Earnings Call: Q4 2020

Feb 9, 2021

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Finnacle Bank's Full Year 2020 Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Alessandro Forti, CEO and General Manager of Fineco. Please go ahead, sir. Good afternoon, everyone, and thank you for joining our 2020 results conference call. Before we start going through the details of the presentation, let me please underline the key messages. This set of results confirms once again the soundness of our business model, able to deliver sustainable and industrial growth In every market condition and to accelerate growth in the current complex situation, adjusted net profit increased by 19% Adjusted revenues stood at $776,000,000 in 2020, increasing by 18% year on year, mainly supported by brokerage and investing. Operating costs well under control and confirming operating leverage As a key strength of the bank, with costincome ratio at 34.7%, Declining by 3 percentage points year on year, also thanks to the extraordinary performance of brokerage. As announced, 2020 also recorded a strong acceleration in the commercial activity with net sales hitting 9,300,000,000 Increasing by 59% year on year and with a strong contribution by asset under management, reaching a new record level at 4,300,000,000. Thanks to the increased productivity of our network of financial advisers and to the success of the new generation of products launched by Finicar's management. Let me remind you that these results have been organically generated and reached With no aggressive commercial hoofer and despite the introduction of the repricing on current accounts. Those dynamics were also confirmed in January with net inflows extremely robust at 891,000,000 And a solid asset mix with asset under management equal to $470,000,000 As for brokerage, Estimated revenues in the month of January were around $19,000,000 increasing by 30% year on year. This confirms once again that the floor of our business is now definitely higher. Let's now move on Slide 5 and start commenting on our 2020 results. As announced, in 2020, we reached Very strong industrial results, thanks to our diversified business model. We've adjusted net profit standing at $324,500,000 plus 19.2 percent year on year despite the higher contribution of systemic charges and complex scenario. Adjusted revenues in the period stood at 775,800,000 Up 17.9 percent year on year, mainly thanks to the contribution of brokerage and investing. As we have been able to capture the acceleration of the structural trends in place. On the banking side, our initiative On the smart repricing on current account allowed us to offset the impact coming from the lower interest rate environment. Please note that in December, after the final communication by the authority, we have found the banking Related to the smart repricing to a cluster of clients. Let me remind you that the effect on the net profit is equal to 0 as this refund was already accounted in the previous quarters under the line provisions for risk and charges. Excluding the contribution generated by banking fees for the smart repricing, revenues in the 4th Quarter would increase by 1.7 percentage quarter on quarter. Operating costs stood at €269,600,000 increasing by 4.4 percentage year on year, net of marketing cost in UK, Additional marketing costs in Italy to catch the positive momentum for growth and additional staff expenses Related to the unexpected lockdown in December, the quarterly distribution is characterized by the usual seasonality. We will deep dive on cost later on. Costincome decreased to 35% despite the continuous expansion in assets and clients, Thanks to our operational leverage and the scalability of our platform. Let's now move on to slide 6 and start to analyze more in details The dynamics of our results. Net interest income in 2020 remained Resilient at $270,700,000 decreasing by 3.8 percent year on year despite the strong the worsening of the interest rate environment. Thanks to the positive contribution by more than 7,000,000 from our treasury activities, namely yield enhancement strategies like unsecured lending and collateral switch and tiering And to our quality lending book. Let me please highlight that the negative impact generated by the low interest rate scenario has been Set by the positive contribution coming from the introduction of the smart repricing in 2020, which produced almost $12,000,000 of banking fees in the year. Therefore, overall banking revenues remained flat here on year. In the Q4, net interest income stood at $63,900,000 declining by 7% Quarter on quarter as the lower interest rates environment affected both financial investments and lending. Please note that in the Q4, There has been a further deterioration in rates. As an example, 5 years, euros moved from 39 basis points In the 3rd Q2020 to minus 46 basis points in 4th quarter 2020 And you rebar 1 month from 52 minus 52 basis points to minus 55 basis points in the quarter. The lower interest rates environment led to a reduction in leverage gross margins on interest earning assets from 0 point 98% in the 3rd quarter to 0.88% in the 4th quarter. Finally, cost of funding decreased by 3 basis points year on year to 1 basis points Due to the lower USD LIBOR, please let me remind you that our cost of funding related to deposits in euro, which represents 96% of our total deposit is 0. Later in the presentation, we will deep dive on the new commercial initiatives we are undertaking to sustain our banking revenues and further react to the decrease in interest rates. Let's now move on Slide 7 to deep dive on our non interest income. Fees and commissions stood at $404,300,000 in 2020, growing by 24.3 percent year on year. Thanks to the positive contribution of all products areas. Please let me note that the net commissions in the 4th quarter would increase by 8% quarter on quarter, Excluding the contribution generated by the banking fees on the smart repricing, trading income net of non recurring items Reached $97,200,000 in 2020, more than doubling year on year, thanks to the strong brokerage performance. We will deep dive more in-depth in the following slides. Let's jump now on Slide 26 for a focus on brokerage. Brokerage acted once again as the perfect countercyclical business, And it is producing structurally higher revenues compared to the past. In 2020, overall brokerage revenues Stood at $229,000,000 increasing by 73% year on year. On the top of the slide, you can find our usual chart showing the monthly brokerage revenue since our listing. As you can see, they are structurally higher since 2020. January 2021 has been another strong month, Confirming that the flow of the business has increased. This is true regardless of the level of volatility. Thanks to the contribution of 3 structural components. 1st, the deep reshape of our brokerage business. Let me remind you that we have recently launched a new U. S. Option platform and that we are in the process of vertically integrating certificates, Becoming issuer, market maker and distributor throughout our platform. We will deep dive later on this project. 2nd, the client base using our platform is widening with active investors that are that grown Significantly in absolute terms in 2020, standing well above the average level of 2018 2019. Please note that our active investor have an average of 4 executed orders per month, are wealthy people in their 50s with assets above €200,000 on average, And the vast majority of them has a relationship with our financial advisers for the long term planning of their financial wealth. 3rd, the increase in our market share. For example, our market share in Italy on equity traded volumes Has increased to 27.8% In December 2020, as recently confirmed by Associm. As announced, brokerage revenues were Strong orders in January reaching around $19,000,000 Please let me note that in January for the first time Executed orders were higher on foreign markets than on the Italian one. And this is very positive news for our international expansion plans. Let's now move on Slide 8 for a focus on investing. Investing revenues amounted to $245,300,000 in 2020, increasing by 7.1% year on year, thanks to volume effect and strong asset under management net sales, Driven by and higher contribution by Finica Asset Management. The strong investing dynamics We're confirmed also in the Q4 with revenues increasing by 5.6% quarter on quarter and by 11.3% year on year. Please note that management fees in the year increased by 4.6 percent compared to 2019. The quarterly increase was 5.2% with management fee margins Stable. Let's now move on slide 9 for a focus on our cost. This slide once again confirms efficiency to be part of our DNA, and core in our bank Representing a clear and unique competitive advantage. Operating costs stood at 269.6 $1,000,000 in 2020 with the usual seasonality among the quarters. Let me please highlight that in the last part of the year, we decided Spend additional $1,300,000 of marketing cost in Italy given the extremely favorable conditions. On top of this, we recorded higher staff expenses as in December some employees canceled their annual lease Given the unexpected lockdown in Italy, excluding this one off cost and $7,200,000 of marketing cost in UK, Operating costs grew only by 4.4% year on year. On marketing costs in U. K, let me please remind you that given The positive feedback reached so far in the acceleration of the business, we decided to spend more Compared to the initial guidance. Going into the details, 2020 non HR cost Stood at $170,000,000 excluding UK marketing expenses and the additional marketing cost in Italy In the Q4 that we decided to spend to catch up growth opportunities, they only grew by 1.3% year on year, confirming our strong operating leverage. Finally, staff expenses stood at €99,500,000 in the period, Increasing by 9.9% on a yearly basis, excluding €500,000 cost for the annual lease Canceled in December due to the lockdown. The increase is mainly due to the growth in the workforce related to the business development And to the internalization of some services after the exit from UniCredit Group. Let's now move on slide 10. In this slide, we summarize the breakdown of the bottom line in the Q4. Within the provision for risk and charges, we released $2,900,000 related to a positive adjustment on systemic charges, thanks to a lower than expected growth of deposits compared to the system, this once again proves the effectiveness of our initiatives to absorb our clients' liquidity. On top of this, after having refunded our clients for banking fees For the smart repricing, we also released $6,300,000 of provisions that were set aside in the previous quarters under the line provisions for risk and charges. Let me confirm that the full effect of the smart repricing On the whole, customer base is now in place starting from January 2021. Finally, we recorded $2,300,000 of higher provisions related to our sovereign exposures. This was not driven by the underlying quality of our bond portfolio, but by the accounting process according to the IFRS RS-nine, under which we had to update the macroeconomic scenario after COVID-nineteen outbreak. Let's now move to Slide 11. As you can see on the left hand side of the slide, Commercial loans grew by almost 23% year on year with the usual strict control on credit quality. Let me remind you that our lending is offered exclusively to our loyal customer base and our Deep internal IT culture allows us to fully leverage on big data analytics. This translates into a Commercial cost of risk very well under control, decreasing at 10 basis points as of December 2020, In line with our guidance of the cost of risk between 10 basis points 15 basis points, which is confirmed also for 2021, Even considering the present context of COVID-nineteen outbreak, expected losses for mortgages and personal loans remain Very low, thanks to the quality of our lending portfolio. As a confirmation of the letter, we granted only less than 300 requests for Mortgages Moratorium. Let's now move on Slide 13 for a focus on our capital ratios. Fineco confirmed once again a rock solid capital position on the wave of a safe balance sheet. Let me remind you the strong recommendation by ECB and Bank of Italy in December 2020 that provides to refrain from paying dividends to limit the dividend payment until September 2021. Dividends are recommended to remain below the minimum Amount between 15% of cumulated 20 20 profits And 20 basis points of 2020 core Tier 1 ratio. For Fineco, the more stringent condition is the second one, Corresponding to $7,600,000 Therefore, we decided to refrain from distributing dividends Until next indications from the regulators. In any case, our intention is to give back Our excess capital to our shareholders at the first window of opportunity. Please note that 2020 capital ratios consider the allocation of 100% of the 2020 profits to reserves. Common Equity Tier 1 ratio stood at 28.56 percent as of December 2020. Risk weighted assets stood at 3.8 $1,200,000 Let me please highlight that increased risk weighted assets It's partially related to our treasury activity, but this should not be considered as a run rate going forward As we are very confident to deliver on the new industrial initiatives we are introducing to reduce customers' liquidity And they are completely in our hands. Total capital ratio stood at 41.68 percent as of December 2020. On slide 15, as you know, 2020 has made it even clear that Fineco is in the sweet spot for growth As the bank was able to gather €9,300,000,000 net sales with a very strong asset mix. These results was reached thanks to the quality Reaching almost €900,000,000 in January, confirming the solid dynamics seen last year. Let me please spend few years on important development we have observed in 2020 on the recruiting activity That has been historically driven by an aggressive approach by the industry in overpaying financial advisers with huge upfront. Last year, we have experienced a strong increase in the interest of financial advisers to join our bank, Thanks to our business model, which proved to be the best positioned to grow in the new landscape. Indeed, our pool of digital platform allowed our advisers to have no disruption in their relationship with clients and help them to manage their wealth more efficiently. To sum up, FENIC emerged more clearly as the perfect bank for Professionals looking to grow their home business in a sustainable way. And this is the reason why we have recorded a net increase of 65 and personal financial advisers in our network. Let's now skip to slide 21. In this slide, we summarize our guidance for 2021. Net interest income is expected to remain solid and resilient, And we are confirming a decline in the region of $13,000,000 $15,000,000 compared to 20 20. Let me please underline that we are containing the effect of decreasing interest rates, thanks to the smooth run off of our bond portfolio, The positive effect from blending with a new production expected in the region of 1,500,000,000 A more dynamic treasury management through the yield enhancement strategies and the enlargement of the scope of our investments to non European Gavis. The full benefit from the ECB tiering and TLTRO, let me remind you that we joined TLTRO III on December 16 and borrowed the maximum amount available. On top of this, we are launching a new platform for tax Credit towards the state under the eco bonus and super bonus. And this is going to sustain net interest income with no use of capital and on which we will deep dive later. Please note that the guidance does not include the additional contribution we expect from the new initiatives that we will describe later. On investing, we expect revenues increasing high compared to 2020 with margins remaining stable. Brokerage revenues are expected to remain Strong with a flow that is definitely higher than in the past. Banking commissions related to the smart repricing introduced in 2020 Are expecting in the region of $20,000,000 $22,000,000 Moreover, we are also expecting additional revenues In the region of few millions from the new pricing on the new current accounts on which we will deep dive later. Operating costs are expected to grow in a range between 4.5% 5%, mainly due to the increase in the workforce given the acceleration in the growth we are experiencing in the latest months, going forward, we confirm our guidance on declining cost income in the long run, thanks to the scalability of our platform and to the strong operating gearing we have. We expect our core core Tier one ratio to remain above our floor of 17%. Leverage ratio is is expected to remain above 3.5%. Cost of risk is confirmed in a range between 10 basis points and 50 basis points Even in this environment, thanks to our high quality lending book. Finally, we expect a robust and high quality net sales We have a lower component of deposits, thanks to the new initiatives we are undertaking. Let's now move to slide 22. The recent events have generated a gigantic opportunity and have increased the speed At which we are growing as we are benefiting from the acceleration of the structural trends in place. Generally net sales are only the latest Confirmation of this big jump. This is why we are launching a set of new initiatives to take full advantage from the Powerful strengthening of the flight to quality in our direction. Let me now go briefly through the new initiatives. 1st, Thanks to the powerful flight to quality we are experiencing, we can afford to strongly focus our commercial strategy Only on net sales in asset under management through a change in the incentive scheme of our network. 2nd, we will further increase financial planners productivity through new software developments. 3rd, we will improve the quality of our client base, focusing our target market on the upper end. In particularly, We have introduced a new pricing for the new current accounts and we'll be strongly focused in transforming full liquidity Current accounts that have been inactive for an extended period of time. 4th and third party savings accounts Through our platform in order to further reduce the amounts of clients' deposits with us. The second one will allow us to manage tax credits Towards the state. All this set of new initiatives will allow us to be more selective in the growth We are pursuing resulting in a better quality revenues mix coupled with a lower growth of our balance sheet. Let's now go through the details of the initiatives for each business, Ara, starting from the Slide 23. Let's start with banking. Thanks to our high quality balance sheet, low risk investments policy and strong FinTech DNA, we are able to put in place new industrial initiatives to sustain our growth by integrating together treasury initiatives with business actions, we aim to better manage clients' liquidity and offset the headwind Coming from the lower interest rates environment. This confirms once again that Finic is a very agile and fast moving company. Let me spend few words on the most recent ones. First, we will launch a new platform to manage the tax credits towards the state under the eco bonus and super bonus. Thanks to our strong liquidity position, we'll buy tax Credit in order to sustain the net interest income with an interest in yield, no use of capital as the counterparty of The credit is the state. Please note that we can afford to be particularly aggressive on these initiatives as our strong operating leverage allows us To cope with the complexity deriving from the granularity of the single fiscal credit to manage. And thanks to the fact that we hacked as a withholding agent for our customer on their big brokerage volumes. 2nd, we will launch a multi brand platform to distribute third party savings accounts. The results will be a lower amount of clients' liquidity with us And the higher contribution to revenues with no pricing on the new current accounts to better control the flight to quality and be more selective in our client acquisition, focusing our target market on the upper end. Please also note that we have introduced a new termination clause On new current accounts, allowing us to close them is only used to park an excess of liquidity. 4th, we will be more proactive and undertake more actions to transform full liquidity current accounts that have been inactive for an extended period of time. Let's now move on Slide 24. With regard to the investing business going forward, we expect REMS to keep on growing as a result of a combination of strong volume effect Coming from the acceleration of structural trends in place and the resilient margins despite the cautious approach hold by clients. Let me please go through all the details of the new initiatives we are undertaking to strengthen both the volume effect and 1st, as announced, we are changing the incentive scheme of the network, which is now only targeting net sales in assets under management and in solutions with a strong risk management. Since Finnek Asset Management already allow us to have a daily Look through on its solutions, we expect a strong acceleration in direction of its products. 2nd, we will continue on accelerating Financial plan is productivity through new software developments to be more efficient in transforming deposits leveraging on big data This is also going to help us exploit the strong potential of asset held by our customer with other players, mainly in the Private Banking segment. Please note that an important portfolio Portion of our 2020 net sales was the results of private banking clients increasing their share of wallet with us, Thanks to the superior customer experience we delivered. 3rd, Finica Asset Management is confirmed to be key in our move to accelerate the conversion of deposits into asset under management. The penetration of Finic Asset Management Retail class total assets reached 23% of Fineco Bank's total assets under management at the end of 2020. More in-depth, the penetration of Fineco Bank's funds reached 33% compared with 29% on December 20 Going forward, we expect, 1st, a continuous extraction of additional operational efficiency 2nd, the increase in Finnequ Asset Management volume, resulting in a geometrical growth of its margins contribution. 3rd, our Irish company is developing a new product range based on advisory services by third parties, which is going to make The value chain even more efficient. Finally, in 2021, Finica said management will also Widen its product offer by adding new solutions focused on equity and sustainability. Let's now move on to Slide 27. Let's now deep dive on our brokerage initiatives. As you know, our strategy is to progressively increase our ability to extract value from the vertical integration of the business. We have successfully done this In the Asset Management business to our large company and we are now applying the same strategy with the leverage certificates. We will launch our offer in the first half of the year and become issuer, market maker and distributor. This will allow us to convert over time low value flows on other issuers The market size of this product in Italy is relevant equal to $13,000,000,000 in volumes And $100,000,000 of estimated revenues. On top of this, we will also target volumes on leverage ATS and Covert Worrantz. Please note that the vertical integration of the business, coupled with the strong market share And the full control we have of the relationship with clients allow us to be particularly confident on this new initiative. Finally, let me highlight that today, the Board of Directors approved the binding offer for the acquisition of 20% stake on the high NTF venue, which will increase our ability to extract value from the vertical integration on brokerage business, thanks to our clients' strong volumes. Please bear in mind that all these initiatives Underlying how the continuous reshape of our hoofer is a key structural component to explain the increase in the flow of our brokerage revenues. I will now leave the floor to Paolo di Grassia, our Deputy General Manager for an update on the development Thank you, Alessandro, and good afternoon, everybody. Our one stop solution offer in the U. K. Is proving to be very welcome and our The campaign is providing a strong boost to quality client acquisition. As you can see on the left hand side Of the slide since the start of our marketing campaign, we have recorded a strong acceleration in our customer acquisition dynamics And in the quality of our client base, in particular, we last in the last few months. Let me please highlight that in the 2020, we have recorded a stickiness of 90% of our active clients. And this is a confirmation that we are not Attracting hit and run highly speculative and volatile customers, but we are attracting Experienced traders, the lawyer looking for quality offer and the increase in penetration of active clients On brokerage, representing more than 60% on new current accounts, confirming once again That we are targeting the right clients with the right offer. This translates in a boost of our revenues generation. As you can see on the right hand side of the slide, 2020 has marked a turning point in our U. K. Business And resulted in increasing revenues with an improved mix as OTC and listed products are now the lion's share of growth. Together with our huge operating leverage, this is allowing us to be at the operating breakeven, Excluding marketing expenses with the Q1 of 2021. Let me please add that the strong momentum we have So far has further accelerated in January with around 900 new current accounts Hazard in the month compared with 4,800 in 2020. And as of today, February Has already overcome January figures, showing an even faster acceleration in client acquisition. This also translates into a Strong improvement in our revenues generation. On the latter, let me add that in January, we The number of current accounts active on CFTs equal to the one we had in the whole 2020, Confirming the effectiveness of our marketing campaign in improving the cross selling. February is projecting a further record. Thanks to the acceleration of these dynamics, we now expect to reach our first target of 30,000, 35000 good clients Well before the initial time horizon we estimated. Finally, on Slide 31, we sum up the next steps They are getting us closer to the full launch of our investing offering. In particular, the Eyes account is now live and has already recorded an interesting feedback by our clients. While in 20 21, we will continue to progressively enlarge our fund offer with a wide pipeline you can see in the slide. And thank you for your attention. Now I will hand it back to Alessandro. Thank you, Paolo. Let's move on to Slide 33. Sustainability is at the heart of our business model. We were born and have developed as a company Always oriented towards the long term sustainable growth and aiming to generate a positive impact for all our stakeholders and the society as a whole in the long run. To achieve this goal, we have chosen to follow the path of transparency and fair pricing for services offered. And this is in line with our corporate purpose, to offer clients Quality and the multichannel one stop solution with a fair pricing leveraging on 3 strategic pillars: Transparency, efficiency and innovation. This has allowed us to be from the very beginning Perfect in line with an ESG trajectory based on a sustainable long term In parallel with this approach, we have introduced a number of ESG objectives To be achieved by 2023. In 2020, many steps were taken in completing this plan, including our headwinds To 2 important voluntary initiatives of the United Nations, the Global Compact and the Principles for Responsible Banking, while Finic Asset Management signed up to the Principles for Responsible Investing. Let's now move on Slide 34. As a responsible bank, Fineco has continued to develop market friendly Corporate governance and expand its ESG product offering, strengthening the management of ESG aspects in credit and investment products and maintaining a constant focus on cybersecurity and other ESG risks. Moving on to the Slide 35, Fineco is also recognized as a sustainable bank By the major international rating agency, have it been included in the Foot's FETSA for Good Index in July 2020 and in the Bloomberg Gender Equality Index In January 2021, in July 2020, Standardetics improved our rating from Double E To Double Heap Plus, a very strong investment grade given to sustainable companies with low Reputation of risk and strong long term growth prospects. In addition, MCI confirmed our ESG rating in scale ranging from CCC to AAA. Finally, our bank positioned itself As one of the best companies in the world according to risk evaluation by Sustainalytics, obtaining the low Risk rating equal to 18.7 compared to the industry average of 30.3. Thank you for your time. And now we can open the call for to questions. Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Domenico Santoro with HSBC. Please go ahead. Hello. Good afternoon to everybody. Thanks For the presentation, very interesting presentation actually. I understand, I mean, all the initiatives that you are putting in place to redirect this yield to liquidity On your balance sheet into asset management products, which is, of course, the right thing to do, given where rates are going to be and looking also at the way sovereign yields are moving. I just want to understand a bit more the impact on your P and L. 1st of all, Back on your P and L. First of all, thanks for quantifying the impact on NII in 2021. But given that you're ready to incentivize more and more your financial advisers, I'm just wondering how So we look at margins on your products. I mean, you say that they're going to be resilient on asset management, but given that potentially you're going to pay more Financial guidance for the right of course reason. I just wonder how they could move margins. And looking a little bit more forward, especially the way Sovereign Hills are moving, I'm just wondering whether you might accept A bit more pressure on the NII on top of the €13,000,000 €15,000,000 that you just mentioned in order to get some better numbers on the asset management that probably we should factor a bit more of the high teen that you just Mentioned in terms of guidance on the asset management. The other question is on brokerage. I remember that you guided for €50,000,000 more or less per month given the structure of the products, but given that now you are also ready to get more money in the leverage certificates. Can you give us a bit more color in terms of guidance, how much should we consider on top of this €60,000,000 in our model? How much you will get This is €100,000,000 pot of revenues. The other question is capital and dividend. First of all, did you A dividend in 2021 numbers. And then, I mean, the banks are More and more positive in terms of distribution. So probably it's the right moment to talk about what you would like to do in September if things come back to normality and you might use part of your excess capital for dividends For distribute part of it, can you start to give us some color on this? And then tax rate, I see that consensus, it does have a flattish tax rate. So is ignoring completely the patent box And also the way pharma is getting more and more money. So how can you can you give us a guidance on the tax rate for the next 2 years? Thank you. And sorry for the long question. Thanks. Thank you very much for your questions. So let me start from the beginning. So first of all, it's absolutely very important the point you raised on liquidity because it's clear that The net interest income is the final recipient of everything we are doing. And so we think that one of the usually something that sometimes is a little bit misleading in terms of approach Is to think to net interest income as a standalone component of the bank And because it's clear that if you keep this as a standalone component, it's not it's quite evident that the continuous runoff of the portfolio is Bringing down the net interest income. But at the same time, clearly, there is a strong impact that is going to be caused by everything we are doing. Clearly, the guidance we gave on the asset under management remains to some extent cautious because we are not still because I want to be extremely fair and transparent. The speed at which the bank is growing over the last few months is really huge And this month by month taking us by surprise. But before in embedding this have come in strict guidance. We prefer to be absolutely 100% sure that this is really solid. But it's clear that the progression we are observing in terms of increase of the productivity of our Financial plans in moving into Acetadirmeci is really big. At the same time also, it's like to say that the bank has changed the Dimension. So, it's we have entered in a completely new dimension. And so, clearly, it's clear that the more we are accelerating in asset under management direction and the more this is going to have a double effect increasing further The revenues expected into investing, but at the same time reducing the headwind on the net interest income Because the less liquidity we have to invest and the less we have to invest in the 0 yielding bond, for example. And so clearly, this is very important to keep in mind. On the Regarding the incentives to the financial plans, the new incentive scheme is based on the concept that we are focusing our network just on asset under management, but for a very simple reason, Because the net inflows, the growth is so strong, so incredibly strong that we don't need to incentivize them Forgetting new clients and assets because they are coming. And so that we can concentrate our financial planners just in moving clients into the asset under management products. It's clear that, For example, if we look to the numbers we are the numbers on assets under management over the last You must clearly, the progression is clearly high respect to what we are embedding in the guidance. But as I was saying, we prefer to maintain a cautious approach before embedding in the guidance something that is building up. And so the point is that the more we are accelerating in direction of asset under management And the batteries for investing revenues, but is also good for net interest income as well. So it's not Something that is penalizing the other. And I would like to remind also that just Underlying the importance, for example, of the how the bank is so very well positioned for buying fiscal credits, because Pinnacle differently from other banks, we are extremely profitable. Our profitability is absolutely Stable and continuously rising. So we have no volatility in our profitability. And definitely for the other banks, We have the huge advantage that we are running the largest brokerage platform in Italy. And based on the Fiscal Italian system, we are paying in substitution of our clients There are capital gains. And so we have an additional ammunition in order to buy fiscal credit. So really That we and coupled together with our capability to manage granular business, this is generating an absolutely Great opportunity. And finally, I would like to underline that we are going to launch practically a new asset class That is comparable to assets under management, because the new platform in which we are providing to our clients Temp deposits of other high quality banks is not different from an asset under management product. And this again we expect Definitely an absolutely very, very high contribution. So personally my personal expectation that probably going through next year, the headwind represented by net interest income is going to be completely offset and probably I don't want to be too optimistic, but I I have some aspiration to reverse this decline in net interest income. Thanks to the combination of these actions we are taking. On leverage certificates, it's we have not too much to head. It's a market that at the moment is generating more than €100,000,000 of revenues. At the moment, we are getting by leverage certificates something that is the region of 2,000,000. Our market share on retail brokerage is above 50%. I'm not saying that we're going to get A 50% market share on leverage certificates because clearly it's too much, but you can imagine that there is A quite wide room for getting additional commission by from this business. On capital and dividend, we can confirm what we probably regarding the point on the accrual of dividend 2021 numbers. I don't know Lorena, Our CFO, Lorena, can you give some more color on this point, some more details, please? So we have not decided yet the amount So dividend that we will be able to distribute in 2021, as already said by Alessandro, we will distribute our excess of capital. So the point is that we think that the right approach To keep is to wait for the final conclusions. I'm totally with you that there is a very high probability That by September 2021, the rules related to the dividends paid, that's going to be Absolutely relaxed and our goal is to give back to the market everything that is in Sales of capital we are building up. On the tax rate, this year the tax rate has remained flat, but mostly driven by the fact that the quite large growth in brokerage, this has increased the amount of revenues generated in Italy And this has contributed in maintaining the tax rate flat. We expect that going Forward probably, our tax rate is going to start on keeping on declining. But again, Lorena, if you want to give us some more details on the possible evolution of the tax rate, please? So we expect in 2021 a slightly decline Given the expected growth of the contribution by Finney Cross Asset Management to the consolidated income, Please bear in mind that the precise contribution of this effect will depend on the relative weight to the consolidated income of both Fineco Asset Management and Fineco Bank. Also based on the success of the new initiative on transformation liquidity into assets under management that we have introduced in our market presentation. And regarding Patent Box, as you know, we have obtained the renewal the confirmation of the renewal by Italian Tax Revenue Agency regarding the software for the period 2020 2024. So we don't expect Changes also in the methodology used for calculating the positive contribution of So we expect a linearity in the going forward. Can I ask you just a follow-up question on the unrealized gains that you have in the sovereign portfolio at the moment? It's in the region of €1,000,000,000 They are not in the capital. All right. Okay. Thanks. The next question is from Antora Guevci with Citi. Please go ahead. Hi, good afternoon. A Couple of questions. Just coming back to the dividend point, would you expect or would you aim to do a distribution in the Q4 of this year, if the rule has relaxed in September or is it something that Inveso will need to wait for the dividend of 2021? And if you can just explain to us why you decided not to pay even a small dividend for this year? Is it logistic or is it if you can just I'll spend a couple of seconds on that. The second question is on your ESG. Thank you for the additional information. It's just a question about What are your main focus in the next few months on developing your ESG strategy? And how do you control these at in terms of governance and at board level. And the last question is on your U. K. Business. You are expecting to expand the product range in the Q1 and also with the launch of the ISA product. And would you expect These 2 have an increase in terms of number of customer interacting with you or more in terms of increased to set the wallet of this existing customer because you offer one of the key product in the UK. Thank you. Yes. Thank you. So regarding dividend, clearly, as soon as it's going to be possible, we are going to distribute dividend. So, if there is a wind of opportunity in the 4Q, we are going to consider to pay dividend to our shareholder. And the reason why we decided Not paying any dividend is exactly what you were raising because €7,000,000 of dividend practically is nothing And it was much more the administrative complexity to go in that direction. So we prefer To wait because again, unfortunately for banks like Fineco, the regulation is extremely penalizing because probably the regulators, they are not considering that there are banks like asset caters in the arena. And so we have been that is quite counterintuitive because it has been allowed to pay more dividend to banks that they are exposed to higher risk Unless 2 banks that are exposed to less risk, but we are living in a regulated world and so we have to accept the reals. On the ESG main focus in the next few months, I'm going to leave again the floor to our CFO. So please, Lorraine, if you want to give some more color on the next future steps And on that direction, please. Yes. Thank you. So we have defined a set of ESG goals that are explained in our nonfinancial statement. We will publish our non financial statements in the next Wicks. And these main goals are related to 6 areas: Human Resources, a responsible finance, financial education, supply chain, relation with shareholders and the environment. We have worked on set up a corporate governance, Appointment and Sustainability Committee that have approved this first step of The first set of sustainability goals for the period 2020 2023, And we periodically monitor these goals inside the bank and with the approval by the Sustainability Committee. On the growth in U. K, Paolo, if you want to give more details regarding what we expect to get going forward. Thank you. Yes. Hi, Azura. Yes, basically, In U. K, we still have a few clients because we have 11,000 clients right now. So we need to increase our customer base, of course. But we also need to get the right clients who want. I mean, we don't need to get on board Millions of clients, they were nothing. We had to get on board clients. They can create value for us. And so I would say we will measure the U. K. Business, of course, mainly on the increase of asset. Share of wallet, it's a Few things for now. And so we need to focus on acquiring more clients by the good quality client. The next question is from Enrico Bozzoni with Credit Suisse. Please go ahead. Hi, good afternoon. Thanks for the presentation. I have a couple of questions. So one, on your new Form 2 basically provide a 3rd party deposit to your customers. So it sounds very interesting. It's actually something that various player do In the U. K, I have 2 questions related. 1, which kind of margin would you expect to make on such deposits? And the second is, How would you balance the possible risk, if any, you think that suddenly some of your clients would prefer to choose these Products rather than actually going into AUM product. My second question is regarding the UK. So previously you gave some guidance in terms of extra marketing expenses. Now, so you have a new guidance for the year of between 4 For an odd percent in cost growth, does this means that we should not expect any sharp increase in marketing expenses in the UK this year? And related to that, a key date in the UK is the 5th April because the fiscal year when people Basically, you need to put money into their Aiza. What should we expect in terms of actually marketing campaign for the Aiza account? Seems to me that So far, there's a lot of push on the broking account, but in a way almost feels that Now could be the perfect timing to actually get also a lot of clients that would like to open an ISA type of account. Last Question please on the acquisition of HIMTS. Can you just give some further clarity in terms of you say you can Struct more value practically what that would mean, what that would imply. Thank you very much. Thank you. So, let me start from the first question. So, you're totally right. So, we What we are preparing to do here in Italy is quite similar to what is, for example, is done in the UK. In terms of clearly from a certain point of view, there is not such a great difference Between an asset under management solution And the term deposit, and this is the way we are trading. Just the banks that we are That are going to be used for cooperating with KKR. Thanks that they are absolutely Not in collision with our business model because they are doing they have a completely different business model. And so they are They have no interest in managing their clients' assets. 2nd, the concept is that Fineco is you have to look to Fineco that is going to become more and more less and less a bank and more and more a platform, A platform enabling the clients to reach their goals. And so clearly, We see exactly the contrary, because the clear in time deposits are remaining an interesting product for Italian clients. What is making them sometimes reluctant is that their approach is not User friendly. So as usual, Fenech is going to create a platform that is going to be currently with our DNA absolutely smooth, incredibly easy to use. 2nd, we are going to be We are going to act exactly like we are acting on the asset investing platform as a kind of filter. So providing to our clients just exclusively banks that we consider absolutely best in class And absolutely solid and sound. If you put everything together, clearly, there is absolutely for us, it's going to be different. And so to have the clients Buying and I don't know a money market fund or an attempt deposits probably in terms of margins for us it's going to be better the second one because the margins probably we are going to stay in the region of between 10 20 basis points. And so this clearly is this is a quite a big change respect to the fact that the liquidity on the marginal way is going to be negative for the bank. So to move in a direction which liquidity is going to become something that is absolutely at the same level of an asset under management Product in terms of impact on the balance sheet and profitability, we think that it's an absolutely fascinating Direction and again is confirming that the real strength of Fineco is the concept that Fineco is a platform Making possible for our clients to fulfill their goals. On U. K, again, Paolo, if you want to elaborate a little bit more in terms of guidance, in terms of marketing And also on the ISA campaign, please, Paolo. Yes. Basically, we don't right now, we are planning to spend pretty much the same we spend in 2020. But of course, we are open to To increase our budget, if we see that there is a strong acceleration, there is a need to improve Spending to increase the spending. So right now, the forecast is about €6,500,000 But again, we are ready to increase the budget during the year. On the Actually, also I have to say that the campaign, the money we spent in 2020 are paying off very well because We're starting to acquire a very good number of clients. As we said in the presentation before, in January, we had a very Strong acceleration in February is even better than January. So it seems that we spend very well the money and so we don't need To put in the place more money for now that this is the situation. So and On the ICE account, yes, we are ready. We have already testing with friends and family. We have a couple of Hundreds of clients already using the ICE accounts and we're ready to open to the old customer base. And we have in mind to launch a campaign on the Aiza. Mainly, we probably will launch the promotion Giving rewards to the clients that will transfer funds in and use the eyes account, but also we were going to spend money On dedicated advertising, eyes are dedicated advertising. So this is pretty much the plan. Jumping to the question on the IMTF out of stock value. So the concept is pretty simple because Fineco, we have to remind that is a market in the market at the moment because We are in control just on the regarding the Italian market. We control 27.8% of the total volumes in this is considered also the institutional volumes despite the fact that Fineco is probably, you know, is not involved in any institutional business, so clearly is by far the largest player in the market. And the possibility to have an alternative venue means that we can be much more flexible In terms of new products to bring to the market, listed products, for example. And also, we can Also looking forward to become more efficient in the volumes management. But this, for example, if you look to the some other markets present in Germany. Germany is a market in which is The alternative values to Deutsche Borse are the common rules. For example, in Germany, we are Cooperating quite a lot with, for example, with Equidact, that is an alternative venues and so on. And so clearly, In we've been entering in these new venues is going to bring It's going to give us the possibility to become even more flexible and agile in launching new products and also To be able to extract more value from our clients' volumes and Because for sure the Fineco is going to bring quite a lot of contribution of this market considering the dimension of that we have. Thank you. It's very helpful. The next question is from Angeliki Bayraktar with Autonomous Research. Please go ahead. Good afternoon. Thanks for taking my questions. Can I ask a couple of follow ups? First of all, with regards to the 3rd party savings accounts that you will be offering, will this be from Italian banks only or also any other for BN Bank. And what do you expect to be the headline remuneration of those time deposits? Considering that you mentioned around 10 to 20 bps that you will earn on those, I would imagine that the headline remuneration for the And will there be an automatic switch from one provider And that's my first question. And then second question on brokers. Could you give us a number of the percentage of the volumes that you have internalized in 2020 versus executed in exchanges. And then I noticed in your presentation, in your guidance for loans. That you are now guiding for much lower yields on new loan originations, especially in mortgages and personal loans in 2021 relative The guidance that you had given in 2020, is that attributed only to lower benchmark yields? Or do you also see price competition in Italy? Thank you very much. Thank you. So, at the beginning, we are going to use we are going to cooperate with Italian banks. In a second phase, clearly, it's going to be enlarged also to other European banks. And in terms of yield, in case it's At the moment, I don't know, Paolo, which is where is the market right now for Depends on the maturity of these deposits, but they're ranging probably between 50 basis points and 100 basis points depends on the length. Yes. Yes. So this is more or less is what you can expect that it's going to be received by the clients. We are going to when we are referring to a great customer This means that for a Finneco client, it's going to be possible to switch automatically from the Current account to these deposits in a very easy way, so just pushing the bottom. So this is the way we are used to work. No, we are not planning to make a switch from a deposit to another because in many cases, we don't think that We need to do that. So, but again, in terms of approach, it's not going to be too different from the same Approach we are providing for our clients with our investing platform, because again, the term deposit is not Such a great difference with an asset under management product. On the internalized volumes, 2020 versus executed In exchange, I don't know if Paolo or Lorena, if some of you has the number, otherwise we have to return I don't know Pablo. Yes, I have it. I have it. It's in the range of 25%, 30%. And yes, it's pretty much stable. Regarding the lower yield on mortgages and so on, it's not due to the price competition, but is just related to the dynamics of interest rates because clearly as you can imagine, we are now the largest party is transforming in variable rates because clearly we don't want to run An unbalanced position on the asset and liabilities management side. So clearly, the most part of the for example, the mortgages production is practically transformed In the variable rates and so the declining yield has been mostly driven by the continuously declining interest rates. Thank you. If I may just follow-up on the internalization of volumes. Is there do you think there is a possibility For that to increase as you get more active clients? Or do you think it's very difficult to increase that Due to technical reasons as the orders are very diverse. No. We think that the more The business is growing and the higher is the opportunity to internalize clients' orders. In fact, Fineco is in a quite sweet position because the combination of Large volumes and the granularity of the volumes, the quality of the clients, because in order to be Successfully internalizing clients' orders, you need to add the combination of huge volumes and high quality volumes. And so clearly, Yes, definitely, we have the possibility to increase even more the component we are internalizing. Thank you. The next question is from Elena Perini with Intesa Sanpaolo. Please go ahead. Yes. Good afternoon and thank you for your presentation. I've got actually two questions. The first one is, I know that it is not easy to answer, but On a potential run rate for the brokerage revenues for the current year, I was wondering whether A level around €50,000,000 per quarter like in the Q4 of 2020 could be considered as a possible one. Also taking into account that you are going to launch new initiatives like The leverage certificate and so on. And second question is on operating costs. Just a clarification. The guidance of the growth that you gave in the presentation Takes the full year 2020 level including the U. K. Costs as a starting point. Thank you very much. As usual to give a precise guidance on the run rate on brokerage is always extremely complex because as you know very well, the brokerage by definition is Characterized by companies that they are not completely predictable like the volatility of the market and so on. But assuming and if you look to the for example, because last year has been characterized By the Q1 that has been clearly incredibly volatile. So clearly, you cannot use particularly some of these months as an example of the run rate because we cannot rule out to enter in same level of volatility also this year, but it's we think that the probability is low. At the same time, we had the 3rd and the 4th quarter that has been much more normal because characterized by an absolutely decent volatility, but not so incredible like we had in the second quarter. And so clearly, If you look to the second and the third quarter, it's something that my opinion is something that it's not so completely irrational to look at. It's clear that a word of cautiousness it's mandatory because as I was saying, there are components that we are not controlling because It's not just the volatility of the market, but for example, the volumes, because frequently there is a tendency in just looking to the VIX. But the VIX is just one component because if I have the VIX is telling to me how frequently the market is changing direction. But what is even more important is the volumes that we have on the market. But in any case, so I think that the 3rd and the 4th quarter has been a good quarter for brokers, but not Such as incredible as has been the Q2. And so looking to that quarter, my opinion is not something that could be used As an interesting observation point. On the operating cost, I'm just Asking to Lorena to confirm that the guidance we are giving is including the U. K. Cost as a starting point. Am I right, Lorena? Yes, yes. It includes U. K. Cost. Yes. Okay. Thank you very much. The next question is from Alberto Villa with Intermonte. Please go ahead. Hi, good afternoon and congratulations for the results. I have a few questions from my side. The first one is back on the U. K, if you can provide us with the revenues generated in 2020 and If you have a target for 2021 in terms of revenues and again on foreign operations, you were Moving into other countries, Germany, France, I was wondering if you, Alessandro, can you give us an idea of what The state of the art on those plans and if there is something more you can add on your plans to enter these markets. The other question is on the repricing on the new accounts. Do you believe this will Refrain some growth of customers or the impact will be minimal on that side. And then finally, back again, sorry, on dividends. You mentioned Shunned many times about the fact that you will distribute the excess capital as soon as you can. I was wondering what we should consider as excess capital, you now have a HIFO ratio of 28% and a target of being above 17 Thanks. So I was wondering what we should consider as, let's say, a normal dividend policy See after what has happened recently, so in the future, and what would be the sale excess On U. K, and then before leaving also To Paolo to add some more comments. On U. K, it's a little bit difficult to give a Target for 2021 for the very simple reason because the acceleration of the business UK has been quite sharp Of the last couple of months. And so we now we are clearly because U. K. Is a market that different from Italy is an extremely is Italy is a little bit more is a little bit slower reacting when you are bringing something that And U. K. Is an extremely rational market. And so clearly, the acceleration is Quite important. And so practically, we are entering in a brand new dimension. So to give you a Precise guidance before we have to understand exactly the new dimension in which we are entering. I don't know, Paolo, if you want to add some few comments on this point. Yes. Yes, I agree with you, Alessandro. It's our total focus right now is We're just spending the right way our money and get the as I said before, quality clients. And And the offer is very well it's positioned very well. We are acquiring clients. They're coming to us For listed products and then they cross we can cross sell them to OTC products and the circle is working very well in these So it's probably too early to talk about revenues, but I think that we are very positive in the next few months to give you a more precise guidance. On expansion abroad, clearly, we our plan we are taking our time. Our plan is pretty clear. We want to have the U. K. Perfectly up and running. So to be sure that is definitely going very well and later on we are going To start on planning the entrance in another country. But at the moment, it's too early to give a precise indication on which country and with Switch timing. On the repricing on the new accounts, the point is exactly the opposite, because The reason why we introduced this repricing because the pressure we are experiencing in terms of New business that is coming to us is so big that clearly we there is a very clear imbalance between Demand and offer because it's really huge, but in any case, if you look to our numbers in January, so because together Nearly €900,000,000 in January that typically is a slow month that characterized by quite heavy that seasonality is the demonstration. And February as well is progressing in a pretty strong way. Last by the way, A few days ago, we recorded the brand new record in client acquisition in one single day. So nearly 1500 new clients in one single day. That is absolutely huge considering that we don't have any marketing campaign in place. We are not offering interest rates and so they are just clients coming to us through the weighted miles. And for this reason, we clearly, the decision to move in that direction is a decision in order To keep this growth in the right direction because we want to keep we want to be sure that we are taking on board exactly The kind of clients we want to take on board. In any case, with the new price we introduced, Fineco is going to remain in terms of ISKEL that is The way the Bank of Italy is calculating the expensiveness of a current account is going to remain one of the most convenient bank. But clearly, It was absolutely necessary to introduce this new repricing because the pressure we are having in terms of New clients and assets is so big that clearly it's the right move. So absolutely, we are not We are not concerned regarding this point. I don't know, Paolo, also on this point, if you want to because we discussed a lot on this point. And Sonu, what do you expect? Yes, we were talking this morning about this, and I I don't see any impact on the acquisition. I mean, the acquisition is so strong that I think this is just the right pricing to put in place. And so even looking at the fresh number In the last days, the repricing didn't have an impact on the acquisition at all. So I don't see any impact. As I was saying at the beginning, the bank has entered in a new dimension. It's likely that we've changed our scale. So now we are respect just 12 months ago, practically we are entering in a completely new dimension. And so we have to react accordingly because our goal is not to get on board the highest Number of possible clients, but the highest possible number of good and profitable clients. And regarding dividends, we are confirming what we were saying. We think that considering that we are still in an extremely In extremely volatile environment and with the regulate because at the moment, the only everything that we are discussing about is based on rumors. We didn't have any single official Statements made by the regulators. So, we think that it's definitely too early to make such a kind of a call. Again, we are going to judge based on the existing scenario when the regulators are going to be clearer on that point. And clearly, we our goal is to get is to give back to the markets The maximum amount of excess capital we are building up because we have no interest in keeping An amount of capital that is in excess respect what we need. Yes. It's just yes, I understand obviously your point on the regulator and that's Perfectly understand. But for example, just to give you an idea clearly, probably if you what we are putting in place in terms of So there is and we expect a strong acceleration in the productivity of financial plans. So there we probably It's possible that the progression in asset under management is going to be stronger than we were initially expecting. 2nd, we are putting in place initiatives that are going to be, in our opinion, extremely effective in moving clients out of liquidity. I'm thinking about the new platform, but also the initiatives in order to keep to put us in the position to be much More vocal in getting rid of clients that they are characterized by just sitting on huge amount of liquidity without doing anything else. So clearly, the more we are going to be successful in that direction and clearly the more this is going to slow down the balance sheet of the bank, the growth of the balance sheet also is slimming down the balance sheet. And clearly, the more we are affecting and the more aggressive we can Come also on the dividend side. So clearly, this is the reason why we cannot be so 100% precise. 1st, because the landscape is completely still uncertain. So it's we think that it's Is there a risk to waste time in discussing about something that has not been decided yet? And second, that the bank is in the process of a very strong acceleration, both in terms of growth, but particularly also in terms of the new initiatives we are putting in place. Okay. Now I was wondering if you can just let me understand what is the excess capital in your view that the company has. It's the difference between the Czech1 ratio and the target you have in mind or it's something different? The target we are giving on a core Tier one ratio is a first indication, so clearly in 70 because we our goal is not to be the bank with the highest core Tier one ratio. Our goal is to be a bank with a clearly Above the average quarterly ratio in order to make our clients and shareholders extremely comfortable Regarding the robustness of the bank. Okay. Thank you very much. The next question is from Filippo Primi with Kepler. Please go ahead. Yes, good afternoon. One brief question, if I may. Getting For a second on your plan to buy tax credit for work renovation. But is it correct that there is a maximum amount of credit That you can buy that is equal more or less to what you paid in taxes in Italy? Thank you. No, it's not perfect. It's not exactly this way because as I was explaining, The Fineco is in an extremely comfortable position. So because What we could the maximum amount we can buy is determined for sure by the Profitability of the bank, the tax that we are paying, but also the reason a very important component is represented by The tax we are paying on behalf of our clients. And so the big advantage we had that Fineco is by far the largest Brokerage platform in Italy. And so as you can imagine, every year we have quite a lot of Capital gain that we are paying on behalf of our clients and also this can be used for to be compensated With the tax credit we are buying. And on top of that also Lorena, because the CFO is for sure more Can be more precise than me on this point, Lorena. No, I can confirm, Alessandro, what you already said. So we have a role of withholding agent for our customers. And for this, for example, capital gain paid by our customers. And it's for this reason that we have a tax capacity that is huge compared with other competitors, for example. And also coming back to the profitability, clearly, probably you can as you can understand quite easily is that considering the business model of the bank that is characterized to be extremely low risk, Stable, predictable. Clearly, we have a lot of visibility on because when you are buying Tax credit, you need to have also visibility on your future profitability generation. And clearly, the visibility of the profitability future profitability generation is much greater for a bank like Fineco Considering the business model we have, on top of that, clearly, there is the huge advantage we have related to the brokerage platform that is giving to us a quite big additional pot that we can use for buying tax Great. Okay. Many thanks for the explanation. The next question is from Federico Braga with UBS. Please go ahead. Yes. Hello. Good afternoon, everyone. I have a few questions left to follow-up, Please. The first one relates to the 3rd party bank accounts. Again, just some clarification, will this be offered to all clients Or just to maybe last one for your mobile phone just to have an idea. And also with regards to these products, what's the risk there actually you will see maybe some cannibalization or attrition with higher margin AUM products given the fact that these type of products tend to be Pretty successful in Italy, given the high risk aversion of the average Italian clients. The second question is on the brokerage. You showed in the slides how the average new client of brokerage is actually a pretty wealthy individual, followed by financial advisers. I just wanted to know what has been the feedback from your financial advisers in the last few months in terms of seeing the broker Is there competition to them or what has been the morale and the feedback with disrespect from your Financial Advisors. And then the last question on the U. K. Business. Just what level Of AUMs per client would you consider successful like, let's say, in 5 years down the road with regards to the file platform business Thank you very much. Thank you, Federico. So regarding the 3rd party bank's accounts, There will be offer to all the clients with no distinction. So regarding the cannibalization risk, honestly speaking, Absolutely incredible amount of liquidity, still the reason the current accounts to clients, this honestly speaking it's not a risk. So clearly, the reward that we can get bringing This new solution is so huge and so big that clearly absolutely there is no risk. And in any case, they are going to With the very low risk risky products we are providing For our clients and in this case, in terms of profitability, the difference is not going to be So, such is great. So, clearly, no, absolutely, there is the opportunity we have is much greater than Then the cannibalization risk on the asset under management products because again we then for us the more we are able to move to eliminate the liquidity of our clients and this has 3 extremely positive effects. 1, that is increasing our fees. 2nd, is contributing In improving our net interest income. 3rd is making our balance sheet light. So it's absolutely the advantages are definitely much higher than the possible small collateral risk. On the Bruker side, no, but this is a problem that we had very many years ago, at the very early beginning when we started on putting together Financial plan is with the brokerage platforms, the immediate reaction by the financial plan is we was, come on, we are Competing with us now. They realize that the brokerage is an incredibly powerful way for Getting onboard new clients and also creating a much better relationship with them because as we were describing over the last few months, there is a very evident trends in place that It's a kind of contamination and overlapping between the brokerage world and investing world, but they're not co leading. So the same clients Absolutely perfectly aware and confident that for a long term planning that use the financial plans, but at the same time they are Extremely interested in getting a direct interaction with the market. And now financial planners Are not against brokerage, it's exactly the contrary. They consider brokerage as an excellent additional weapon that they have In order to make their clients even stickier. On the U. K, I don't know, Paolo, if you want to make some few comments On the level of asset under manageable clients, I don't know. But probably it's a little bit too early to Yes. It's probably too early, but you know that we are targeting in the U. K. People with more than 100,000 to invest, So from 100,000 above. And so definitely our offerings aim to people that they have assets. We're not interested in kick and run small clients. So it's too early to think about To speak to talk about the level of yen, but the target is the one I just told you. Thank you very much. Mr. Foti, there are no more questions registered at this time. Thank you. Thank you very much for attending our conference and for your extremely interesting questions. As usual then For everybody of you that interested in follow-up, we are here for arranging meetings and digging a little bit more in the Numbers and concepts. Thank you again. Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your