Banca Monte dei Paschi di Siena SpA
MIL:BMPS
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Banca Monte dei Paschi di Siena SpA
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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the MPS Group Second Quarter and First Half 2021 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Guido Bastianini, Chief Executive Officer and General Manager of MPS. Please go ahead, sir.
Good afternoon, everybody, and thank you for joining Monte dei Paschi di Siena First Half 2021 Earnings Call. I'm here with Giuseppe Sica, our Group CFO. Before we begin, let me say upfront that Monte dei Paschi di Siena and UniCredit have now signed a confidentiality agreement, allowing UniCredit to process MPS arm. We are not in a position to answer any questions regarding the potential deal. I'm certain that you will understand.
So we will start, as always, with the key highlights on Slide 2. Monte dei Paschi commercial machine continues to accelerate. Wealth Management growing inflows are 50% above the pre-COVID levels. Net inflows for the first 6 months are 3x last year's total net inflows. New lending is healthily moving beyond the set guaranteed loans with ordinary lending, mostly secured, steadily increasing and the cost of funding is further reduced, mainly thanks to the progressive deleveraging of time deposits and the gradual introduction of liquidity commission on certain large corporates.
Regarding asset quality, this remains under strict control. Residual loans, subject to moratorium, down to quarter compared to 1 year ago with the full rates well below provisioning levels. State-backed loans reached EUR 10 billion or 14 of our total loan book. Together with the organic secured loans, this remains a strong driver to ensure that our cost of risk stays under control. The stock of NPE is stable since December 2020, once adjusted for the impact of the new definition of default. Gross NPE ratio at 4.5% is one of the lowest in Italy.
A few words on capital. Transitional CET1 ratio is at 12.1%, the same level of December of 2020, notwithstanding 1 percentage point regulatory headwinds. CET1 fully loaded has increased 70 bps since December '20. The regulatory capital shortfall expected for the first half of 2022 is further reduced from an initial EUR 1.5 billion projected last November to about EUR 1 billion projected in May to less than EUR 0.5 billion now.
This result has been achieved, thanks to significantly better-than-expected commercial performance and 2 capital managed actions implemented over the last few months. I would like to highlight once again that no shortfall is expected on CET1 and that the shortfall, if any, is within the capital conservation buffer.
Few words regarding the stress test. The outcome of the exercise is consistent as we have stated in our press release with the capital plan submitted to ECB. Giuseppe will provide more details on this. Finally, our Board approved today the agreement with the Fondazione MPS for the settlement of EUR 3.8 billion claims. This means a reduction of the petitum of about 40%.
Slide 3, turning to financial figures for the first half 2021. The first semester closed with a pre-provision profit of EUR 491 million with net interest income, excluding interest from NPEs flat year-on-year and up 9.3% quarter-on-quarter. Fees up by almost 9% year-on-year, the best result in 3 years, boosted by commercial momentum, both in wealth management and traditional banking activities.
Costs remain under strict control with clear potential for further reduction. With our COVID risk program are now completed, our cost of risk is 41 bps, including 13 coming from model changes and 9 bps of management overlay. We have reached, despite our decision not yet to reverse around the EUR 300 million COVID derivative provisions booked in 2020.
Net operating result is positive for EUR 327 million, the best in 10 semesters, with a net income of EUR 202 million for the first half for return on tangible equity of 7%. In the lower part of the slide, I've already talked about capital and asset quality. So towards on liquidity. We continue our effort to use excess liquidity and manage its cost.
And now Slide 4, we show some details on the most relevant commercial achievements for the first half of 2021. As I said earlier, wealth management inflows, both gross and net, are showing more vitality than they ever did in recent years, bringing a 22% year increase in wealth management fees, and this despite the persisting COVID-19 restrictions on branch activity.
As for new lending, on the right-hand side of the slide, you can see how the relative share or state-backed lending is progressively decreasing in favor of ordinary lending, which is 90% secured. We are therefore successfully transitioning from public support measures to ordinary lending, while preserving the quality of our assets.
Slide 5. As mentioned earlier, NII has started to show the benefits of management actions. We continue to deleverage expensive time deposits, as you can see from the evolution of our market share. At the same time, we are renegotiating conditions on the largest corporate deposits of noncore clients. As you can see, cost of our deposits is still 11 basis points above the industry average, so there is still room for improvement. All of our deposits with limited exception on Widiba are now at 0%.
And now some words regarding with Widiba. Widiba continues its solid growth across the board with double-digit increase in wealth management flows and a number of online transactions in line with its new definition. Its trade mark focus on innovation allowed Widiba to win the Italian Banca Innovation Award in digital transformation for the fifth time in 7 years.
Slide 7. As mentioned, COVID-related moratoria are now at about EUR 4 billion, down 74% since June 2020. The riskiest part of the moratoria has been included in our cash program and about 50% of the total has been classified as Stage 2 with a coverage above 5%, significantly higher than the 1.2% observed the full rate on state moratoria. State guaranteed loans have continued to increase, although at a slower rate. We continue to support our clients and to protect the lower cost of risk for the bank.
On the right-hand side of the slide, you find an update of our Crash Program, which we launched in March and now completed to identify and manage pandemic-related loans with aim to avoid the potential and now unlikely is effective. By now, the entire EUR 12.8 billion portfolio, 90% is corporate, has been reviewed and discussed with clients with all the marginal portion migrated to the first.
Now Slide 8 with some more focus on asset quality. Our cost Hydra NPE stock is slightly down versus December, adjusting for the impact of the introduction of the new definition of default. In the right-hand side of the slide, you can see the breakdown of our nonperforming portfolio. 60% of our EUR 4.2 billion gross NPE stock is composed of TCs, of which about half with a very low vintage. [ 58% ] of our NPEs are classified as the loans of which 60% are secured. As you can see, coverage of both secured and unsecured bad loans continues to be conservative.
On Slide 9, our capital position. Transitional CET1 and Tier 1 ratios are stable versus December 2020 at 12.1%, thanks to a net profit generated in the first half of the year that offset the RWA increase for model changes and IFRS 9 FTA phasing impacts. Thanks to better-than-expected commercial performance, management capital actions and which Giuseppe will discuss later. We succeeded in reducing the first half 2022 capital shortfall to less than EUR 0.5 billion, if any. I repeat once again the shortfall is not the CET1 level and is within the capital conservation buffer.
Before I leave the floor to Giuseppe, on Slide 10, a few words on ESG with a short-term concrete action plan. We see the Italian national recovery and resilience plan has enabled to continue unlocking the ESG potential of the bank. As you know, the 3 strategic pillars of the current recovery and resilience plan are digitalization and innovation, ecological transition and social inclusion. So it is only natural that ESG teams prevailed in the initiatives. Monte Paschi has identified 34 priority actions in 2021 and already activated the network of specialized consultants who will help our clients take advantage of the opportunities offered by the recovery and the resilience plan.
We see better business for our clients and more and better business for the bank. In short, Montepaschi has every intention to take advantage of this unique opportunity to accelerate the achievement of the ambitious goals set out by the principles for sustainable banking, of which we are founding signatories and to contribute to advance the environmental, social and governance agenda of society as a whole.
And now I leave the floor to Giuseppe for more details on the first half results. Giuseppe?
Thank you, Guido. Now move to the more boring numerical part of the presentation.
As customary, let me start on Slide 12 with an overview of our first half results in comparison to both first half 2020 and first half 2019, the last not affected by COVID. As you can see, P&L showed improvement despite ongoing lockdowns in 2021 and despite some misperception. Revenues adjusting for interest on nonperforming exposures are increasing. Costs show a downward trend despite the impossibility at the moment to affect further restructuring.
Net operating result is circa 2x first half 2019 figure and at a level not seen for some time. The improvement has been reached also thanks to a strong derisking of balance sheet and, therefore, to a much lower cost of risk. NPE ratio is 1/4 of 2019 level. Texas ratio just above 50%. The disposal of NPEs to AMCO discussed around 140 basis points of capital and explains most, if not all, of the reduction in CET1 ratio. Hydra was implemented to derisk the bank in a post-COVID world and prepare it for a structural solution.
Moving now on to 2Q results on Slide 13. I will start, as always, with a quick overview of our P&L and then move on to the details. First, and I know that you have a lot of focus on this, net interest income is up almost 10% quarter-on-quarter, mainly thanks to ongoing actions on deposits. Net interest income is above Q2 2020 level, adjusting for NPE disposal. Fees and commissions are also up despite the cost of securitizations.
In fact, 2Q 2021 has been the best quarter in the last 3 years. Operating costs continue to be under strict control despite the lack of negotiations with unions, given the focus on the structural solution. Cost of risk is at 41 basis points for the first half despite increased conservative provisioning level on performing loans, model updates and no release debt of COVID-related provisions. More on this later.
Net operating result is EUR 124 million, normalizing for the effect of circa EUR 50 million one-off cost of risk related to model changes. Net operating result would be close to about EUR 175 million. Net income for the quarter is EUR 83 million.
Now on to Slide 14, net interest income. Net interest income is up over 9% quarter-on-quarter. The increase is due to gradual reduction of time deposits where we still have 2x our natural market share, the gradual introduction of liquidity commission on large corporates. Let me also highlight that we are above 2Q 2020 level at constant perimeter. With asset spreads stabilizing and cost of deposits going down, 2Q level will be the benchmark for future performance. Commercial spread in the second quarter is higher than in first.
Slide 15 on fees and commissions. Fees and commissions are up 18% versus second quarter of 2020. Both quarters, as you know, were affected by lockdowns. Commissions had the best quarter in 3 years despite the cost of securitizations we put in place at the end of 2020 to support our capital position. Guido has already spoken about wealth management activity. Placement fees are up 44% and continuing fees up by almost 13% year-on-year.
As they have been suffering in the recent past, even focused on guaranteed loans, state-guaranteed loans, it is very important for me that traditional banking fees are also up this quarter as pandemic related economic restrictions are progressively relaxed. Bottom left chart shows weight of fees on core revenues now significantly above 50%, even though, as you remember, we do not consolidate our insurance JVs to which we own 50% minus 1 share.
Slide 16, very quickly on indirect funding. Assets under management are up 11% year-on-year and EUR 3.7 billion over the last 6 months only. Importantly, the increase has been largely driven by net inflows and good performance in both asset management and insurance and especially with our partners, AXA and Anima.
Slide 17 on financial revenues. In the second quarter, dividends and profits on investments include EUR 25 million from our JV with AXA and EUR 9 million dividend from the Bank of Italy. Let me stress that total financial revenues have averaged EUR 118 million in the first 2 quarters of 2021 versus an average quarterly rate of EUR 98 million over the last 2 years, so not too different.
Operating costs on Slide 18. Cost containment continues to be an area of strong focus. Overall, operating costs are down quarter-on-quarter, a constant year-on-year despite: a, salary inflation; b, the impossibility to negotiate with union's customary agreements. These 2 effects discussed around EUR 10 million to EUR 11 million per quarter excluding any potential further restructuring. After a reduction of 700 people over the last 12 months, personnel expenses of reduction of over EUR 200 million per annum are part of the strategic plan submitted to the DG competition. Other administrative expenses and D&A are down quarter 4% year-on-year.
Slide 19, an area of strong focus, cost of risk. As our CEO highlighted and as stress tests have shown, we believe we are comparatively well positioned in this area. No consumer finance, strong focus on household mortgages with 45% average FTD, high proportion of state-guaranteed loans, moratoria down 74% year-on-year and its coverage in excess of observed default rates. Cost of risk for 1H stands at 41 basis points. This includes 13 basis points related to model changes and 9 basis points of managerial overlay.
With a conservative approach, we have not yet reversed any of the COVID macro scenario related provisions, around EUR 300 million, which do represent an additional buffer. Bad loans coverage continues to go up. Regarding UTPs, slight decrease of coverage since December is due to the exit of large and well-overed tickets. Just as a reminder, our coverage of UTPs is down since June '20 as the lease year and therefore, more covered UTPs position has been transferred to AMCO.
Slide 20 on nonoperating items and taxes. Nonoperating items are stabilizing, but this quarter includes some nonrecurring components. EUR 22 million extraordinary contribution to systemic funds, provisions for risk and charges of EUR 51 million, which includes some extraordinary impact of legal claims.
With regard precisely to legal claims, I would like to drive your attention to petitum and its evolution. As you can see and despite some negative news coverage, overall, petitum is lower versus last year level, pro forma for the settlement with Fondazione NPS. Now less than 1/3 of the overall petitum is related to financial disclosure matters. Regarding taxes, they are positive for EUR 53 million, including some the assessment of DTAs, which incorporates updated income projections for 2021, in light of the improved scenario and the positive results seen in Q1 and Q2. We did not factor in strategic planning income projections, which would have led a few hundred million the assessment.
Slide 21 on capital structure. The bank has maintained its 12.1% CET1 ratio since December '20, despite 1 percentage point regulatory headwinds. This result showing capital generation ability has been achieved through a combination of both good commercial performance and capital management actions, including change in valuation criteria for real estate, all with limited impact on P&L. Please keep in mind that benefits from securitizations recently closed product announced are not yet included in the ratio.
Slide 22. As Guido will explain, we reduced expected capital shortfall versus SREP requirement to less, and I stress, less than EUR 0.5 billion versus EUR 1.5 billion we had projected back in November. The shortfall, if any, is now expected for June 2022.
A few points regarding the shortfall. There is no shortfall at CET1 level. The shortfall is within the capital conservation buffer and it has happened, I think, to other banks in Europe recently. And I will talk about the stress test in a moment, but the stress test has no pass or fail level. Reduction in shortfall was due to a combination of factors, which you find listed on the page. Let me only highlight that we have not included any further capital management actions in our estimates but for an additional securitization over the next 12 months.
Slide 23. A lot has been written and said about it, including in our press release, so I will be very quick. Cost of risk in the adverse scenario is aligned to what we had estimated in the strategic plan sent to DG competition and published on our website. Adjusting for a wholly hypothetical EUR 2.5 billion capital increase, the implementation of which is, in any case, subject to approval by Digicom and the European Central Bank, the CET1 would be at 6.6%. The number, being based on static balance sheet assumptions, does not include the effect of the restructuring efforts that more capital would enable, the legal claims, derisking affected with the foundation agreement.
Let me remind you that operational risk in the adverse scenario, this caused the bank 2.3 percentage points or over EUR 1 billion in capital. With reference to targets and static balance sheet assumptions, which are clearly more relevant for banks under restructuring, as stated by Central Bank's representatives. Let me quote Eva, "The results of the exercise are an input to the SREP. The providers should consider individual results together with the managerial decisions and capital actions put forward by bank to assess the potential need to set a Pillar 2 capital guidance. Supervisors may also consider the impact of the static balance sheet assumption in evaluating the results of the stress test during the SREP."
And finally, on Slide 24, a few quick words on the Italian Nobis portfolio. We have positive reserves of EUR 300 million for a realized gain not included in our capital estimates. Sensitivity of the fair value to other comprehensive income reserves remains at circa EUR 1 million per basis point low by historical standards.
Let me now open to questions.
[Operator Instructions] The first question is from Antonio Reale with Morgan Stanley.
I'll trust 2 questions about capacity only. I have a few, actually, apologies for that on capital. The first one, while listening to your presentation, it doesn't sound like a bank with sort of a capital plan. You sounded very upbeat with the amber around your capital shortfall. I then look at fully loaded CET1 at 10.6%, which still implies a relatively clean buffer to your minimum requirement flat. Can you remind us the moving parts on capital when it comes to regulatory headwinds and any other tailwinds you foresee from here? That's my first question.
Second question, I wonder how the conditions agreed between the talent treasury and issuing credit would affect the announced capital plan of EUR 2.5 billion. Can you confirm, first, on the time line that you would still look to launch a capital increase as communicated by March, April 2022, the latest? And secondly, on the size, even after taking into account the management measures, it seems like the capital shortfall at least informed by the stress test mainly higher than the EUR 2.5 billion you guide to? Is that the case? And if not, could you please explain what you see?
Then looking at the stress test. First time for Monte Paschi back from 2016, we've seen results. You've talked about it in your remarks. However, my question is the shortfall across the board, ranging from CET1 total capital and leverage ratio was larger than EUR 2.5 billion. Now I know this is an adverse scenario and that there were a number of one-offs affecting your 2020 numbers, which may have not been stabilized. But I wonder what your expectations are with respect to your capital requirements and Pillar 2G next year as a result of the tests?
And lastly, on P&L. Great to see the trend on net interest income. Can you share some numbers around the initiatives you've taken on the funding side? Could you perhaps give an indication as to how much you're paying relative to peers across products in your funding stack?
Thank you, Antonio. Maybe I'll start. I'll try to be as complete as possible given the statements that our CEO made at the very beginning. On capital headwinds, you find a lot of details in the footnote on Page 22, the second footnote. In that sense, we still see around EUR 9 billion of RWA inflation. We already have had inflation of RWA for around EUR 1.2 billion in the quarter. The timing and the impact of the other headwinds that you see on footnote 2 depending from a number of factors. We have taken, as you know, the stance to be as conservative as possible in giving you these numbers, both in terms of amount and timing.
On the capital plan, the bank has not reviewed its capital plan. As you know, the priority of the bank and of the majority shareholder is for a structural solution and, therefore, the approach from UniCredit is very useful in this perspective. There is also an indicative time line that I think has been stated in UniCredit press release. So we see what happens at the end of that time line, but we are optimistic given also the performance of the bank.
In terms of March versus the stress test, we try to be as objective as possible here because as I said, a lot has been written and said. First of all, you see the number of 6.6%. You can judge yourself whether that would be good enough or not good enough. There is also -- and that's what we have tried to highlight in our presentation some consequences which derived from the static balance sheet assumption. You are Italian, probably have read on the press some interviews regarding the fact that stress test are static balance sheet assumption are more relevant for banks under restructuring, which we are because we are part of the Digicom restructuring plan.
On the P&L, we have been conservative in the gradual approach of liquidity commissions. We have so far reached out to approximately the first 100 clients, so there is much more to do. I think we'll now go to the next 100. Also, let me highlight that because we have started these initiatives in second quarter, there would be some positive effect also in the next few quarters just from the phase-in of what we have done already.
We have additional time deposits expiring for EUR 600 million in the course of the year. And we have another -- with an average interest rate higher than 1.8%, and we have around EUR 7 billion of time deposits still. These were put in place at the time, which is not today, fortunately, where the bank was in need of liquidity. So that's the situation. I think our CEO already talked about Widiba, which is still offering some limited time deposits and not -- certainly not for the need of liquidity.
Can I just follow up on the EUR 7 billion of deposits? Can we assume a similar interest rate that you mentioned, 1.8%?
Yes. I think it's a fair assumption.
Next question is from Giovanni Razzoli with Deutsche Bank.
A couple of questions from my side. If I look at Slide #5, Giuseppe, and I look at the gap that you are showing in terms of cost of deposits. Is it fair to assume that the -- give or take, the overall potential of improvement from the fine tuning of the cost of funding is in the region of EUR 75 million, EUR 80 million in the best case scenario? And how much of this is already incorporated in your business plan assumption? Because if I look at the run rate of the second quarter net interest income, you are already ahead of the 2022 NII target. Clearly, TLTRO may have played a role, but it seems to me that there is some upside on those figures. So if you can elaborate a bit more on this.
And then another couple of clarifications. Sorry, this is my mistake, but I guess you don't have any more obligation guarantee to the [indiscernible] standing, right? And any cost related to that? So if you can please confirm this. And there has been a very, very disclosure about the risk profile of your loan book, which seems probably significantly below what is the perception there. What is the cost of risk of the performing exposures that we can assume? There's been overlays in the quarter, so it seems that the cost of risk should be in the 30, 40 basis points areas if we were to exclude the nonperforming. Is that an indication that it could be fair to assume?
So Giovanni, I think a few consideration on the cost of deposits. We had recommended the gradual reduction of deposits in our business plan, probably it's fair to say that we are doing a bit faster than what we had in this range. There are, let me stress, other areas which do not pertain necessarily to deposits. We still have, for instance, some bilateral repo lines outstanding, which will expire over time. And we still have expensive institutional funding. These are areas of upside, especially in the context of a structural solution. So this is on the liability side.
No, we do not have any obligation in Banca de [indiscernible] anymore. The cost of performing has been around EUR 50 million in the course of the first semester. However, the first semester has been impacted, as we said, by a number of managerial overlays and model updates. I think it should be lower than that in the second semester. It's a bit risk -- we don't want to do that to project 2022. But as you said, we think that from a comparative point of view, the loan book should be -- should compare well to other banks.
But you said EUR 15 million in the first half, right, 1 5?
5 0. But this includes the impact of the model updates, which mainly pertains to performing loans.
The next question is from Fabrizio Bernardi from Bestinver.
Again, there's obviously a question on -- a couple of questions on capital. I understood what you said about we are fully loaded, adverse and so on. What I don't understand is that today, this morning on the press that there were a couple of articles saying that the Minister of Finance was talking to the parliament of recognition about the fact that Monte dei Paschi is a capital increase of EUR 1.5 billion. So my first question is what is this? Is it a shortfall? Is there a shocking adverse? Is that what you need there? Is common equity is Q2, what is that? We're asking this, because I think that everybody is a little bit lost about the reconciliation of number between your numbers, the shortfall you say you have, the scenario and so on.
And the second question is that let's assume that you need the capital increase. It can be at EUR 0.5 billion, EUR 2 billion, EUR 10 billion, so I don't know, maybe you know. But my question is that which is the legislative framework in which the capital increase would be done? The question is basically the fact that the last capital increase was precautionary and we're capped according to the RRD Article 34. It was a very complex issue. There was the ECB, the Digicom and so on. So if you need to go for a capital increase, that would be a plain vanilla rights issue that the government probably will underwrite for its stake? Or the legislative framework would be different and maybe much more complex?
Thank you, Fabrizio. I think on the capital we have provided a lot of details. We have tried to be as analytical as possible so I think you, as everybody else is in the condition to run a detailed analysis. On the point regarding capital increase, the bank is, at the moment, fully focused and very busy on the structural solution. So there is no work ongoing on the capital increase even that, as we've always said, the priority is on the structural solution for both the bank and the majority shareholder. So it's difficult to comment on something we are not working on...
I understand. My question is -- if I can interrupt you?
I know. I'm not done. I've seen a lot of research reports which were extremely pessimistic on the results of the stress test. Some of you have written the bank would be putting resolution at the date of publication of the stress test. You see that this has not happened. So I think you can read some of the peers' reports and probably take out the most negative views that they have given.
Yes. In fact, that was my point, because many investors they don't have equity of Monte dei Paschi, they just have the Q2, and they are selling it to buy the senior. So that was exactly my point. But in any case, I understand your answer.
Sorry, I didn't mean to be unpolite, of course.
No, no, it's clear. Okay.
The next question is from Hugo Cruz with KBW.
I have quite a few questions. First on the capital. You mentioned the current CET1 ratio doesn't include the benefit of recently concluded securitizations. Can you give any estimate for that benefit? Then on -- you also mentioned that the DTA, you haven't done a DTA readjustment for updated estimates. Again, can you give a potential estimate of what could be the impact in the P&L?
Third, the settlement with the foundation for the EUR 150 million, can you clarify some of it has been booked already or not or is still yet to come? And fourth, I think you didn't give guidance on NII for this second half. If you could give that? And finally, when do you expect to get feedback from the ECB on your capital plan?
I think on the securitization, we did not include the number in our estimates because securitization have 90 days approval time from regulators. This Stage 2 securitization, which is the first in Italian market, so we have not included it in the number. If I have to guide you somehow, I'd probably say that it should offset our estimated RWA increase for the third quarter.
On DTA, I made a comment regarding the order of magnitude of the potential reassessment. I don't think it's appropriate to be more detailed than this, because probably the plan that we've submitted will never be implemented. So it doesn't make much sense. The only thing I'd probably add is the impact would mainly be a P&L and only to a secondary effect on capital.
On net interest income, during the presentation, I said second quarter would be the benchmark for future performance. I also said that the introduction of liquidity commission has been gradual. So in normal situation it'd be constructive. Of course, given the focus that we have at the moment on the structural solution, we do not want to give guidance at the moment.
And yes, I asked you about the settlement as well.
Yes. So the numbers, of course, we cannot comment on the single provisions, but we have already included the cost or the impact of any settlement with the foundation in the second quarter numbers. On the capital plan, we have sent it to the ECB. I'm not sure when we have to expect for a formal answer on the capital plan. As you know, we have issued a press release where we had given an indication for a timetable for a EUR 2.5 billion capital increase upon their request. I assume that the regulator, as the bank and the shareholders are at the moment, fully focused on the potential transaction with Unicredit, not on anything else.
The next question is from Corinne Cunningham with Autonomous.
I think most of my questions have been answered. Just on the EUR 500 million estimated capital shortfall in Q2, does that include the impact of all of the things that you're doing? So you mentioned the securitization that will close in Q3. Is that included the full TRIM impact literally everything? You're literally factoring everything in there or there may be some additional positive surprises to come or negative surprises for that matter?
Including the negative surprises in terms of RWA inflation are all there. Of course, we do not have a crystal ball. So that's what we see today. In terms of management actions, of course, the shortfall includes the effect of the securitization. We have already signed and includes 1 additional [indiscernible] side securitization. It does not include any further capital management actions. Of course, at the moment, even discussions that are happening between the majority shareholder and UniCredit, it would be difficult to implement any other capital management actions, which would change somehow the profile of the bank, and that is why such actions are not included in the number, which is an upper bound of the range that we have given.
And does that mean that there are no discussions with Anima taking place at the moment either?
Anima is a list player, but my comment was very wide reaching.
The next question is from Luigi Pedone with Equita.
Just a clarification from my side regarding the capital shortfall. Does it include the EUR 500 million restructuring costs?
Thank you, Luigi, for asking the questions. We have added a very clear figure on Slide #2. So it does not include the restructuring costs. Given the capital position of the bank, it will not be appropriate to affect any restructuring. But more importantly, we wouldn't do that as we are now in discussions with UniCredit, so there will be different actions to be taken.
[Operator Instructions] Gentlemen, there are no more questions registered at this time. Gentlemen, would like to add any final comments to conclude the conference?
Thank you to everybody. Bye.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.