside of Mediobanca, we can review also this amount of synergies and practically even getting the same amount in the first three years with a level that is even below 50%.
The only thing that is changing is the DTA activation because in order to get the acceleration, we need to be above 50% in order to have the consolidated balance sheet. Even below 50%, the synergies will accelerate compared to Monte Paschi's standalone situation. Only positive message on the side of the deal.
I forgot to answer to the question on the yield of the banking group securities. Our buying of this portfolio of the banking group of around EUR 9 billion has yielded an average yield of 3%.
The next question is from Andrea Lisi of Equita.
Hi. Thank you. Just a couple of questions from my side. The first one, if you can update, if you can provide us the amount of inflows that you reported in the quarter, and if you can update on the upfront fee component on the investment fee side. The second is if you can provide any update, if any, regarding the bancassurance agreement with AXA. There are news on this side. Thank you.
Okay. In the upfront fees, the upfront fees are practically at the same level of the previous quarter, more or less. We are discussing about a level of 40%. On AXA, we can just confirm what we were saying in the previous quarter. We have a very good partnership with them. We are keeping growing in the inflow of bancassurance product. It was quite positive in this quarter. The contract is going to expire in 2027, and then we will have a constructive approach in order to understand what we are going to do for that time. It's early now. Clearly, we have a lot of flexibility that is coming from the strong position of capital, our strong network and capability and historical skills in order to place this kind of product.
Moreover, if we are going to have also this deal up and running with Mediobanca, we can have also a further optionality that is coming from Generali provided that Generali will have the intention to set up a partnership also with us. I think I mentioned already the total inflow of wealth management product in the first half was EUR 9 billion almost. It's a very, I think, I don't like to say record, but it's an impressive achievement. As we want to keep growing, we are not using this expression because the potential of this network is really unlimited. We don't want to set even to us any bar in terms of results.
Thank you.
For any further questions, please press star and one on your touch-tone telephone. Mr. Lovaglio, there are no more questions at this time, sir. Back to you for any closing remarks. Excuse me, sir. There is a question from Manuela Meroni of Intesa Sanp aolo.
Yes, sorry, just to clarify, could you please repeat the amount of upfront fees in this quarter and compare with last year, please?
As I mentioned, the percentage is the same. It's 40%. If I remember well, last year was around, in the second quarter, was around EUR 50 million on EUR 130 million of total fee. This time, I think it's around EUR 70 million on the total of EUR 148, EUR 149 fees. The percentage is the same.
Thank you.
We have another question from Fabrizio Bernardi of Intermonte.
Hi, everybody. Just a couple of very small questions. The first one is that you close your balance sheet in December while Mediobanca in June. I would try to ask whether Mediobanca could change its, let's say, accounting strategy in order to check the one of Monte Paschi. The second part is that you said that the payout policy is going to be 100% in the very short future. I'm also saying that Mediobanca is paying an interim dividend. I would like to understand if you want to couple also with this kind of situation.
No, it's clear from an accounting point of view, we have 25 days now of the balance sheet. It's something on which we are better analyzing and preparing work for doing it. It's clear the payout is one of the aspects on which we are now considering. Clearly, we wouldn't like to be in a position less positive for the shareholders compared to what the shareholders of Mediobanca are today. I believe that also we can think looking forward to 2026 also to the approach adopted by Mediobanca of interim dividend policy as well.
Okay. Thank you. One more question about the cost of risk. We have seen in this quarter that the cost of risk is better than before or than ever for Banca Monte dei Paschi di Siena. I was wondering whether maybe I missed previous questions, but I was wondering whether you can drive us through the cost of risk in the next coming quarters. I think that the asset quality profile is extremely good at Monte Paschi, but maybe you can try to guide us, giving us some colors about the cost of risk.
I think I was mentioning that the profile of the bank is continuously improving. The profile of the bank is continuously improving. We sold, we deduced EUR 500 billion MP portfolio. We have intention to further decrease the stock. The signs are coming from the current stock portfolio performing quite positive, encouraging, and the new lending, especially on mortgages, is extremely positive. We want to keep the trend of continuing decreasing the cost of risk. As I mentioned, we believe that below a certain level is not prudent to go, and it's better to put some additional buffer in the balance sheet, having in mind that we want to keep a strong position looking forward in the coming years. The quality is really improving, and the current cost of risk and what we plan has a significant buffer for facing a more difficult period of time.
Okay, thank you very much.
Mr. Lovaglio, at this time, there are no questions registered, sir.
Thank you very much. Looking forward to seeing you the soonest we can. Thank you, and have a good period of holiday. Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.