Good morning. This is the Chorus Call operator. Welcome to Credem's conference call presenting H1 2022 results. Let me remind you that all participants 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 keypad. Let me now turn the conference over to the General Manager of Credem, Mr. Nazzareno Gregori. Mr. Gregori, you have the floor.
Good morning to all of you. Thanks for logging in and for being with us, even though we are very close to the holidays. We have Angelo Campani with us, the current co-manager of the group, and as we disclosed yesterday, he will replace me on the 31st of January, 2023, when I will retire. Angelo, please take the floor.
Thank you, Nazzareno. Good morning to all of you on my behalf, too. I'm very pleased to take part in this call. Nazzareno, you have the floor again. The recent macroeconomic backdrop was affected not just by the pandemic, but unfortunately also by the effects of the Ukrainian war and the energy crisis, with a subsequent contagion effect on the market, and thus making the economic, political, and social backdrop more complex. Let's now hope things will not even get worse because of what is happening in Taiwan. I'm sure that the banking industry is playing a more and more essential role to support families and households, especially against this very backdrop that is characterized by a high level of uncertainty.
I can tell you that the results I am about to to disclose underline how the group was able to adapt to the fast changes in the economic cycle and also to strengthen its foundations going forward, and to be able to grasp opportunities deriving from the financial backdrop and to help our customers in rolling out their projects. That was made possible by the excellent work made by our people who are still showing a very strong attitude towards innovation and teamwork. Teamwork is paramount, especially now in this scenario. That's why I would like to really give them my warmest thanks. Let's now move to page two.
Also at the end of the first half, the main indicators show that the way we do banking and our business model are very effective and ensure to get results that are top of the industry. Despite the current scenario, we still have our loans growing at a pace that is higher than that of the banking system. Over last year, we've seen an increase in excess of 12 percentage points, so six times the industry data. We've also declined or reduced the impact of NPLs, and now it's 2.2%, and we've increased our asset quality, which is now aligned with European average. Profitability indices are very positive and reconfirm the ability of the group to generate value in the different phases of the economic cycle.
We have a return on tangible equity in excess of 11% and a level of excellence at the very top of the system, banking system. Even though we are going through a high level of volatility, we still grant and ensure strong capital standards, 590 basis points versus the SREP 2022 requirements. Let me say that these results as a whole reflect the quality of our people and the effectiveness of our business model. Quarter after quarter, we have managed to follow our pathway in towards generating value over time. Page three. Let me now stop on business diversification. Let me tell you how recurring revenues is well-balanced, operating income is well-balanced and in excess of well, our core NIM is in excess of total revenues.
When it comes to rates, if you look at aggregate features, despite the market volatility, could ensure our revenues to further grow stemming from the development of our NII. Page four. Before I deep dive into our financial highlights, I'm very happy and satisfied to show you some figures that show how committed the group is to growing its platform and making available to our clients an omni-channel approach that can be a distinctive feature also going forward. We have Internet banking retail growing 2.5%, and with an impact on bank accounts, which is 70%. In June, 94% of our overall transactions happened through digital channels. If we just look at corporate transactions only, we get almost to 95% of the total, reconfirming our excellent trend towards digital migration.
The overall results are the outcome of a digital evolution pathway we have been following, because we want to be reactive and adapt to the customer needs. At the same time, we want to provide an offering that will offer both the benefits stemming from technology, stemming from the relationship between asset managers and clients, be it investment protection or disbursement of loans. We're on page five now. Even in 2022, we are still focusing very much on sustainability and to each and every part of the sustainability project and ESG values. Last year, we released our non-financial reporting that listed the objectives that we had achieved during 2021. Let me give you a list of what we've done in the first six months of 2022 as well.
We keep investing to improve climate risk analysis. We have a partnership to come up with an ESG data collection during the first half of 2023 on a first sample of 800 corporate clients to have a first look of physical transition risk, to then move on to analyzing all of our corporate clients. The project we have started will enable the group to better understand how companies are embarking on an ESG pathway so that we have reliable data to tap from. We also want to improve our ESG score, in addition to improving our environmental, social, and governance-related performance for us and for our clients, by offering targeted loans and services.
We know that the next four years, also thanks to the commitment at country level, thanks to the PNRR, the next four years will be of fundamental importance for the environmental and digital transition of all companies. That's why we launched a dedicated plan called Credem per l'Italia del futuro, Credem for Italy of the Future. It's EUR 16 billion over a time span going from 2022 to 2025 to finance corporate projects and offer a complete suite of products to provide our consultancy, our advisory to our clients. Then in cooperation with FEduF, the foundation set up by ABI to offer clear and accessible information on eco-sustainability and financial sustainability, to, of course, comply with the UN 2030 agenda.
In 2021, within our group ESG framework, we had the first issue of a subordinated Tier 2 social bond, EUR 200 million. It was the first tier two social bond issued by a European bank to finance and refinance assets that have a positive social impact to show that we are strongly committed to helping the economy as a group. This is page six. We have our income statement. As you can see, we have an excellent revenue trend, up almost 8% and almost 10% in recurring items, not just because of the consolidation of Caricento, but also to the relevant performance of our NII and our fee components, despite, of course, the market context and scenario.
The trending operating cost is flat on a like-for-like basis, and if we take into account the consolidation of Cassa di Cento and also taking into account business growth volume-wise as recorded in the last year. These growth dynamics enable to provide a better net operating result increased by more than 10%-15% versus H1 2021. That reconfirms how our different revenue components are growing sustainably. Then NPLs remained at an extremely low level after updating models, also thanks to the positive non-recurring effect of having an effect of about EUR 11 million in the first half of 2022. We have write-backs in addition to the first quarter thanks to the updating of credit positions we've received from Cassa di Cento for an impact of about EUR 103 million.
Disposals made over the last quarter gave a contribution of about EUR 4.5 million. The rest is driven by other write-backs on the performing part of our portfolios of Credem Leasing, and Credem Factoring. Net of all these effects, let me tell you that we are not yet identifying meaningful NPL flows, and that of course has a further contribution to the very limited LLPs we have recorded. We are closing the half year reaching almost EUR 156 million of net profit, up more than 14% versus H1 2021. We're now on page seven. We have our net interest income here depicted. You see quarter-on-quarter growth. This stems from the higher portfolio volumes quarter-on-quarter of our securities portfolio.
We have an increase in loans, and we have the first effect of the rise in interest rate curves. The positive performance of this quarter and this six months lays the right foundation for a further growth in the second half of the year, even though there'll be a lower TLTRO contribution because benefits will be stopped as of July 1st. Let's now have a look at the customer spread. We are starting to see the first impacts of the rate increase up 50 points in line with the banking industry. So loans are about four, the rate on loans is about 4 points higher, and while the average deposits rate is very close to zero, that is contributing to our NII, of course. We are on page nine now. Our securities portfolio.
The securities portfolio breakdown is flat with BTPs held to collect is 95%, and that enabled us to freeze the effect of the recent BTP bond spread increase. The average duration at seven years, while domestic securities is 3.8 average maturity on the HTC and 3.4 on the HTCS component. Of course, we've had purchases for Italian sovereign debt always held to collect. In the next six months, we are going to further our purchases in other asset classes to rebalance the effect of Italian treasuries to get to levels as we had in the previous year, same quarter.
We want to seize opportunities for repositioning, but we want to have a well-diversified securities portfolio to somehow offset volatility affecting capital, as we have shown you in our NII trend. We're now on page 10. Let's look at the net interest margin, NIM. Both banking fees and management fees for the last quarters were pro forma adjusted according to the new instructions for balance sheets and financial reporting. There are no, however, changes in the totals of our overall net interest margin. Commission recurring performance fees have a good growth. The NIM core grows about 5.1% versus H1 2021. Assets under management are higher versus H1 2021, also thanks to the excellent work we did last year, our network did last year, and our product factories did last year.
Performance fees are EUR 105 million versus the last quarter. Of course, they are affected by the current market performance and include and factor in the positive impact of some placements. Banking fees are up EUR 58 million, almost EUR 59 million, growing about 15%, also thanks to the consolidation of Cassa di Cento and the excellent performance of our insurance activities, growing both quarter-on-quarter and year-on-year and confirming the importance and the central role of bank insurance we have to meet our customer needs, especially in the current social and economic scenario. We're now on page 11. Let's have a look at operating costs and D&A. Personnel costs are in line with what we had in Q2 2021, net of consolidation of Cassa di Cento.
Admin costs on a like-for-like basis is consistent with the volume increase as our business increased and in compliance with the group projects. A lower impact in the first than in the first Qs of 2021 because of course we had the consolidation of Cassa di Cento. We are still focusing on investments that are increasing, and you see amortizations are also increasing. We will keep supporting businesses and people with a strategy more and more focused on digital and innovation. We know that the markets are evolving at a higher and higher pace. Page 12. Again, loans to customers. Let's start from loans. As I said at the beginning, loans to customers are growing. Year-on-year, they are growing 12.3%.
Let me say that net of the masses that were legacies from Cassa di Cento, we still have a positive cash of 7 percentage point. Also generally short-term loans are up almost 18% versus H1 2021 thanks to the excellent Avvera contribution, EUR 1.2 billion of loans, personal loans, target loans and third-party backed loans. We have supported our net working capital to support the economic recovery, and then strong trend on residential mortgages and leasing up, respectively 8.7% and 3.3% year-on-year.
We have an excellent growth of other loans, up 13% versus H1 2021, which until last year was very much affected by our commitment to support companies through state guaranteed loans to somehow face up to the COVID emergency. EUR 3.4 million are state guaranteed loans included in that item. Let me reiterate our commitment, because we want to increase loans to support our geography, to support families, and especially in this very complex scenario, and that is characterized by a high level of uncertainty as to the growth we expect at year-end. Here, maybe I'm answering some of your questions already.
We have to bear in mind that the last couple of years were affected by state guaranteed loans and moratoria, as we expect lower growth rates in 2020 to about 5% year- on- year. I expect this to be still enabling us to be at the top of the industry. When we're on page 13, we have a comparison with the rest of the banking industry, so our overperformance is still very marked even over the last six months. In June, we managed to have our aggregate figure to be growing six times higher than the system, and that's enabling us to further gain more market shares. Our sales network have been working wonderfully, and it's an excellent result they have been proving and providing over the years.
Page 14, we have net inflows. Despite the scenario, we still have positive net inflows. Market performance is affecting assets under management, and it's also affecting the way customers are picked. There was a lower contribution versus last year when the market conditions were totally different, and that's why a positive direct deposit inflows reconfirm the fact that customers pick us also for assets under management. Congratulations to our product factories and distribution networks. The current scenario forced or pushed our clients towards assets under management products with positive inflows for about EUR 700 million. We have retail net inflows that are very positive and customers are somehow waiting to see what will happen. There are some effects on companies' sales policies aimed at improving the liquidity level of our group.
Page 15, let's say deposits, assets under management and insurance. Of course, this is affected by how markets are performing. I was saying average volumes are higher than last year over the same time span, thanks to the good levels of direct deposits in 2021. The stability of these figures represent an excellent opportunity for us to keep on supporting growth, fostering growth, and having a shift towards assets under management as soon as the economic cycle gets better. Now we are on page 16. We have bond issuances and maturities over the last six months. You've seen us in the market, in institutional market.
In January, we issued our first Green Senior Preferred bond EUR 600 million worth of issuance, important for MREL purposes, but also because it was our first ESG issuance, consistently with our will to favor the transition, for both corporates and families. In May, we had a EUR 500 million Covered Bond issuance with a 2029 maturity. In June, with the issuance actually starting in July, we have a social Tier 2 issuance by Credemholding that will enable the group to be very efficient capital-wise and to further increase our capital soundness. Let me remind you that the setup of this issuance is similar to the one we had in September 2020, and it's a mirror transaction by Credem, fully underwritten by Credemholding and therefore eligible also for MREL purposes.
Let me move on to page 17, credit quality. As you can see, we keep on reducing our NPL stock. End of June was EUR 745 million, down 9% versus the end of 2021, also thanks to a number of disposals worth about EUR 86 million, with a positive impact on our P&L. As a consequence, we are reducing our NPL ratio to 2.2%, very close to the European average and also definitely lower than the system average, banking system average. This level of excellence enables us to be ready to face up to a negative economic cycle. As I was telling you at the beginning, right now we're not seeing any meaningful deterioration in our asset quality. Page 18, NPL coverage.
We are 52.16% on the total NPL. 73.6 % if we look at just bad loans. If we look at the shortfall and the additional coverage level in consistency with the addendum and capital provisional requirements, we have a coverage of 59.12% and 84.8% on bad loans. Again, these figures are at the very top of the banking system. Page 19, cost of risk. The excellent level of our asset is one of the key points in our strategy and the way we do banking. On the one hand, we can ensure maximum efficiency is granted when it comes to our credit portfolio and at the same time, loan portfolio, to reduce the impact on our P&L when there's high volatility in the economic cycle.
Thanks to the lack of further NPL flows and some non-recurring write-backs, we have a cost of risk which is negative, and it's -1 basis point. Net of non-recurring items, EUR 12 million for the quarter, 4.5 positive contribution, and coming from disposals, and then the updating of rating of Cassa di Cento and some write-backs. The normalized cost of risk is much lower than the system average, and it's about 8 basis points. Let me tell you that the update of models did not have a meaningful negative impact. We went from the previous COVID framework to the new scenario, because we made very prudential provisions in 2020, and then we had partial write-backs in 2021.
We have introduced, with a weighting of 50% and 40%, a baseline scenario and an adverse scenario to be able to keep on monitoring the potential worsening and deterioration, but always with utmost caution. Cost of risk is not the level we expect for year-end. We expect a slight increase in default rate more likely to take place for 2023 and 2024. To answer some of your questions, cost of risk for us in 2022 is probably lower than 20 basis points, and to then reach 30 basis points in the following two years, 2023 and 2024. Page 20, assets and liabilities. These are the main movements in our P&L.
As you can see, loans are going up in our securities portfolio, mainly in the held-to-collect portion, and then deposits from customers are flat. June loans to banks is mainly deposits with the ECB, and that was reduced due to a seasonality effect. Then we have another institutional deposit, probably, thanks to an increase of the available securities. First half, we had an increase in wholesale bonds because of the issuance of the end-of-May Covered Bond. We did not include the EUR 200 million because the actual starting date or accounting date is July and not end of June. If you look at the indices or liquidity ratios, we are well above the regulatory level, so that enables us to be very flexible in defining our funding strategies. Page 22.
Before we move on to your question, let me wrap up by giving you some capital detail. Despite the volatility we are encountering in the market, we reconfirm our very high capital sum, CET1, almost 13.5% buffer on requirements of 590 basis points versus the 2022 requirements. Net profit for the period and effects on reserves, both on the bank and Credemvita portfolios because of the negative trends we have on the markets. RWA reduction is stemming from an update of IRB models that was tied in with the TRIM also in the first half of the year. I would like to thank you very much for your attention, and now we leave room for your questions. Thank you very much.
This is the Chorus Call operator. We are now starting the Q&A session. If you wish 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 keypad. Please use your phone handsets to ask your questions. If you want to ask a question, press star and one on your phone now. Thank you. First question comes from the line of Christian Carrese with Intermonte. Please, sir, go ahead.
Good morning, Mr. Gregori. I really wish you will have the best during your retirement. I would like to give you a big hand to congratulate you on the work you did over the last few years. Well, a couple of slides of slide 11, where we can see a constant growth of also your headcount over the last 12 years, which is unusual for the banking industry, which today is cutting headcount rather than hiring people. Also it can be summarized in the evolution of cost of risk, slide 19, where you've always had a cost of risk that was very low. Doing banking in the right way, in a fair way, with a conservative lending, as you've always done, will lead to excellent results. That really sums up the work you did over the years. Going back to your presentation, I have a couple of questions.
On the NII on the one hand. Well, elaborate on your sensitivity to rates, especially for the second part of the year. What are the moving parts when it comes to rates on the one hand, expected loans on the other, and the benefits stemming from TLTRO? Maybe looking further than 2022, looking up to 2023 and 2024 as well going forward. What kind of growth or situation do you expect versus interest rates? Then something you announced in July, Credem Euromobiliare Private Banking. Could you elaborate what you expect this entity to provide to the group, this new entity that gathers the private banker from the two entities? What are the synergies that will be unfolded? What is the potential development that you expect from this vehicle?
First of all, thank you very much for the very kind words, and that are comforting and that will help us go along the same pathway. First question. In the first half, of course, the rates, the securities portfolio and volume increase supported our NII. For the next six months, we will have the TLTRO benefit coming to an end, so we have assumed zero as contribution in the following half year. The way rates are going and how the NII is also faring should enable us to grow about 7% year-on-year. Also taking into account factoring in six extra months of Caricento consolidated in our consolidation scope. The way we generated a new entity and a new hub for private banking, it's consistent what we've been saying over time. Our business model is multifaceted, is well articulated, and it's aimed at supporting savings and assets under management.
Starting from the eighties, we've always focused on private banking as well. We thought that coming up with a highly specialized network could, and I'm confident it will, extract better value from our policies or more values from our policies, because somehow we are stimulating our product factories to do better. At the same time, we should be able to manage our retail business unit at best, because our business, retail business unit will have to focus on other objectives. This further specialization that is embedded into our business model, I think will prove very satisfactory going forward, because we'll have better market visibility, we will be able to recruit people, and we will become a center of excellence. We are confident in that. We strongly believe in it.
The next few months, of course, will require a lot of work because we will have to set up the new vehicle. We are waiting for the clearance to come. However, we have very clear objectives and goals ahead of us. We've already checked the geography, so it's a well advanced process already, and it will happen in due time, and it will be completed in Q4 2023. That's the rationale, the underpinning. Let me hand it over to Mr. Cucchi, who can add on to the first question you asked. Alessandro, please go ahead.
Alessandro Cucchi speaking. Good morning to all of you. Mr. Carrese, you asked for sensitivity to interest rates increase. For us, it's 100 basis points on the curve. EUR 52 million would be the effect over 12 months.
Thank you very much.
Next question. Next question comes from Giovanni Razzoli with Deutsche Bank.
Good morning to all of you. I would like to again thank Nazzareno Gregori for leading the bank in an excellent way, leading an excellent bank in an excellent way. It's not an easy time. Best of luck to Angelo as well, who will do just as well in the coming years, I'm sure. On the one hand, we have a question on NII. What is the quarter trajectory? Does that already include some one-off stemming from the contribution of inflation-linked bonds or inflation-linked BTPs, so to say? Is it a meaningful material amount or not in Q2? You gave us a sensitivity of about EUR 52 million at 100 basis points with rates featuring 100 basis points.
What are your forecasts focusing on the cost of deposits? So even with another 50 basis points of increase of interest rates do not affect the cost of deposits being affected very much, so you don't see a threat of the cost of deposits going up. Cost of risk, could you tell us about the stock of provision overlays that is tied in with COVID you can rely on as of today?
First of all, thank you very much for your words, for your kind words, for all the details. At least for the first couple of questions, I hand it over to Mr. Cucchi.
Thank you very much. Mr. Razzoli was asking whether there was something special to be highlighted on the NII. It's a growing contribution by the operating, the NII coming from the securities portfolio, EUR 17 million, it's growing. It was EUR 10 million in the previous quarter, so it's growing. It's a value that we expect also going forward. We expect it to be flat going forward because the securities portfolio, especially right now at this moment in time, is a strengthening factor to the NII. The impact on the cost of funding, it's similar to what was said about what you said about the bank. As to the overlay you mentioned in your third question, there are EUR 5 million-EUR 6 million, if I'm not mistaken, of value that is still tied in with COVID.
Thank you.
Next question comes from Manuela Meroni with Intesa Sanpaolo. Good morning to all of you.
I again, I do endorse what the colleague said, so best of luck for the future and also my appreciation for the work you did until now, Mr. Gregori. I have three questions. The first one is on commissions and fees. Could you elaborate on what you expect commissions and fees to give as a contribution in the coming six months? They are still strong on the banking fees side. Management fees are affected by markets. What are your expectations going forward? The second question is on capital. I've seen benefits, sizable benefits, stemming from the adjustment of IRB models. Are there more contribution we can expect during this year or maybe next year after the change and amendment of models and regulatory tailwinds or headwinds?
As to synergies with Caricento, we have been working on that for quite a few quarters. Can you reconfirm the synergies that you had originally assumed, or do you see any extra contribution or synergy? Thank you.
Thank you very much. Again, thank you, too, for your kind words. Let me answer the first question as on fees and commissions, management fees. We see going forward, it's a flat trend or maximum up 1% net of performance because you have to factor in the current market conditions. Banking fees, instead, we see them growing 6% going forward. In the insurance business, let me give you a figure, we think we can get to slightly above EUR 60 million at year-end. These are the three targets for fees and commissions.
As to synergies with Caricento, we do reconfirm them, and I believe that a better integration with our sales network and the fine-tuning of our policies will enable us to even enjoy greater synergies than what we have so far because it's a very nice geography, also very profitable geography. We are confident after the first year where we've been starting to work, we will have even better results. That is reassuring. It makes us more confident in our policy to grow and through acquisitions, for instance, because that will also improve our positioning. As to the capital question, let me turn the conference over to Alessandro Cucchi.
Mr. Cucchi speaking. As to the guidance we gave you on capital for the coming years, we do not expect any specific changes coming from IRB model updates or regulatory headwinds or tailwinds, apart from the known ones, and then also coming into force of Basel. We have both positive and negative. For instance, we have a lower pondering weighing in of the life insurance. We will, we have Avvera as well to be taken into account. We expect a, an improvement as to the independent capital generation, autonomous capital generation. Of course, the dividend, the decisions on dividend have to be made by our board of directors.
Next question comes from the line of Riccardo Rovere with Mediobanca. Go ahead, sir. Mr. Rovere, please go ahead.
Yes, yes. Good morning to all of you. Thanks for taking my questions. Two or three questions I have. If I understood correctly when you talked about LLPs, so far you have two scenarios, a baseline scenario and an adverse scenario, if I understood correctly, weighted at 60% and 40% when you work out on losses on LLPs. What macro assumptions are part of your baseline scenario and also in the adverse scenario? Have you taken into account any possible stop in the cash flows? Then the contribution of your securities portfolio to your NII, you said growing EUR 10 million growth. Is it quarter-on-quarter or year-on-year? After that, how are you assuming your securities portfolio will move over time? Because currently there's some volatility, adding volatility to that P&L item because of course you build a portfolio, then you disassemble it, and then you build it again.
It's EUR 16 million NII, half of it in a half year, half of it comes from there. Somehow it has a distorting effect too. Then the third question is on Euromobiliare Private Banking. Do you think you can give more visibility to the initiative, maybe simply in your financial reporting? Are you trying to increase the visibility of that part of the business? Thank you very much.
I'll answer the last part of the question, and then I'll ask Alessandro Cucchi to answer the first two questions. Sure, we have made a decision, a strategic decision to go this pathway to make sure we can factor in the contribution stemming from that business line.
We do so because when you disclose information to the market, of course, we trigger somehow we stimulate the group as a whole to perform better, to do better after we've disclosed the information. When it comes, once we get the clearance, we get the necessary IT migration, when we will have the new legal entity, it should be by March next year. Starting from then on, we are going to be able to, of course, report data coming from the different areas, and that is a very valuable area indeed, and it will give its contribution to have a better appreciation of the value generated by the group as a whole. It's a strategic goal that has to be checked and monitored and then disclosed about in a transparent way. Alex, would you like to answer the first two questions?
This is Alessandro Cucchi speaking. The first question you asked on scenarios. It's scenarios that were drawn up by research institute. The adverse scenario includes a stop in the gas supply, and they have a number of macroeconomic variables. Let me mention a couple to make the difference between the baseline and adverse scenario. Base GDP growing 2.95%, and in the adverse, 0.5%, that's the GDP growth for the year. Again, a very different, very divergent scenarios, also growth-wise, depending on the weighting we have applied, as you reminded us, 60-40 is the weighting between the baseline scenario and the adverse scenario. The current reference framework is indeed a very conservative one.
I hope I answered your question, but if you want more details, we are on other variables, so we can get back to them. Also separately, you, we can get in touch. On the securities portfolio, the contribution is quarter. It's EUR 17 million for the quarter, and last quarter it was EUR 10 million, so the actual increase is EUR 7 million, the contribution to the NII. We see it as flat going forward, as our general manager said during the presentation. Please bear in mind that the projection for the increase in net interest income going forward, there should be a contribution of spread. The securities portfolio reacts immediately, and on the loan portfolio instead takes longer to react. There was a very meaningful delta for this six year.
We don't expect it to be just as big in the coming quarters or half year. Did I answer your question?
No, it's clear. But going back to your first answer, just to understand, when you calculate expected losses of the 12 months for performing, and then for stage two and stage three, so you have a model which highlights 10 basis points cost of risk. Having a 40% baseline scenario where you assume a stop in the gas supply. Do I understand correctly?
Yes, that's what we. Yes, the weighting is 40%, and we assume a stop in the gas supply. That's right.
Luigi de Bellis from Equita SIM. Good morning. Congratulations for the work Mr. Gregori did, and best of luck for Mr. Campani going forward. I have a couple of questions. One on Credem Euromobiliare Private Banking. Can we assume that it could be an aggregating hub somehow, and once up and running there could be a, maybe a better valuation by disposing of minority stakes to further grow? And then, assets under management, could you elaborate on the trend in July? Is it growing? Is it in line? What do you expect for the coming six months?
On the first question, this is Mr. Gregori answering. I think Angelo Campani can answer the question because we are talking about the future, about strategies going forward. So this is something that we are sharing with you, but I really want to turn the conference over to Angelo because he's the one who will give you an idea of how private banking will evolve over time. Thank you.
Thank you for wishing me best of luck because you always need it. A new legal entity for private banking. As Mr. Gregori was saying, our aim is to strengthen our service model, to strengthen our products, and we want to feel closer to private clients throughout the group, and we want to increase our shares with high net worth individual. We want them to choose us and to be very attractive for the market as well, the market at large. It's a very strategic pipeline for us, and it will be retained well, the group will want to retain full control over it. It will be one of our pillars to foster growth, to foster volumes, and to really support the size of the bank.
Secondly, the assets under management are, and the way they are growing is in line with our expectations. Because as you can imagine with markets that are being so volatile, not to say negative, it's a sign of the quality of service the group is offering and of the people who are working in the asset management part of the company, of the bank. July data are not yet available because we have to focus on closing the first half of the year. We estimate from now to year-end, assets under management plus insurance, we expect inflows of about EUR 1 billion.
Next question comes from Marco Nicolai with Jefferies. Good morning to all of you. Again, congratulations, Mr. Gregori, and best of luck to Mr. Campani.
My first question is a clarification I'd like to have on the sensitivity you gave. EUR 52 million over 12 months. I expect that this sensitivity only includes the part of assets that are being repriced over 12 months. If we were to extend our horizon and say 24 or 36 months going forward, how would the sensitivity change? That was the first question. Then, the loan growth. The economic slowdown does not seem to have an impact on the loan growth, and I'm referring to the recent, most recent ECB data. Could you elaborate on whether the type of loan you are disbursing is changing versus the past? And what is the trend of, loans tied in with new investments? Are you seeing changes in the, in the lending, arena? Thank you.
Well, let me answer the second question, and then I'll leave the first question for Mr. Cucchi to answer. Well, we have stated we expect loans to grow even over the course of the year. There are very many variables to be taken into account to answer your question, and this is the time of the year that is less suitable to start to come up with reliable calculations. You could even throw dice, and it's not. Lending could be subject to restrictions in case of recession because of course, the families and households try to spend less if we are in a recession. Running sensitivities for the different types of lending, I don't think we can give you safe figures. Maybe Angelo can add something to this. Thank you very much.
As Mr. Gregori was saying, providing you with longer term forecasts is very difficult. What we have seen both on the corporate side, the type of loans or leasing products they ask for, new products are really holding their ground or we're even growing versus last year. That's a sign of dynamism indeed. Then another important topic is on factoring, the working capital companies use. We are overperforming the market. I must say that small surprises we had over these last few days with the GDP for Q2 that was more sizable than expected is a sign that our economy is resilient. What we see in the market so far, after all, is still positive, is still looking forward to investing.
Let me answer the first question, and this is Mr. Cucchi speaking. Asking if we have sensitivities, longer-term sensitivities than the 12 months. We normally have 12-month sensitivities. That's the only data we can provide you with. We are not in a position to give you a precise answer to the question you asked. Of course, the longer the time horizon, you also have to include the competitive scenario in order to have a real data when it comes to net interest income.
Thank you.
Okay. Next question is a follow-up. Riccardo Rovere with Mediobanca.
Thank you very much. It's a follow-up on the previous question. On LLPs, if the current model suggests 10 basis points of cost of risk with an adverse scenario, assuming a stop of gas supply already embedded, how is it possible that LLPs land at 20 or 30 basis points instead of doubling or tripling, as you suggested at the beginning of the call? I cannot understand this. If the current level is already discounting a recession scenario or a full stop of the gas supply from Russia. How do you assess that?
Let me try and be clear, and it's gonna be very technical. If you want, we can meet, have a one-to-one meeting on it. The effect we are currently recording of 10 basis points is the replacement of current models, replacing COVID models, and it's the collective part. We have these small write-backs because the COVID models were already very, very strict. If we look going forward, the models tell us what they expect as expected losses.
This is what we say, cost of risk, slightly below 20 basis points this year and around 30 basis points in the coming years. It's two complementary scenarios. It's not the same view. If you want a forward-looking piece of information or figure, it could be 20 or 30 for the next two years, 20 basis points at the end of 2022. That would mean. Now you have less than 10. It means that in the second half of the year, it should be 40 to get to an average of 20 by year-end.
That's why I can't grasp. I find it odd. Difficult to understand how, because if the model suggests 10 now with the stop of gas supply already factored in, what can happen in the second? Hopefully nothing, but what can happen in the second part of the year to make it go up to 20. It's hard for me to understand because it's a short amount of time. It's six months from now to year end, or 18 months if we talk about 2022, 2023. So how can LGDs and expected losses be worsening so much?
So as to triple the figures you're giving now, three times higher than the figures you're giving now, when you are already factoring in the stop of gas supply in the data you gave. Worst case scenario, worst of the worst, so to say. 20s are guidance. In an unclear market situation, having seen an increase in NPLs, we would rather give you a prudential guidance, a cautionary guidance. What will happen, what will really happen, we will see it as we move through it.
As Nazzareno was saying during the presentation, we do not expect a dramatic acceleration or speeding up of these data in the second half of the year.
Bear in mind, this is Mr. Gregori speaking, that we have a very uncertain backdrop, apart from Taiwan, and we hope there'll be no escalation there. But we have elections in Italy as well, and then in September, elections might be a factor that will change the scenario, hence the uncertainty. Mr. Rovere, you know, we've talked about it often, we like to be cautious, as Mr. Cucchi was saying as well. We are quite confident that it should be below 20%, but we'll see. We'll see what happens. I would not neglect the effects that might be generated by the new political situation in Italy after September 25th.
Because if there are any whatever the government is, but I want to be an optimist, but if we will have difficulties in finding a government for this country, then maybe corporates may reduce investments and or there might be a deterioration of the risk and the loan situation. I would not neglect that kind of risk. That's my opinion.
Thank you very much for your answer.
Next question comes from, it's a follow-up, Luigi De Bellis, Equita SIM. Please go ahead, sir.
I have a short follow-up on residential mortgages. Could you give us an idea of how much is fixed rate and how much is variable rate? What are your expectation on volume growth both for mortgages and consumer lending this year and 2023? Thank you.
Alessandro?
Yes, I can provide the split between variable rate and fixed rate. Mortgages, 65% is fixed rate and 35% is floating or variable rate. Growth perspective, maybe I'm sure you want to comment on those. We expect a loan growth in 2022 of about 5%.
Thank you.
Mr. Gregori, there are no more questions in the queue for the time being.
Very well. If there are no more questions, I would like to thank you very much for joining us today. Best regards. I won't be at the next half year report, so I take this opportunity to say goodbye to all of you who have attended our calls over time. Thank you again and my best regards.