Good morning, this is your conference operator. Welcome to Credem conference call, presenting H1 2024 results. Let me remind you that all attendees are in listen-only mode. After the presentation, a Q&A session will be held. To be assisted by an operator during the conference call, press star and zero on your phone. I mean, I'll turn the conference over to Angelo Campani, General Manager of Credem. Dr. Campani, you have the floor.
Well, good morning to all of you, and thank you so much for joining our conference call, even though we're very close to the summer holidays. Our CFO, Giuliano Casinadri, is with us, our Head of Planning, Alessandro Cucchi, and our Head of Investor Relations. Let me start by saying that what we're going through now is a scenario that is characterized by uncertainties and rapid changes, and we're almost getting used to it.
And despite that, we have managed to keep on enhancing our positioning. As we will see during the presentation, the high level of diversification our business model is showing not only generates excellent performance against this backdrop, but is also proving it's very fast to adapt in order to support organic growth. And that is made possible by the medium to long-term approach we have to generate value in a sustainable way that historically has been characterizing our group from the quality of our assets and our sound capital ratios, not just in Italy, but also in Europe.
And we have a constant commitment on the investment side, and we address our investment in a sustainable way so that we provide omnichannel services, and we provide better offers and look after the relationships with our clients, and also the excellence of our people, first and foremost, who are ready to take opportunities vis-à-vis external changes, and who are characterized in a very strong level of involvement. And year in, year out, that enables us to achieve an excellent level of performance. And I would like to really warmly thank them also because, and I say that with my heart, that it's really an enthusiastic challenge we're taking up with our people looking up ahead of us. Let's look at the first six-month results, H1 2024 results.
We achieved meaningful results, and if we read them overall, they reconfirm our way of engaging in the banking arena and the sustainability of our business model long-term. Our profitability level is at the top of the banking industry with an annualized ROT and ROE, respectively, of 20% and 17%, and with a record net profit of EUR 324 million, our best result ever. Asset quality is very good. NPL ratio below 0.9%, 0.8%, better than the Italian average.
The ratio between total NPLs and total receivables is confirming that we are heading to be a zero NPL bank. We are organically generating capital, more than EUR 430 million in the first six halves. So our capital standards are stronger, and our CET1 ratio stands at 15.72%, and that implies a buffer of 812 basis points versus the regulatory requirements as to the size growth.
Let's move on to page three. Allow me to say that these results are particularly to be stressed and emphasized because they really stress how capable we are in executing our projects, and we can grow year on year, year after year, organically. Our business volumes are also growing, and loans are growing on a yearly basis. This is a reverse trend versus the overall banking industry. Also on direct funding, we have overperformed. We have outperformed our peer average. We are very happy to show you a production figure. It's EUR 2.7 billion between direct funding, asset under management, and insurance inflows. Then we have also expanded our customer base, now in excess of 1.5 million, with a 6% growth over the last 12 months.
This further reconfirms that not only do we attract new customers, but we also provide a service model, human and digital, a model that's really effective and that can really support the rolling out of projects to meet our clients' needs. Just to mention a piece of information that I think is very important for every private client we have, on average, we have more than four products placed. In other words, this is our cross-selling ratio. This page shows you the quality of our results, but also it shows the potential we can tap from our business model can use to really support our growth. Let's now move to business diversification. We're on page four of the presentation. During this quarter, we are showing an excellent level of diversification of revenue sources.
And let's drill down to a greater level of detail, comparing it with the last experienced growth versus last quarter, not just through an increase of our NII, but also through a stronger contribution of our NIM if compared with Q2 2023. Excellent growth of recurring items, which we called core. And they almost land at EUR 472 million. If we expect rates to decline, this should further help the profitability of our group coming from, for instance, commission fees and commissions. Sorry. And this is a distinctive feature of our bank and of our business model that will sure give us a competitive edge against a rate decrease backdrop. Let's now move on to the different pipelines in our federation of businesses. Page five, our federation of businesses has now been, for a long time, a pillar in our strategy.
And you see, having different pipelines within the bank is also something our peers are trying to introduce. As you see, it's a strong decisive competitive edge, both to provide thorough services to our clients as we have the necessary competencies and skills within the group, and also to diversify revenue sources and to be resilient through the cycle. On a yearly basis, we provide you with a table showing a comparison of our average ROE compared to the average European banks to show you our ability to overperform against any backdrop. We go down to a greater level of detail for every business. Now, commercial banking, NII is doing really well. Commissions are also doing well. There's no signs of asset quality deterioration. That really leads to profitability of EUR 191 million, accounting for 59% of our consolidated profit.
Extended banking service shows similar features and gives a 12% contribution to our consolidated profit with a net profit of EUR 40 million. And I'm also pleased to enhance the results achieved by our so-called wealth private universe, including wealth management product factories and Euromobiliare, Credem Euromobiliare Private Banking. And as I said in the previous calls, we expect a major contribution coming from this business area. In the first half of 2024, the net result stands at EUR 102 million, accounting for about 32% of the group net profit. And we are confident that the results in the coming quarters will still be very positive because these are all businesses that will be more and more a focus to be focused on against the backdrop that expect rates to be lowered. Always thinking of H1, let's move on from the financial to our stakeholders.
So we move to page six, and we talk about sustainability. We are still focusing on sustainability themes. And of course, we want to guide our growth towards the ESG initiatives. Let me mention a few, by the way. First of all, we are confident that it's of paramount importance to spread the culture of sustainability within our group and involving all of our employees, all the people who are working for our group. That's why we came up with a so-called position called ESG Link. We have figures called ESG Link who are in charge of identifying synergies and providing information flows on sustainability. Always, as it comes to corporate culture, we have come up with a dedicated portal, a dedicated sustainability and ESG, with a number of video pills and training modules.
On the product side, let me mention that we are extending our ESG-related range, for instance, green loans to mortgage loans to buy green buildings, and then sustainability-linked loans, really supporting companies to set sustainability goals. Moreover, during this first half, we got the first IFRS 9 estimates of the impacts resulting from the application of climate and environmental risk factors in our accounting models. We joined the Net Zero Banking Alliance, and we are setting our decarbonization targets when it comes to power generation, oil, and gas, and they will be disclosed by year-end. As we are concerned more directly, we've completed the installation of about 2,000 photovoltaic modules at the Magazzini Generali delle Tagliate, the company of the group that is fully, for instance, specialized in cheese maturing and Parmigiano Reggiano cheese maturing and stocking. It will avoid the emission of approximately 110 tons of CO2.
We are also committed to the people in our group, as is testified by the certifications we acquired. You can see at the bottom of the slide, let me remind you that we're the only bank in Italy to have two certifications for gender equality and for pay parity. These two very important awards show and bear witness to our commitment to make our environment more and more inclusive. Let's move on to another very important stakeholder, customers. We move on to page seven in our presentation. We give you a brief overview on how we relate to our customers. We think it is essentially important to have a human relationship, but at the same time, we are aware of the benefits we can draw from digital technologies to support our service model.
On this table, you find a set of data comments that really confirm our commitment to support a so-called human-digital service model, where we leverage on the opportunities of digital technologies to further improve our relationship with customers and their engagement and our engagement with them. You see a number of initiatives, either commercial sales campaign events that we have organized or offering specific product offerings. And then we get, of course, hints that are generated by our artificial intelligence models that are sent to our managers who, in turn, talk to our clients and support them in their specific needs. The engagement can be fully digital, depending on the product, to really then trigger specific actions. We are confident that the combination between the human and digital factor strongly improves client welfare, and it will support, now and going forward, the growth of our group in size.
I mean, if you look at the right-hand side, we are looking at the digitalization of sales, both in acquisition and sales. So digital acquisition of new customers and digital sales of products to our customers. Over the last 12 months, we've opened more than 31,000 current accounts online, and we are starting to see the first follow-ups on personal loans provided online to prospects. And then let me give you some more figures to crunch. 31% of new current accounts were through self-sales, and that goes up to 8% on the corporate side, corporate current accounts through remote sales. I expect these figures to further grow over the next quarters. But let me underline once again how paramount it is for us to really focus on the relationship we have with our customers. Page eight, this is the focus on people. I'll never tire to underline this.
It's the most important strategic factor ever, and it's very close to our heart. As a group, we are maybe, again, a countertrend we're showing with the market. We are hiring people. We've hired 167 people in the first half. The average age is 30 years. We have a target for the full year of 2024 of 280 new hires, focusing both on junior profiles, but also more senior profiles with STEM people or with private banker skills. Let me underline the focus we have on young people for both Credito Emiliano branches, but also for Credem Euromobiliare Private Banking. These figures are very important, and they reconfirm our ability to attract talent in an inclusive working environment, focusing on professional development based on merit criteria. We believe in training all talents with training activities that are not necessarily related to their specific role. Job rotation is very strong.
Every two years, a talent is changing his or her work position and his or her compensation. And then we are redefining our purpose and our corporate value. We started up a cultural growth pathway very much based on the new diffused leadership model, which puts people at the very center, at the very core. And people will always have greater opportunities to make decisions within their job description and within a more agile organization and lean organization. In order to spread the model, we have a multi-layer training program involving all the managers of the group, but also a training program and engagement program, both in-person and digital, for the more than 6,600 people who work for us. And something else that really triggers people is to constantly listen to our colleagues. We have systematic people satisfaction surveys.
The last one engaged about more than 80% of the people with the level of satisfaction higher than 70%. Areas of improvement are very important for us, and they are food for thought, looking forward, going forward. Training, again, it's very, very important, and it's probably going to be seven days per year per person. Let's go back to financials for the first half of this year. We move to page nine of our presentation. The first six months of the year confirm sustainable growth of our revenues. The core income is up year-on-year of 8%, thanks to the excellent performance of both the net interest income and the non-interest income.
Revenues are in excess of EUR 1 billion, with a growth of 8.7%, and the quarterly performance quarter one, quarter two, and quarter three is affected by non-recurring items, one-off items, such as higher performance needs, for instance, that characterize Q1. Cost performance is in line quarter on quarter versus the first half of 2024 is affected by higher costs, thanks to the collective bargaining labor contract and other items that I mentioned during the previous conference call. That is to say, our commitment in 2024 to constantly improve our service model through a very large number of IT projects that are paramount to boost our organic growth, increasing our volumes and increasing our expanding our customer base. Despite operating cost trends, we still are growing our revenues more than costs, and that net operating profit is higher, is 10% higher and EUR 332 million. There are no deterioration signs.
Annualized cost of risk is on the screen again, and we get to a net profit of about EUR 324 million. So net interest income now, page 10, the NII performance is indeed very positive. In Q2, it's flat versus Q1 2024. And thanks to better average volumes and average rates over the period that are higher than expected, that leads to a slower decline in the range that is down 3 basis points, similar to what is happening in the banking system. And this decline is due to higher repricing of the direct funding versus loan growth. And our growth is mainly driven by funding or deposits, time deposits that were very well accepted by customers. And this is a good opportunity to turn that into assets under management and also to attract new customers to further boost volumes going forward.
In a nutshell, 2024, the first half of 2024 was indeed showed a favorable performance. So we expect our operating NII to improve going forward, and we will have to focus on increasing volume consistently with our organic growth strategy and to support this revenue flow against the backdrop of decreasing interest rates. Let's now move on to page 11. The non-interest margin overall contributes for about EUR 220 million, is up 7% versus the same period last year. If we compare it to the first quarter of this year, there are some one-offs that affected or characterized the Q1. Banking commissions show the same growth we have at the beginning of the year. We expect even better performance in the second half, driven mainly by higher business volumes and loans.
Commissions are recording a very good result, especially if we consider the limited placement commissions we booked in this quarter, in the second quarter, placement commissions, which instead had strongly characterized the first quarter. This confirms the excellent recovery of our asset management, assets under management volume that will have an even more positive impact over the coming quarters, while the insurance. There were some assumptions of redemptions that we have potentially included in our CSM models, together with a provision on the fund that is a guarantee on the life insurance. As we said before, we really focus also on assets under management. Last but not least, we took profits in the second half of 2023.
So we will still focus very much on non-interest margin because, as we've said several times during the presentation, it will be a main driver against the backdrop of expected loan cuts or loan declines. Let's now move to page 12, net of inflation on personnel costs, stemming from the renewal of the national collective agreement. Our group is characterized by a level of investment and projects that's very dense and very intensive that we retain even at difficult times, and even more so we are retaining now in the so-called good years. Let me underline two very important items that are consistent with our sustainable growth strategy, with projects, with recruitments, with hirings, innovation. We're very much focusing on a service model and a strengthening of our sales network. We think that in the medium-term competitive scenario, this could be a distinctive feature to keep generating value.
At a very positive moment in time, we have to invest to be excellent also going forward. As it happened in the past, of course, there are some cost items, discretionary we may call them, for admin costs and variable and personnel costs that we can keep at bay under control at moments of uncertainty and possible weakness of revenues. We can keep that at bay. That happened during the pandemic in 2020, and that really enables us, should there be revenue, declining revenues, that really enables us to be very flexible. Let's move on to the next slide, slide 13, loans to customers. This is a very positive table because our group reconfirmed, once again, I should say, a clear outperformance versus the market, a growth of over 1% on a yearly basis.
That was already growing sizably in the previous year, while at industry level, there's a shrinking of more than 2%. So we're showing this. What we achieved is the result based on the strong synergies we unfolded and the organic growth we achieved. That's another very important factor to be taken into account by preserving our excellent profile of credit quality. Let's stress the outstanding job that was done by our sales network. And again, I would like to congratulate them on the job well done. And then consumer credit is performing well through the Avvera company. And let me remind you that this is going to be of the main business levers also going forward when market rates will go back to more limited levels. Other aggregate figures show a very meaningful outstanding result versus market. Residential mortgages and leasing are both growing in excess of 2%.
Short-term loans are suffering a bit because customers' companies are taking up a wait-and-see attitude or behavior, and then also rates play a role. Most companies also have a very good liquidity position. At a time of high rates, they think it's much more favorable to use what they have on their accounts to really tackle the short-term need. The good recovery in Q2 makes us hope for the best. Stripping off the seasonal effects we had in Q1 enables us to be very confident for the further development of this item towards year-end. Other mortgages are affected by the reduction in state-guaranteed loans. If we strip that effect off, we would record a growth also on this item line.
If we look ahead to 2024, the market scenario is still very complex and still has a weak loan demand, but we are confident and we want to keep on supporting corporates and households and foster our growth strategy, reconfirming the targets we set at the beginning of the year. Let's now move on to net inflows, page 14. We are talking about net production and net inflows, and it's EUR 2.7 billion of total new inflows from the beginning of the year, and this is quite consistent with our growth ambitions. Assets under management, as you probably remember, we talked about it in the previous conference call, is back to being positive thanks to the excellent results we achieved in the last quarter. The high level of return is also thanks to the customers' choices of time deposit or special products.
Both assets under custody and assets under management enable us to acquire new customers and to make the most of our potential, meaning leveraging our business model to translate, transfer these products to assets under management, always helping our clients, customers in making decisions, investment decisions. Page 15, deposits, assets under management and insurance, that's our stock. There's a sizable growth, EUR 101 billion.
Direct funding is at 4% deposits, and assets under management and insurance are growing not just because of the positive market effect, but also for the production we achieved over the last quarter. Let's focus on asset quality, page 16. We keep on having no deterioration signals on the asset quality side on our loan side. So we keep reducing our total NPL stock thanks to a few small disposals, EUR 36 million worth of disposals, limited amount, taking the total of our NPL to EUR 667 million.
The fall rate is very limited, 0.49%, and the cost of risk is five basis points. On that front too, we are seeing a strong resilience in our customers. And if we think of year-end, maybe, and advancing maybe in playing ahead of the curve for your questions, we think we will close at levels that are in line or even lower than last year. But our focus is very much focused, well, our focus is very much set on asset quality, which is something that's been characterizing our bank forever. And also thinking of 2024, 2025, sorry, and 2026, where there might be a worsening of economic conditions and therefore maybe an increase of the fall rate. In a nutshell, in summary, I can tell you that our asset portfolio, our loan portfolio is of excellent quality. Let's move to NPL coverage. We are on page 17, 17.
NPL coverage levels are at the top of the industry, about 59% over the total NPLs, a level that enables us to look to the future, being aware of relying on a competitive edge on our loans, a sizable edge from all perspectives, even in case of worsening of the economic scenario. Let's look at the funding table, page 18. After the last issuances of covered bond in this last quarter, we've completed our funding plan for the year. We just have one more opportunity to recall once we were authorized by the regulator of Senior Non-Preferred, EUR 338 million, still outstanding, on which we've already made a pre-funding last year. We have a very high underlying buffer, versus the requirement that enables us to be very flexible in looking at market opportunities over the next quarter. Let's now move to our liquidity position.
We're on page 19, and NSFR levels and LCR levels are definitely high. LCR ratio is close to 190%, a very comfortable value, if you remember. We have fully repaid our exposure to TLTRO. We move to page 20, our capital ratios. As I said at the beginning, we have an excellent organic capital generation, CET1 ratio stands at 15.7%, especially thanks to the contribution of the profit for the first six months, but also to the quality of our loan portfolio and the reduction of RWAs. This capitalization level enables us to have buffer versus reg requirements that are very sizable. We are talking about 812 basis points. Some details before completing our half-year report. Let me tell you something about the future. We're on page 20. We can have some thoughts to face the coming years in the best possible way.
We are aware that our strategy is a one-of-a-kind strategy in the national banking scene. We are focused on organic growth and really want to enhance the potential of our federation of businesses that will enable to produce more revenues, even assuming rates will be lower. We will be investing to ensure excellent results over time. I would like to correct myself. It's page 21, not 20, says the general manager. You see our ability to perform over time along three elements: total business. We've doubled our inflows on funding and loans, reaching up to EUR 136 billion of total business customers. We managed to acquire more than 500,000 clients over the same timeframe so that we have ample room to further increase volumes, but also to focus on cross-selling, really leverage on cross-selling.
Last but not least, for the future perspectives, through different economic cycles over the last 10 years, we still have increased our non-interest income. Again, this is a distinctive feature we've proven historically. This revenue item will be of paramount importance when rates are cut, as we expect they will be. On the right-hand side, we see some options. We've already focused on them, and they can give us a way to support both revenues and volumes. Thinking of revenues, they are an excellent base to use as a leverage on both the lending side and also on the non-interest income, using the combo of wealth management and private banking. The commercial bank, the traditional with retail and corporate combination, will provide a strong support to both increase our operating income and also our fee and commission revenues. Let's close with a wrap-up with page 22.
This is really a summary of our future positioning because we are confident that even against a macroeconomic backdrop that's still evolving and that's still uncertain, we will be growing thanks to our ability to execute, that is, increasing volumes and increasing our market share. And we will do so through our federation of businesses, enabling us to diversify our revenue sources with pipelines that still have a full potential to grow. And moreover, we think that our service model, human plus digital service model, will be even more effective and will enable us to walk our customers, both private customers and corporates, through our consultancy services of our relationship management and through digital services to meet their needs for both financing and growth. And this will also improve our commission-related revenues.
Let me wrap up by saying that our positioning has all the elements, all the necessary requirements to grow and improve, even against the backdrop of declining rates. I think I can wrap up here, and I'm ready for your questions.
This is the conference operator. We're now moving to the Q&A session. Whoever wishes to ask a question, please press star and one on your phone keypad. To be removed from the Q&A queue, press star and two on your phone. Please ask your question using your handset. If you want to ask a question, press star and one on your phone now. Thank you. The first question comes from the line of Giovanni Razzoli with Deutsche Bank. Go ahead, sir.
Good morning to all of you. I have a couple of questions.
From my point of view, you have the assets under management in the second quarter is definitely back to being positive after 5 quarters of negative results. What led to a change in trend? A new deposit in Q2 was very, very strong. There, too, did you have campaigns, or what was the trigger? Was there some risk off, and therefore clients and customers had or experienced an acceleration on their current balance stocks? And then the impact of Basel IV, could you elaborate? What kind of impacts do you expect in 2025? And what are the main drivers? Also, as far as capital is concerned, the new CRD, there could be positive surprises between convergence between CET1 above the group and the holding. How about the timeline for this for further improvement, which would lead your CET1 at 17% on a like-for-like basis?
Thank you, Giovanni. Thank you for your questions. Very interesting questions indeed. And let me stop on some of the Basel IV impacts. Then I'll hand it over to our Head of Planning, Alessandro Cucchi. And let's start from the assets under management. Let me remind you, wealth management, we are very much focusing on, last year we started strengthening our private bank, Credem Euromobiliare and private banking. And therefore, our main focus on customer investments and on consultancy, and therefore assets under management, was very, very strong. And therefore, we managed, even against a backdrop that was very much focusing on interest rates characterizing 2023 and the first Q of 2024. So despite that, we managed to come up with a sales proposition that our customers accepted, welcomed.
And this is a trend, I believe, and I'm saying that after a few not-so-favorable days market-wise, but the service model we have put in place and the ability to attract talent and skills from the market and our platforms, the platforms we have made available to our bankers and to our promoters and consultants, advisors and consultants, will enable us, together with a great decline we expect as the rest of the market in the coming months, we still expect to be performing really well. And let me say that excellent results were not achieved not just by the private bank, but also by the commercial bank. Let me remind you of something. We have a project, a development project in place for accumulation products. Instead of giving a spike straight away, it will provide consistency and continuity going forward on deposits.
The comment I was making before sharing with you also the increase in deposits. We have opportunities to acquire new customers. It's a flexible lever indeed, but we've tried to focus on it in the last few months. And then let me add, we added quality to it, an ability to acquire new clients and customers, not just through digital means, but also through the physical networks. And that really enables the group to have direct funding to grow. Let me say something more about the holding, which is under, of course, the supervision of the regulators. The Parliament approved the new regulations a few months ago. We are now talking to the regulators, of course, to make the necessary assessments. It's not something that is automatically triggered, but it's a consequence of interactions with the regulator.
One thing we have to assess is the timeframe that will lead to the coming into force of this new regulation, because what has to be taken into account is that it has to be enforced. The CRD will have to be enforced in the different national legal systems. And therefore, timing could be shifted forward, could be beginning of 2026, more likely. As soon as we have updates, we will promptly give them to you. At the time being, this is the information we have. Alessandro, maybe you can give more details on Basel IV.
Good morning, Giovanni. The overall impact of Basel IV without considering the Output Floor effect, it's about 60 basis points. That's our estimate, of which 50 we expect in 2025 and 10 in 2026, depending on, because apparently the market risk part will be extended to 2026.
The output floor, it's still early to have an overall assessment, but I don't think in our case we'll have sizable effects before 2030. The values I gave you do not factor in any possible capital management actions that we instead perform on a regular basis. You've seen the effects of some of those on RWAs and the data we disclosed. Therefore, this is the growth of possible improvements that we can make. So 15, 2025 is mainly operating risk. The combined effect of operating risk and the credit risk. In our case, we have a positive effect on the weighting of the insurance part, lower weighting of the insurance part.
This question comes from Luigi Tramontana with Banca Akros. Go ahead, sir.
Good morning to all of you. Thank you for the presentation. I have a couple of questions.
First of all, on the NII, you talked about volumes and against the backdrop of declining interest rates. I'm thinking you're wondering about the sensitivity you may have to declining rates. So what is the contribution you expect to NII stemming from the coverage procedures on core deposits? And what is the sensitivity you have today to tax reduction? Sorry, rate reduction. Second question on capital. As you have a lot of capital and over years and decades, I should say, you've proven your ability to keep the credit risk at bay with a superior quality versus the system average, the industry average. I was wondering, your current payout is lower than the system average and the industry average.
So do you think you can improve it, or are you going to retain this sizable amount of capital and to then instead resort to have the necessary means for a possible external growth?
Let me answer the second one. Thank you for your question because I was expecting it. Then our colleagues will answer on the sensitivity of our NII. Let me remind you that the dividend theme, it's not something the board of directors have to address, but it's something we tackle towards year-end for 2023. I am sure you noticed that our board proved a good awareness on dividend and payout and confirming the balance we strike between rewarding shareholders and at the same time retaining a strong capital position to be able to withstand, also to somehow confirm our growth commitments.
I was thinking of loans and to face up and address any evolutions from the regulatory viewpoint. So this is the balance we want to strike. It's a pillar in our strategic priorities between medium and long term, for sure. And here we expect sizable profitability this year too. What I can tell you is that this could lead to possible reasonings on profitability and rewarding shareholders. But the overall dividend level we have seen in 2023 could be the starting point with the opportunity of possible improvement for 2024. However, while I'm thinking about this, I have to remind you again that this is something that is looked into by the board towards year-end when we have the overall picture of the results that we are building as we move through 2024. Alessandro, can you add?
Luigi, let me try and give you a broader view on the question you asked on the NII. Sensitivity. We have a sensitivity to a parallel increase of about 100 basis points of the curve equal to EUR 112 million, positive EUR 112 million. Should there be a parallel decline of 100 basis points, the sensitivity is down to EUR 65 million roughly because now we have, right now, we have a management of interest rate risk. We like to do that with natural hedging with then maybe positions in derivatives. Unlike what we had before, expecting rates to be high, we were positioning on direct money and now or deposit. Now we are focusing on loans. That's why there's no symmetry between this policy and the increase and decrease of rates. Let's talk about the possible repricing of assets with reference to the first question.
We have an average better calculated, computed starting from the tax increases, 60% on loans and 40% on deposits. We have an almost certain rate decline now ahead of us. We expect our loan profitability to stand their ground better with a lower better thanks to the production we've generated over the last 12-18 months and our ability to stand our ground looking at the range. As on the funding and deposit, it will very much depend also on the competitive policies we'll see in the market, especially as far as time because it's our concern. We still have assets, fixed assets with fixed rates that have to be repriced for 2024. We expect a positive component that will offset the deposit and funding cost on the recent issuances. There should be a positive impact on 2025, 2026.
We have EUR 1.5 billion worth of assets with fixed rate in 2026 and EUR 1 billion in 2026. So the effect of repricing will be positive despite the possible decline in interest rates.
Thank you very much for this level of detail.
Next question comes from the line of Noemi Peruch with Mediobanca. Go ahead, madam.
Good morning to all of you. I have a couple of questions. Also, always on NII, the results in 2023, you gave us a guidance for 2024 and from stable to flat to -5% on the NII after the results of the first six months. Can you update that guidance or are you retaining it? Rate sensitivity, you mentioned the 12-month rate sensitivity. My question is, could you give us some color on the two-year rate sensitivity or the one on short term and then volumes and loans? We saw loans recovering Q2.
Do you think that this growth is sustainable? As most of those were short-term loans, how do you see loan demand evolve in the second half of the year and in deposits? You are very active from a sales perspective. How is your strategy going to change with lower rates? What is the average maturity of your term deposits? When do you expect you will have fee benefits for changing deposits into assets under management? Thank you very much.
Very well. Good morning, Noemi. On the rate sensitivity, I will have our investor relation team get back to you. On the NII, I'm sure you'll remember you were right about the guidance we gave you. Right now, we are more focused on the part going towards flat between one and five. It's much closer to zero.
As to loan volumes, we are confident, as I said during the presentation, because both on both private and corporate side, we have a positioning and a completeness of product factories on the one hand, on distribution channels on the other hand, that make us think that we can carry on as we did over the last 10 years to keep acquiring market shares starting from private customers. Let me remind you about the role of Avvera talking about loans. We have an excellent ability to really have a franchise in the lending market, starting from mortgage loans to personal loans to targeted loans to salary-backed loans, etc. We have a huge number of distribution channels, in addition, of course, to the main ones that are our group sales networks, the branches, financial advisory as a way to further propose products.
Within Avvera, we have specialized mandate networks for these products. So we have market coverage that is really meaningful and a coverage that is fully integrated with the group because the commercial bank also talks to its own customers together with prospective customers. These specialized mandate networks on mortgage loans, they have the ability to capture, for instance, at a real estate agency, a possible deal. If we move on to the corporate side, there too, above and beyond the specialized distribution channels that characterize our group, we also have a good coverage when it comes to product factories, thorough complete product factories, starting from leasing products for investment, factoring for working capital, and for the full pipeline-related products. This is something that going forward will be of paramount importance for the development of our loans and the growth of our loans.
But we have specialized services as well. I'm sure you remember Credemtel, which is our digital service company, digital service to corporates. And that enables us to talk to corporates, not just for our typical job, which is issuing loans or providing cash in or collection or lending services. We go from electronic billing to fully digitalizing corporate processes to supply chain. We have stakes in companies so that we can offer IoT, Internet of Things services to corporates. And I think this way to really have a wraparound, to have an all-around approach to companies will be successful. And it's a challenging backdrop. It's a challenging scenario, as you were reminding us. These two quarters showed a weaker demand. But despite that, we kept growing. And I think that going forward, the next quarters will be more positive outlook-wise than now.
And there'll be greater propensity towards investments that corporates are showing when rates are further cut. And let me add that for corporates, we have dedicated growth networks for business and corporate. This is a type of culture that is really characterizing our distribution networks, and that will provide positive results. I'll give the floor to Alessandro for maturities on time deposits.
Good morning, Noemi. Term deposits. And then the good mix between sight and term deposits. We have 83% sight and 17% term deposit. We were slightly higher than the market, and they are flat, however. In our case, maturity, the average maturity on time deposit is about five months. And so we expect the aggregate figures, time or term deposit should decline in the coming months. But we are going to be flexible for the use of time deposit or term deposits. Delle preferenze che avrà la clientela.
Depending on how markets are moving and the preferences of our customers.
Mr. Campani, for the time being, there are no questions in the queue.
Very well. On behalf of all of us here in attendance, we would like to thank you very much for joining our conference call and have a good summer holidays. Thank you, and talk to you next time. This is a cooperative.