funding very rapidly. So there is a growth in total funding, +4% year-on-year, and 1.1% quarter-on-quarter. In direct funding with we had a first half of the year with a substantial growth in current accounts. The substantial drop in current accounts due to the dynamics in net interest income. And in the third quarter instead, unlike what we expected, because we thought the situation would be flat, we were in fact capable of increasing the growth particularly in current accounts with some products. And at the same time, we would also like to focus on the shift that we've had on mid long-term deposits to improve the situation of our liabilities.
I would say that there's a good performance in asset standard management, so the net funding is positive by EUR 579 million in the nine-month period, and EUR 135 million in the third quarter. Whereas, as far as indirect funding is concerned, there's a substantial stability year to date since the beginning of the year. That is the effect of two different trends. One is the loss of stock from Amissima, because we terminated the contract with Amissima after the merger of Carige. And then, there's another factor, so there's EUR 1 billion growth in direct funding. Moving on to loans, I would say that the decline reflects some extraordinary situations like the EUR 500 million from the merger of Unipol Rental and SIFÀ.
Because of the risk of concentration, since UnipolRental is controlled by Unipol, we had to decrease the position there and refinance by EUR 500 million. So there has been an actual drop that is traceable to SMEs and corporates that, of course, as you know, the SMEs and corporates are like, in fact, trying to use their own liquidity to avoid incurring the cost of debt that has increased lately. Then the cost of credit is absolutely good for the bank, particularly in a situation, a macroeconomic situation like the one we are experiencing. We confirm the absolute quality of our loan book and credit, and in terms of coverage, we are best in class in the Italian banking system.
Of course, it has, I mean, the growth and net NPL ratio have slightly worsened, because as you can see in slide 9, we have this dotted line in red that shows that there has been a reduction in loans. So the denominator in the ratio is subject to this reduction. It's more of an accounting thing, and it reflects a drop in the, or a decline in the denominator. The stage two loans also show a very positive performance. As you can see, they have gone down by EUR 200 million. And as you will see later, the quality of credit is, in fact, good. So we could have expected some deterioration connected with the dynamics of interest rates, but instead, this deterioration was not to be seen.
We have not experienced it, and on the contrary, we had some improvements that we'll talk about later on. As far as the financial assets portfolio or securities portfolio is concerned, our idea is that of reducing it, downsizing it. The reduction has been EUR 500 million year to date, and it's a reduction due to the fact that the portfolio is more of a leverage portfolio. The leverage is expensive, and so in terms of profit and loss, the return is, you know, is such that we prefer to downsize it. The effects are that, of course, we're working on the Italian government bonds, and as you can see, since September last year, EUR 600 million is the reduction, which of course covers for the entire portfolio.
So there has been also a slight reduction in the duration, because we're looking at long-term Italian government bonds, and there's a yield on average for the quarter of around 2.77%. I would go directly to net interest income. Net interest income is going up again by 2.2%, and if we take away the TLTRO effect, then the actual commercial growth is 6.1%. Then, within the EUR 14.7 billion worth of growth, there's also a reversal of EUR 18 million, that is the help and aid that the bank offered to the territories in Emilia-Romagna that were exposed to and hit by the floods.
So if we take account of all of this, then the net interest income growth would be of about 8.3%-8.4%, which is a good trend in terms of, you know, for the third quarter. As you can see, the spread is further improving. We are now settling at 434 in terms of receivable, let's say, spread. But this is inclusive of the Ecobonus effect, which, in fact, if we strip the Ecobonus effect of the numbers, I mean, then the profitability is 3.42%. Then net commission income is, in fact, one of the pieces of information that we're more proud of.
In this quarter, we've been able to, in fact, keep our commissions flat in a period of time that is, very complicated. Let's consider that there has been also the effect of the summer seasonality, and so we are in line with the EUR 500 million, that we promised, on a quarterly basis at the beginning of the year. And of course, within this figure, you will not find the rappel, concerning the, premiums that, we will have for the placement, of products coming from the product factories. As at, September, these, rappel fees, were for an amount of EUR 500 million.
So we would confirm the guidance that we gave, and that honestly, frankly speaking, from a commercial standpoint, makes us confident that we will, I mean, about the evolution for the future. Within this EUR 485 million, there's also that reversal that we had to take on request of the supervisory authorities for the maneuvers that we had made on the current accounts because of negative interest rates, and it's about EUR 20 million worth of interest that we could recover and make up for with other income.
In terms of costs, the third quarter for BPER is always a positive quarter because the reflex, let's say, of the accounting of the holidays of the employees leads to a release of the funds and the benefit compared to the previous quarter, for about EUR 37.5 million. On top of that, in this quarter, we're starting to see the effect of the exits of personnel during the year. So as at September, the net exit of 330 employees also led to a further benefit compared to the previous quarter by about EUR 7 million. I would say that, on the nine-month period, it's worth considering that we had 1,500 exits, 556 entries, and so the reduction in the headcount is 934 people.
936 people, instead, will leave the company on the first of October, which we think is a further step forward to optimize the costs, the operating costs of people. I would say that cost income is very important for the quarter. That settled at 46% annualized on the nine-month period, settles at below 50 basis points, 50%. I think that BPER has never seen these amounts and numbers before, so they are important numbers. Then in terms of cost of credit, as you can see, it's true we have been conservative, but we were looking at a default rate at the beginning of the year that was of about 1%.
Quarter by quarter instead, what happened is that what we are observing led us to a 0.1%, which in fact made us decrease the cost of risk, which, that September, on an annualized basis, leads to 54 basis points, which means that in the quarter, we have settled at around at above 50 basis points, annualized 40 for the quarter. So we can confirm the overlays at the cumulative total of about EUR 323 million, which enables us to maintain a coverage that is among the best in class in the Italian banking system. We can observe a strong position in terms of liquidity, which is confirmed.
You can see that the LCR is at around 160%, and NSFR is at around 131%. We repaid EUR 3.7 billion worth of TLTROs in September. So despite this repayment, the liquidity position we have is extremely solid, and makes us confident for the next part of the year, then next quarter and the last part of the year. Let's move on to capital. You can see that there's an organic generation of capital that is shown in the slide that includes the accrual for dividend of EUR 0.25.
Of course, deductions are positive because on the back of the DTAs, for about 90 basis points to be deducted, and then goodwill and intangibles lead us to a net of 12 basis points. So 32 basis points that you can see in the RWAs are the effect of the reduction in the stock of our loans. I would give the floor back again to the CEO at this point.
Yes, as you heard, I think there's a good reason for being very much satisfied.
The data is very good, and just to conclude the presentation and also look into the future, and in particular, the closure of the year, we decided to align our expectations to the results that we have delivered so far, and thereby decided to update our guidance for 2023. The current environment, the interest rates dynamics, and the excellent performance of the business that we are currently witnessing every day, allow us to update our 2023 guidance for the most important metrics. So we expect that net interest income will land at over EUR 3.1 billion, which we had communicated EUR 2.8 billion. With net commission income being confirmed as per the latest guidance we gave at the end of June, of approximately EUR 2 billion.
Operating costs are likewise confirmed at approximately EUR 2.7 billion, and on top in the guidance, we're also adding something, because we have seen that there's a big opportunity to be seized, looking to the future. You know that the bank comes from a series of mergers, needs to settle down a little bit in terms of consolidation of all of these, mergers and acquisitions, and in terms of scale and sizing. And so the board of directors resolved upon a new early retirement plan for around 1,000 voluntary exits. So, by seizing this opportunity on top of the operating costs, there's EUR 400 million for this new retirement plan, and also considering the 2023 impact from the renewal of the national collective labor agreement.
Default rates are extremely low, as Gianluca was saying before, and low net inflows of exposures, or non-performing exposures, allow us to improve our forecast for the cost of risk, with our guidance now being in the area of 50 basis points. So considering all the improved forecasts for 2023, and factoring in all of the extra components that I have just described, we expect we will be able to deliver a net profit, a recurring net profit, higher than or equal to EUR 1.1 billion, maintaining a CET1 ratio of over 14%, thanks to the organic generation of capital. And as Gianluca was saying before, I would say to conclude, that the dividend per share will be higher than EUR 0.25, that have already been earmarked at the end of September.
We will define further based on the trends in this period and based also on what we are planning to do, as we said before. We're very happy and satisfied. We're convinced that the work we've done was excellent both for the present but also looking to the future. We're almost little bit forced to look to the future with some sort of a cross-eyed approach. With one eye we have to look at the tip of our foot and on the other, with the other, at the corner of the street. The third quarter results are excellent. As I was saying before, the profitability is going up continuously, and there's a further improvement in credit quality, just to summarize what we have said, and a sound capital and liquidity position.
So ahead of the business plan schedule, we are in fact, delivering both projects and economic financial targets. And based on that, BPER is ready to face the challenging macro scenario from an actual position of strength. I would, thank you for your attention, and we'll now take your questions. Thank you.
This is the conference call operator. We will now start, the question-and-answer session. Anyone who wishes to ask a question may press star and one on the 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. First, question is from Domenico Santoro from HSBC. Please go ahead, sir.
Thank you very much for your presentation. Good evening. I have a few questions on the targets.
First of all, on net interest income, you're giving a target for 2023 of above EUR 3.1 billion for 2024, I guess. And so this can mean a lot of things, but if I look at the fourth quarter, I would say that we are at EUR 100 million below the third Q. And so I would ask you, are you being conservative as usual, or should we consider some additional things for the quarter? And then for 2024, I remember that your guidance, you gave a best case guidance in line with 2023, and the worst case guidance was a little bit below. So can you give your color also on net interest income for the next year? Do you expect some...
Introducing some, some measures or actions if there's a, decrease in interest rates, since the curve has, shifted a little bit in the last week. And then, as for commissions, I would like to ask you if Arca's, performance fees have an impact? So could those performance fees from Arca be, recognized in the fourth quarter? And then out of the EUR 400 million that you are mentioning, for the, HR maneuver, can you give us a breakdown, how much, is due to the renewal of the contract and how much to the actual HR maneuver?
Considering that, there's another, basically, substantial downsizing in the headcount, can you give us some forward information about the renewal of the business plan too, and the trend in headcount for 2024 and 2024, and the phasing process for the reduction and the downsizing of the personnel based on voluntary exits? Then I have another question about the core tier one. Since the maneuver is going to be self-financed, basically. I would like to understand, how comes that there's a reduction in the CET1. So, 14.2 is, can mean a lot of things, so I'm considering the delta. Are you considering some extra one-offs, or are there any supervisory regulatory impacts on the third quarter, fourth quarter, that will have an impact?
Because the maneuver is self-financed. So are there any regulatory impacts? I understand also the guidance for the dividend, but above EUR 0.25 can mean a lot of things. And so, you know, your share is trading at multiples that are much more penalizing than compared to the banks. And so the results that you're showing quarter-on-quarter are exceptional. So I would like to understand, will there be some reflections on your part in February to understand, you know, if there could be a share buyback, are you considering that? Because your capital is strong, and so the payout, could it be higher?
Well, let's start with the answers. I would start with the last question. I'm sorry, with the second question you made.
I think you're not remembering correctly about 2024, because I think we never gave guidance for net interest income in 2024. We can, we can give it now, but I don't think we gave it before. As far as the forecast for 2023, you believe they are conservative. Instead, we thought they were fair and generous because we said we will be over EUR 3.3 billion, and so I think that's a good guidance. The increase would be by EUR 300 million, which is a lot. Then in terms of the fees of Arca, the performance fees of Arca, as Gianluca says, they were not included, and so you will find them at the end of the year.
As for the breakdown between the national collective labor agreements and the HR maneuver, and the breakdown between the two, I would start by saying something. We resolved upon the HR maneuver, but the HR maneuver, as you know very well, needs to be communicated, and we are communicating it to the trade unions. So of course, work teams will be opened up, negotiations will be opened up, it will be discussed. I cannot give you details now. I can give you some guidance. We can indicatively say that the maneuver may cost, indicatively, tentatively, EUR 300 million or a little bit more than that. And then the difference, the delta, is going to be about the national, the collective labor agreements.
And after I talked with ABI, the Italian Banking Association, yesterday, what I would say, but it's just my initiative, because I'm, I'm not deciding, I'm just one of the components deciding about that. I expect and wish that the national labor agreements will be happily concluded for everybody by the end of the year. But in order for us to know how much the impact will be, we will have to wait for the final stage of the negotiations. And so that's why I gave you some guidance, but when we have clearer data, we will be more precise.
Then in terms of self-funding, it's true that the maneuver is going to be financed by the funds of the bank, but we envisage that, and plan, that all of the transactions that we are working upon by the end of the year, we will have to look at the data that are uncertain now, but we gave a guidance for 14.2, over that, and you said it may mean a lot of things. What it means, in fact, is that it's going to be at least 14.2. It will not be, I cannot be precise about how much it will be, but until we have the numbers that are not fixed, we cannot say more.
But can I add a follow-up question, though, Mr. Montani?
Mr. Montani says, no, there are no negative surprises to be expected, no negative expectations we may have, that may have an impact on this, apart from some numbers that we cannot give you now. We are not in a position to give them now, because they are not yet defined. But the forecasts are, and the expectations we have are for the better, and there are no extra regulatory elements. And the same applies to the EUR 0.25 of the dividend per share that you were referring to, we said that EUR 0.25, as Gianl uca was saying before, and I would reassert that now, unless if we were not clear, they were earmarked as at the thirtieth of September. So, that means that they are starting, and from the thirtieth of September onwards, we're working to improve it.
But, the payout, means like, 33. It would be like, having a payout of 33%, so to say. I'm just, saying it tentatively, but of course, if it improves, then the payout, improves. The business plan that we delivered, that we produced last year, in that business plan, we said that the bank would have committed to, a payout of 50% by 2025. The trend we're witnessing in operations based on a supportive, macroeconomic system, has improved the expectations a lot, and so we are working towards, that payout two years ahead.
Though, I would remind you, but I, I'm not, of course, pleading for your support, but I would like to say that the bank two years ago was less than half than it is today in terms of volumes, in terms of credit quality. That has improved a lot based on a number of actions of de-risking that the bank has pursued. But of course, those actions were costly. So the bank had to commit itself to earmarking some quite substantial amounts. And this bears witness to the effort we made. Then in terms of, you know, of the evolution, what I can say is that we are going on to produce these results, to deliver these results, to improve the basis for the future.
The voluntary exit plan that we have defined goes in this direction. We could have prevented it, we could have excluded it, of course we could, but excluding it would have meant to be short-sighted, and only look at today's horizon, and missing the opportunities for the future. So instead, we want to focus on all of these aspects and improve. The bank needs to work and become lighter on some aspects. It will have to favor the exit of some people that are asking for leaving the bank. Of course, we have to focus on reskilling our human resources. That cannot be done across all of the levels of the population we have.
It's true that the average age of the population we have is 47 years, which is among the best in the system, but we want to further improve the situation. I think we have covered all of your questions. You were asking what benefits we will get in terms of this measure. So we will have to understand how costly the renewal of the labor agreement will be, and we do not know now. And also, in terms of defining the HR maneuver, we need to enter into negotiations with the trade union, so I cannot give color now. I expect a benefit and an upside once the transaction is, and the measure is concluded.
Now we're paying for the amount to be earmarked, but the benefit will be cashed, so to say, and collected later on. So I expect a benefit of about EUR 55 million-EUR 60 million a year, but I'm giving this as a, and it's to be taken with a pinch of salt, because we'll need to look at what happens in the future. What about the net interest income? Yeah, you were asking about net interest income. Well, we have not given guidance because it's a difficult exercise. It's not that difficult, we may even try to make it, but the first aim we have is that of closing the year well, so that we can consolidate the basis for us to be looking to the future with good optimism.
For the next year, we will have to look at what happens. I can tell you what I have on my table today. I would say that the Euribor may be flat, or even go down a little bit towards the second part of the year, or I would say the last quarter. So we expect that the net interest income will be flat, and if the volumes move better than we expect, then we may even go up. I cannot tell you by how much, but tentatively, I would say that this is what I expect. We have not given guidance for 2024 before. We did not give guidance before, but the indications I'm giving now goes in line with what you hinted at.
So it's clear that not only are we reviewing the guidelines for the business plan, because I remember your questions before this session, but we are also trying to, in fact, review the entire business plan, because we understand that the new metrics have modified the entire scenario, so we have to look to the future better. But I cannot tell you more because we are working on all of this. We'll have to submit this to the board of directors, which will decide. And so I expect I will submit this to the board of directors in early 2024. And when we have information to give you, you'll be the first ones to have it. Thank you for your patience. Thank you for your answers.
Next question is by Giovanni Razzoli from Deutsche Bank.
Good evening, everybody.
I have a question about slide 16. That is the one about the default rates for the nine-month period compared to the rest of the year, basically. And so I would like you to have, to make a, and give us a general comment about what you are witnessing in terms of the quality of assets. Because you said there was, and there is a little bit of a deterioration, but in the newspapers, we are seeing that there's a little bit of a deterioration in terms of default rates. So there's a little bit of a contradiction between the sector in general and what the banks are saying. Could you give us your comment about what you expect for the future?
And then my second question is about the potential joint venture for the platform of the UTPs that is part of the plan. Should we expect something for 2024? Is there any updates you can provide?
Yes. Well, I do not relate that much to what you're saying, meaning that it's quite plausible, and, in fact, even to be taken for granted a little bit, that there will be a little bit of a deterioration and impairment for the future because the interest rates trend is not having the same effects on the companies. There are some better structured companies that are using their own strategies and using their own liquidity to avoid borrowing money.
This does not benefit us in terms of loans and absorb liquidity. So there's another type of category of businesses instead that is very varied because they may support the interest rates less. And so it's we may expect some deterioration that may also have a an impact on the accounts of the bank. But we have worked in advance to cover for that. And so, for instance, I'm just recalling, but EUR 2.5 billion gross NPLs and EUR 1 billion net, so out of EUR 87 billion loans, which means that the basis is very strong and resilient, and the default rate has gone down to 0.8% from 1%.
The perception I have from the market, which is supported by our colleagues that are closer to the market than we are, do not give us these signs of deterioration. To be honest, also, by talking with my competitors, if they have said the truth, they do not have this perception. There are not actual, real signs to anticipate this deterioration. But it's a common sense for us to prepare ourselves in case this happens, and that's why we were prudent and conservative with the overlays and provisions. We've got a provisioning for bad loans of about 80%. 57% is being, I think it was, yeah, 57.3% is the coverage of risk in general.
So we have equipped ourselves, but for this, but we do not have any actual signs to anticipate this deterioration. Then, I do not know if Gianluca wants to add something, and in case, I will give him the floor, but, the platform and the joint venture you mentioned were part of the business plan, and we would have liked to close it even before, but because of some operational technical reasons, it will be postponed to the first or second quarter of next year. Gianluca may add some further details about it. Why was that so? Because there was a intensive technical preparation that we had to go through. And the UTPs, for instance, we do not have a lot of choices, you know.
We have to evaluate the UTPs well, and it's something new that we're pursuing, and that's why we're focusing on it with a lot of attention, because this is interest bearing customers which need attention. And then the platform also involves negotiations with the unions again. So for the negotiations with the unions, what I would say, I do not want to be misinterpreted, but I think that in our country, the unions are fundamental, and sometimes there's, you know, animated negotiations. But in the end, there's always an agreement found because it's a common interest to have an agreement in place that makes the employees happy and the market happier.
So there's negotiations underway, and the unions, well, involves all of the union systems, in terms of the renewal of the labor agreement, and then there's an internal negotiation for the voluntary exits plan. So you can understand that putting together all of these things at the same time would have been difficult, would have generated confusion, would have led to chaos, so to say. That's why we had to move part of the transactions. But the platform is part of our objectives. It's just been postponed. We want to pursue it, and we're working on that intensively. I do not know if Gianluca wants to add something...
So I need just a couple of things. One is about the credit impairment.
I can confirm we were conservative in terms of credit because we were expecting negative deterioration, negative evolution, that in fact did not materialize in the third quarter, and so inevitably we have decreased the cost of risk. Then the indicator we look at every day is consumer credit, because that's the first leading indicator for impairment, and we had no signs of deterioration. So I'm confirming what the CEO was saying before. Then, in terms of the platform, I would say that we think we will close the agreement by the transaction, by the end of the first quarter 2024. It needs to be working well, and for bad loans, there are no problems.
For UTPs, there needs to be a good organizational structure, a good system of processes and procedures that works well, and that's why we prefer to be reasoning upon it a little bit longer so that the engine works better.
Very clear. Thank you.
Next question is from Azzurra Guelfi, Citi.
Good evening. I have a very short, brief question. I think I have understood that outlook for the cost of risk is quite is considered as quite encouraging for 2024. Could you give us some details about the development of the loans that are guaranteed by the government and those that are not state guaranteed? Third question is about deposits. Deposits are growing at least in this quarter.
I would like to understand what your expectations are for the future and for this front, so the deposits.
I thought we would be speaking about 2023 instead. I can see you're more interested about 2024, which does not mean that we are not, on the contrary, but we're still very much focused on 2023. What do we expect for 2024, was your question? Well, there may be a slight deterioration. We cannot rule that out. We do not have any signs or indications for that, but it's possible that this will happen.
So let's say that, we expect, since we are very well, you know, protected, so to say, because of what we did, we can expect that the cost of credit will remain stable unless big, changes happen in the market, which is not the case now. But if the things remain, like they are now, this is what we expect. As for state-guaranteed loans are concerned, we do not have any priority or preference. We're working on many fronts. Of course, we're looking for loans that, will make us more protected and, but it's not, what we are developing only. So we're working on, ratings, that are on average, very low, but not, we do not have any preferences in one direction or the other. We are a retail bank.
We are a deeply rooted bank that needs to be supportive of all of the companies that well deserve that, regardless of the guarantee. If there's a guarantee, better, but, or it's good, but it's not that because they do not have a guarantee, we should, you know, have a preference. Deposits are going up, it's true, and Gianluca, in fact, talked about it, and we also talked about it in the past. He emphasized the dynamics of the first half and the recovery that we had in the second, and so we're confident. And how should we deal with it? It's more of a vague answer that I'm giving. There's not a synthetic, a brief answer that I can provide to such a vast and broad question, because liquidity involves a lot of components.
Next question is from Adele Palamà from UBS.
Good evening. Thank you for your presentation. I would like to go back to the NII, just to understand, if I have understand, the guidance correctly, also the quality guidance that you provided in terms for 2024. That, first of all, I would like to understand if for the next quarter, we should also look to further one-offs after the TLTRO, and/or the. So will there be any one-offs for the TLTRO? And then I would like to understand the deposit beta. If I calculate it, based on the variation of the Euribor in, from 2022, I mean, the deposit beta would be around 15%. What do you expect for the next quarters?
So will the number go up significantly, or do you expect a Deposit Beta of more or less the same level? So what is your calculation? And then I would like to understand again for 2024, once again on the net interest Income, are the dynamics going to be quite flat or will there be, I think you said there's going to be an upward trend if some more initiatives are pursued, and so are there any that you're considering in lending? A nd then any elements that you can talk about, so one-off elements for the NII. My last question is about hedging. So you've recognized, in the payout, you've recognized about 30%, and so can we expect that this payout may get to 50% this year already?
And then, I would like to understand if you had any discussions with the regulators on a possible share buyback, or if you are, you know, considering this as an option.
Excuse me, I would answer, I will start answering from the last one because probably I was not that much clear before. I did not talk about 30%. I said we have set aside EUR 0.25 as dividend per share, we did that, as at 30th September. And I said that if we had to consider EUR 0.25, we would be at around a payout of 31%-32%.
I also said that in the business plan, we had declared that the objective of the bank for the end of the business plan, so by 2025, the objective was that of a payout of 50%. But in the meantime, the bank has doubled its sizing and scale. It needed to increase its capital. So what could not be brought forward and we're going on. But it's clear that if this EUR 0.25 that we have set aside, I mean, if things improve, then there may be an increase in the payouts, but we cannot say more. Then, you were mentioning the discussions with the ECB. I would say that there are discussions, and I would not call them discussions. Discussion is not a good term.
We have talks and dialogue with the ECB on an every day basis. We have not talked about buyback. We think it's early. We need to consolidate what we have. And so I would say that on this subject, we have not made any significant considerations. Then in terms of the distribution of dividend, there was no problem with the ECB. I would say for the first two questions, the guidance for 2024 in terms of NII, I gave more of forecasts or expectations that we have for 2024 in terms of interest rates, and I can confirm that the Euribor is considered as being flat or possibly even declining a little bit in the last part of the year. So we consider it as being flat, which contradicts what you were saying before.
What happens if the interest rates go up? Well, I do not know. We do not see an interest rate hike. For what we are expecting, based on what we know, based on what we hear, we heard that the ECB had increased the interest rates, but they said that probably they would have gone down at a certain point, and so I cannot see any events going in the direction of an interest rate hike. But we should always be attentive, and if the evidence changes, then we will act accordingly. One-offs on the TLTROs. Well, the last tranche of EUR 1.7 billion will be repaid in March or April, and then once that's closed, that's over.
For the deposit beta, I know that Gianluca can add a lot of extra details, but it's much lower than... and there's a difference between corporate and retail, but Gianluca likes this, so please, you have the floor, Gianluca.
No, it's not that I like it, but it's true. We are lower than 10%. As you may have seen, there were some dystonic movements, so there was a big loss in direct deposits. We were expecting a reduction in the loss in the second quarter, but instead in the second part, and instead we could grow. So analyzing the beta becomes, you know, it's quite complicated. But I would go move on to the part of your question when you were asking about hedging. We were working on natural hedging.
So we have been working on natural hedging so far, so that we could benefit from the interest rate hikes quite well, and you could see that in the net interest income trend. But now we are seeing some sort of stability in the Euribor, and also there may be a slight decline in the last part of 2024. So we are starting to brace ourselves for, because we're, we're thinking of a replicating portfolio. We're talking about a replicating portfolio. You make money only if you work on the replicating portfolio in advance. So that's why we are starting to work on hedging, and in terms of sensitivity, I think you remember that some months ago we were around, at around EUR 300 million, 100 basis points parallel shift.
Now we are reducing that, so we are at about EUR 280 million with the risk models, but it's about EUR 250 million in our finance models. And so little by little, we're in fact preparing ourselves for a scenario that should the interest rate drop significantly, then we would financially also be avoiding a decline in the net interest income. And in fact, we're looking to be well-protected.
Can I make a follow-up question, please? It's about the lending initiatives. Are you considering any initiatives in lending to support the lending in the next quarters? And then I would also like to have an update on the sensitivity of NII to 100 basis points of reduction in interest rates.
Well, that has, I mean, the sensitivity has just been mentioned.
100 basis points leads based on the risk models are 280, and 250 based on the finance models. Theoretically, we will reduce that, we want to reduce that, so that we can cope with any possible scenario of interest rates reduction in a tactical way, as we were tactical in dealing with the interest rate hike lately. So in terms of lending, well, mortgage, residential mortgage loans are the key product for us as a bank. And if you look at all of the rankings, we're always ranking first in terms of the mortgage loans being not expensive and qualitatively appealing. And so we think we're working on some initiatives for 2024, that I would not talk about now, but you will see in the future.
But there are going to be quite substantial initiatives in this area.
Thank you very much.
Next question is from the conference. Mr. Cruz, your line is open.
Hi, thank you very much for the time. Just a few questions. So first on the NII for this year, for 2023, if I just take the EUR 3.1 billion at face value, that implies a decline Q-o-Q. Obviously, your target is not 3.1, it could be higher. But, you know, do you expect NII to come down in Q4 versus 3Q, even including any TLT one-offs or not? Second, you know, the trading income can be quite volatile. I wonder if you could give any guidance there, trading income. And then finally, the EUR 400 million for the HR maneuver, is that before or after tax? Should we assume any tax impact or not? And sorry, and the final question.
You know, you've talked about the HR maneuver potentially impacting the capital, potentially you know, the, the UTP JV. You said no regulatory headwinds, but could there be any other negative impacts on capital from other maneuvers that you're considering in Q4, or, or is really just the, the HR maneuver? Thank you.
Well, as far as net interest income for 2023, I was sorry to hear you mentioning something that I have a different opinion about. We do not think there's a decline. On the contrary, there has been a strong increase. We talked about an increase compared to what we said by about or even by more than EUR 300 million. So I cannot see a decrease. But then, in terms of the trend for the rest of the year, it's not different from what we're witnessing now. We will calculate it later, but my opinion is a little bit different than yours. Then I talked about only the HR maneuver that is subject to negotiations with the unions, and that will take some time.
Our idea is that we need sufficient elements. We have sufficient elements for taking it this year, recognizing it this year, but I cannot give you the details, because until we close it with the unions, I have no elements to say more. But in terms of impacts on capital, there are not going to be any extra impacts in 2024, because that HR maneuver is going to be taken this year. And then I think that also the same applies to the provisions for the renewal of the labor agreement, assuming that this is closed by the end of this year again. So there should be no concerns about the fact that this HR maneuver will lead to further impacts for 2024.
What this maneuver can bring about is a big opportunity for the bank. I may understand that someone may have liked us not to do it, but we feel compelled to look to the future for all of the stakeholders, investors, and so that we can favor growth and improve all of the components of this bank. So it will bring about benefits and upside that will become visible from mid-2025, or probably by the end of 2025, but the upside will materialize quite significantly in terms of both profit and loss, and also it will make it possible to have a lower average age of our population in terms of skills and in terms of age.
Then I cannot see any negative impacts on top of that, but I'm trying to understand if there are any- if there's any other aspects that I didn't touch upon about your question. I would say that in terms of capital, they were reminding us that there is something that I was forgetting. I wanted to say that all of this is being done in the assumption and hypothesis of a CET1 of over 14.2%, which is being strengthened. You were also asking about pre-tax or post-tax, and of course our numbers are pre-tax, before tax. I would also add one aspect. I can confirm there's no extraordinary impact. Of course, we expect we will exceed 14.2%, but clearly 14.2 is more of a floor.
So as the CEO was saying before, we have set the dividend at EUR 0.25, and by the end of the year, we will consider whether there's further room for improvement of the dividend. So that's why I'm speaking of that being more of a floor in terms of capital.
Okay, thank you.
Next question is from Noemi Peruch, Mediobanca.
Good evening. I have a couple of questions. First of all, I would like to elaborate on the strategy that you have for deposits in 2024, in particular, term deposits. Then I would like to ask you, how much do you expect you will have in terms of retail bonds for 2024, and also the last part of 2023? And then I would like to have some clarification about the HR exits. You mentioned 2025 before, for those EUR 400 million worth of one-off. You said that the exits will be by the end of 2025 or, or, or as of 2025? And that's my question. Then I have a last question about digital euro. So have you launched the preparation phase?
So what risks and opportunities can you see about this implementation?
Well, I have seen that there's a lot of interest about the HR maneuver. There are two effects that I will talk about. The profit and loss effect, first of all, because the impact will be on 2024. So the cost will be, I'm sorry, will be in 2023, whereas the benefits and upside will start in 2025 because the time horizon is longer. It stratifies with the previous maneuvers, and so the benefits will become visible in the profit and loss from 2025. And this will also overlap with the cost of the renewal of the National Labor Agreement, which will also have an impact.
But the cost for funding this maneuver that will have an impact in 2023, whereas the upside will become visible and materialize in 2024, from 2025. If everything works well, by that time, we will have from 2025 onwards, we will see a downsizing in the headcount and also an improvement in the age and skills of our personnel. We cannot forget that the digitalization also erodes some of the jobs, meaning, so that this also has a role to play, basically. Then I read about the digital euro in the Sole 24 Ore, and then I read also your survey, and I would start by saying that the digital euro is a very interesting factor and operation that is being worked upon.
It's a little bit early, but we have prepared and equipped ourselves. There's a work team that is working on this, that is assisted and backed by IT and the organization, and so we are focusing on these aspects very well because we know it will have an impact. It's an initiative that also the ECB is focusing upon with determination, and this initiative was pursued even by Mr. Panetta, that is now the governor of the Bank of Italy. So we are in line with this initiative, but it's a little bit premature and early to talk about the impact it will have. From an economic standpoint, if I had to say something, if I had to give you my opinion, I would say that the first scenario out of the three scenarios that you mentioned will materialize, so commissions.
And then, the limit of EUR 3,000 is not a source of concern, but of course, this digital euro will erode something from the banking system. If I can tell you something based on my experience, when problems came out in this direction, banks are always capable of compensating these things somehow. And so the bank is also considering other lines of business that will have to offset initiatives like the digital euro and some other initiatives, so that the bank can cope with these new fronts.
The team we have is a team of people that are very skilled, very prepared, and the bank will cope with these issues well, and will also want to make a good impression on the supervisory authorities, being well prepared for these new initiatives. Then about the bond issuances from the funding. Well, we do not have a deficit, so we are in a surplus, both in terms of regulatory and TLTRO, and in terms of sub requirements. So, these issuances are as per the funding plan, and we are repositioning, repositioning BPER also on medium, long-term solutions.
So we will use, and you do use these issuances to balance and offset the funding on the long term, so we have no deficit levels that we should be speaking about.
Next question is a follow-up from Adele Palamà from UBS.
Yes, I have a very brief and short question about the tax rate, because I saw that in the last quarter, the tax rate was 27%. So can you give us a guidance about the tax rate for the full year, for this year and next year?
I'm checking with my colleagues here. It's going to be 25%. We will be more precise and accurate, but I've got the head of planning here, and 25% in 2023.
Will this apply to 2024 as well?
Well, I'm telling you what I know now, but for 2024, I mean, it's too early for me to tell you. We need time.
Thank you.
Next question is from Marco Nicolai, from Jefferies.
Good evening. I've got two questions. One is about the number of employees you have going beyond this measure that you have announced today for EUR 300 million, the HR maneuver. Where do you expect the headcount will land at for 2024? You mentioned 536 people that exited on 1 October, if I'm not wrong. Is this a result of the... Yes, this is the result of prior HR maneuvers. But, in 2024, where will the number land at? Are there any extra exits envisaged or 136 of October, are, were, were they the last ones?
And then, capital upside of 12 basis points from DTAs, I think you mentioned. What support do you expect in terms of DTAs in the short term for 2023 and for 2024?
Well, headcount, 20,318 is the headcount today. The objective and target was that of landing at 19,600. And I think we will deliver that, and it's the result of the HR maneuvers. I would also like to underline something that, because we do not want to be misunderstood. It's not something easy, you know, to have people exit the company. So we, of course, have dedicated a lot of attention to motivation. We need to have motivated employees.
But there's also this type of facts that we should consider. There's a quite a substantial number of employees everywhere in all banks that aspire to being admitted to these funds. So it's not that we, you know, it, it needs to be favored. Then, of course, the unions will, they are very capable negotiators, and so they will want us to compensate the exits with entries. And this is important because we need to have young people looking to the future. And this is the objective.
So what is going to be... What is the target going to be?
19,309 by the end of 2024. I would say this is going to be the number, but it also depends on a set of initiatives that will have to intertwine with themselves among each other.
Then, as far as DTAs are concerned, all of the DTAs were reabsorbed. As the CEO was saying, we will review the numbers of the business plan, not the business plan, because of course, the business plan actions are being confirmed. It's more of the numbers that will have to be reviewed, because the assumptions have changed, both in terms of balance sheet and profit and loss. Once that's done, we will understand how many DTAs will be recognized, and so that's going to be an assessment that will be made within the next few months.
Thank you very much. And, what capital upside do you expect from the use of these DTAs on top of the new ones?
Well, it's going to be proportional to how much we will have, because once we quantify the extent of the DTAs, and there are going, there are going to be some, then we will evaluate and consider the impacts.
For any further questions, please press star and one on your telephone. Mr. Montani, there are no more questions registered at this time.
Thank you very much. Thank you for your patience with the delay we had at the beginning, 10 minutes delay. That was not due to our, you know, to. That was outside of our control. So be patient. We will try to be as timely as possible in the next future. Thank you very much. Have a good evening.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.