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 Third Quarter 2021 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Guido Bastianini, CEO and General Manager of the MPS Group. Please go ahead, sir.
Good afternoon to all and thank you for joining the MPS quarterly results call. I will give you some lights on recent developments, and then I leave the floor to Giuseppe Sica, our Group CFO for more details.
Before I start, let me say upfront that we will not comment on past discussions between UniCredit and MS and the related often groundless ores. I hope that recent statements by the UniCredit and MPS quarterly results will help putting any such room behind.
And now, on to Slide 2. Let us begin as usual with the key highlights for 9 months 2021. First, Monte dei Paschi business machine continues to accelerate. Net interest income has increased for the second consecutive quarter. We have reduced GAAP in commercial spread versus the Italian market by more than 40% over the last 12 months. 9 months fees have increased 6% year-on-year and now represents nearly 60% of core revenues, including the contribution from AXA-MPS joint ventures.
Wealth management, the gross inflows are above EUR 11 billion, 35% higher than 9 months 2019 pre-COVID levels. Second, asset quality remains under strict control. Moratory portfolio decreased 80% versus June 2020 peak, representing now 4% of the performing loan book, with the coverage higher than the costs observed on default flows. Default rate is at 1.7%. Gross NPE ratio remains stable despite the new disposal and new definition of default at 4.4%, one of the lowest level in Italian market.
Third, quickly on legal risks that are showing a positive trend. Legal risks and threat and claims are now at the same level of 2019. 2 thirds of the overall Petitum is related to ordinary business. Coverage of legal risks is one of the highest non-Italian banks. Fourth and last, capital ratios significantly improving. Transitional CET 1 ratio is at 12.8%, plus 70 versus June 2021 and versus December 2020 and with a buffer of 4 percentage points versus regulatory requirements.
CET1 fully loaded is at 11.3% versus 9.9% of December 2020. This means 170 bps of capital generation, also offsetting 30 bps of regulatory RWA increase. Fully loaded the CET1 ratio has increased 70 bps since June '21. We now estimate a zero capital shortfall over the new -- the next 12 months versus EUR 1.5 billion shortfall, we were expecting for January '22.
And now on to Slide 3. The net results for 9 months 2021 are here summarized. 9 months 2021 closed with a pre-provision profit of EUR 679 million versus EUR 503 million in 9 months 2020. On a like-for-like basis, it is excluding the impact of the NPE portfolio span-off to our income. Net interest income is flat year-on-year, notwithstanding the systemic pressure on assets and the increase of deposit. These are up by 6% year-on-year, boosted by the commercial momentum.
Cost reduction continues with less 2% year-on-year, thanks to the strong cost discipline and despite the non-renewal of the company paid agreement. Ordinary cost of risk is 32 bps, including the volume by cost of calendar provisions for EUR 60 million that we fully booked on capital and excluding the release of provision we booked in the third quarter related to 2 big tickets back to performing.
This is in line with the 2020 levels, once adjusted for COVID-related and Hydra-related provisions. Net operating result is positive for EUR 648 million versus a pro forma 9 months 2020 of EUR 39 million. And this is the best result in the last 6 years. Net income of EUR 388 million means a 9 months '21 return on tangible equity close to 9%.
Let me also remind you that in the first 9 months, we have paid EUR 160 million for contribution to systemic funds. In the lower part of the slide, some key figures of balance sheet already mentioned. Asset quality and the strict control, capital shows continuous and meaningful improvement. Liquidity remains ample with room for further initiatives.
Going deeper into commercial activity on to Slide 4. Wealth management gross and net inflows are once again showing a positive trend, with an increase in gross volumes of 55% compared to 9 months 2019 pre-COVID level, and the increase in the net inflows is even more significant. Total indirect funding continues on its positive plans.
Assets under management have grown 7% since December 2020 and now represents 62% of total indirect funding compared to 58% in 2019. On the right-hand side, you can see how commercial performance is translating into fees. This represents a 55% of 9 months 2020 on core revenues or 57%, including the income from AXA-MPS JV.
And now on to Slide 5. Proactive management of deposits has continued. Expensive time deposits are now at 9.6% of commercial funding versus 14.6% in 2019. As we have said at the beginning of the August, there is more to come. Net lending has increased. Focus however is on pricing, with an increase of the rate of new loans for 25 bps year-on-year and asset quality with 85% of new ordinary lending secured.
Looking at the right-hand of the slide, a chart, which is key for me. Commercial spread versus the market shows a decrease of more than 50% year-on-year and is now extended mainly due to the lower cost of deposit and resilience of lower rate. Apart from ongoing reduction of the cost of funding should have launched of internal consumer finance business should further sustain asset spreads.
Now on Slide 6, a glance to Banco with excellent results. Bank's strategy, which is new to transform the liquidity into assets under management. And lending is bearing good results with double-digit increase in gross wealth margin flows and new mortgages. EBITDA reached at EUR 9.6 billion of total funding stock, EUR 1 billion increase year-on-year, mainly driven by wealth management.
As you can see in the bottom of the slide, all indicators of platform usage and transactions are increasing, also thanks to advisory business and digital innovation.
Now on to Slide 7. COVID-related moratorium are now at EUR 3 billion, 80% below peak. The risk part of the moratoria portfolio has been included in the CRUSH program, and about 50% of the total moratory portfolio has been classified as stage 2. This means we have one a coverage of about 5%, significantly higher than observed 1.7% default rate on expire the moratoria. State guaranteed loans have slightly increased in third quarter 2021, although its slower rate, by now, state guaranteed loans are EUR 11 billion, which means, 15% of total performing loan book corresponding to 5% of market share, which is in-line with the natural market share of the bank.
On Slide 8, especially after much mis-perception, some more focus on asset quality. All indicators show signs of improvement. Gross NPE ratio stable from December 2020 adjusted for the impact of the new definition of default. No disposal has been done in the period, but we can't exclude this possibility for the future.
Coverage of nonperforming exposures has reached 50.7% pro forma, considering the impact of big-ticket back to bonus on the 1st of October and more operate calendar provisioning cost accounted on capital. This means an increase in coverage of 4.5 percentage points versus December.
Gross stage 2 decreased EUR 3.4 billion, maintaining the coverage at 3%, in line with the first half of 2021. Now Slide 9. Some points of our legal risks given investors' strong focus. The overall Petitum is now at EUR 6 billion, 40% below December 2020. 2 thirds of these are related to ordinary business and not be similar to what other banks have. The bank coverage on legal risks is one of the highest level among main Italian banks.
We continue to work on settlements and as done with the MPS foundation we'll promptly inform you of positive developments. Coming to our capital position on Slide 10. CET1 fully loaded ratio has increased by 1.4 percentage points since December 2020 and 0.7 percentage points versus June and is now at 11.3%. Thanks to the profit generated in the 9 months and the capital management actions implemented. CET1 transitional is 12.8%, 4 percentage points above regulatory requirements.
Risk-weighted assets continue to lower despite EUR 1.2 billion RWA increase for regulatory headwinds already booked and that are significantly below strategic planned estimates. Our estimates for peak, RWA are significantly lower than they were at the beginning of the year. Thanks to focus on granted loans, capital management and securitization.
In this respect, let me highlight that we expect additional benefits from a synthetic securitization analyzed in July. Finally, and very important, considering this evolution of ratios and the new estimates of regulatory headwinds year-on-year at September 22, no capital shortfall is expected. Capital management action as we have done can be activated when needed, subject to the relevant approvals.
And now on to Slide 11. Before I leave the floor to Giuseppe, a few words on MPS plans on -- as a way to reinforce the bank's commitment towards sustainability. More in details, we have identified the 6 areas of intervention detailed into commercial campaigns, addressing next-generation the main objective and goals and supporting our customers' growth and development plans.
We have identified 21,000 target clients to be addressed by our first specific campaigns with the commercial machine we'll keep to respond it quickly and professionally to clients' needs.
Now I will leave the floor to Giuseppe for more details on 9 months results.
Thank you, Guido. Now some more numerical details. Slide 13 shows our key P&L figures for the first 9 months. We also show 9 months 2020 adjusting for the NPE portfolio sold to Amcor. And we hope that the comparison is helpful to you. Let me highlight some items that contributed to these results.
Net interest income is stable year-on-year. It gives a misperception and importantly with the positive trends. Fees and commissions have increased consistently with a strong contribution from wealth management activity. We can do more, especially on lending, depending on capital availability.
Reflecting the 2 substance of our partnership, we consider the contribution from the joint venture with AXA in our core revenue. This is an increasing source of revenues with low volatility. Operating costs continue to decrease, this is a testament to strong discipline, especially in-light of the non-renewal of the trade union agreement.
Cost of risk remains low. This is the results of the hybrid de-risking and one positive one off. I will give more color on this shortly. However, let me stress here that we have maintained absolute discipline in our cost of risk, with coverage increasing and calendar provisioning fully accounted for.
Ordinary cost of risk is in-line with 2020 level. Non-operating items are composed for 70% by Hispanic charges and DTATs. So a clear contribution to our stakeholders. Net fee income at EUR 388 million, consolidated the positive results of previous quarters with an annualized return on tangible equity close to 9%.
Now Slide 14, on net interest income. Net interest income increased 2.5% quarter-on-quarter and 2% versus pro forma third quarter 2020. We are 12% above first quarter levels. As I have just said, progression remains positive.
Commercial spread increased from the first quarter, thanks to a reduction of the cost of deposits, but also to resilient lending spreads. Front book rates are now above back book rates and have been for the last 2 quarters. As Guido said, we have more to do -- on fund deposits and liquidity commission, where we have been gradual in our approach.
We have a lot to do on the asset side, given capital constraints. We have only focused in this year on guarantees and low-risk loans and consumer finance is yet to be launched. Let's move to fees on Slide 15. Results confirmed the good performance of the business machine. As a wealth management and a small business focused bank, seasonal impact is not surprisingly more relevant for us than for others. Say for August, results are in-line with previous months.
Having said that, these have grown 6% year-over-year with a strong contribution given by wealth management and an important support from traditional component. Given what the colleagues have gone through during the summer, the result is even more remarkable.
Now Slide 16. Dividends and profits from investments are essentially represented by AXA-MPS net income contribution. It is worth highlighting the strong increase year-on-year and the non-volatile source of core revenues for the bank. Contribution to total revenues from financial assets is in-line with the results obtained in previous years, with a share of trading income, which is at 9%, in-line with main Italian banks.
I will give you only a few highlights on Slide 17. Total operating costs are down 3.7% quarter-on-quarter and 2% year-on-year. Adjusting 2020 for the contribution of Solidarity funds, we have not been in the position to renew this year, same with the discussion, costs would have been down 3.1% year-on-year.
Other operating expenses are down almost 10% year-on-year. We show ongoing discipline even before further restructuring.
Now let's focus on cost of risk on Slide '18. Net of nonrecurring components, 9 months ordinary cost of risk is 32 basis points, a level in-line with 9 months 2020, net of COVID-related and hydro related provisions.
Going a bit more in detail on 9-month figures. We report a cost of risk of EUR 34 million. We have released provisions for 2 big tickets fully back to performing between September and October for EUR 131 million.
This was somehow expected but not embedded in previous estimates of -- after 18 months, we have updated GDP projections for internal models, releasing EUR 124 million of provisions. GDP projections were based on a year 1 GDP growth of minus 10%. We are now assuming below 4%.
I understand other banks have updated GDP projections more often in the last few semesters. Importantly, the benefit of update of GDP projections have been more than offset by an increase in coverage, most of which we have done in the third quarter. The ordinary risk would stand at EUR 137 million.
Additionally, we have voluntary inpatient around EUR 60 million of calendar provision impact. Being unable to justify greater coverage at this stage, this is taken as a deduction to capital. Table on the right focused on the third quarter figures, and they show a similar trend to the one I have just discussed.
Slide '19 gives some more detail on NPE exposures. Numbers are self explanatory. I hope, so let me give you a few highlights. NPE exposures are constant despite the new definition default and without any disposal. In fact, default rates are going down. And Guido has commented on the limited amount of moratoria on our books. Fuel rates have more than doubled since last year.
Finally, we keep increasing the level of provisioning since Hydra, which had significantly reduced the vintage of our NPE portfolio. Importantly, UTP coverage has gone up by 4 percentage points since June, including also the impact of calendar provisioning.
Slide 20 on non-operating items. Third quarter non-operating items are mainly related to systemic funds contribution and DTA fees, while no significant provision for risk and charges were booked in the quarter. As anticipated by Guido, in the 9 months 2021, more than 70% of our non-operating items are related contribution to systematic funds and DTA fees. This is in the year where we have reduced legal fee by 40%.
Now on to Slide '21 on capital structure. On a transitional basis, the bank has recorded around 1.1 percentage points negative regulatory impact, including 30 basis points under new headwinds already announced in Q2. Against this, MPS has generated capital for 80 basis points through retail earnings and reduced RWA for 70 basis points, also to focus on collateralized lending and state guaranteed lending.
That put in place, capital management actions creating 60 basis points of capital with a negligible, if any, impact on earnings. Change of valuation criteria for real estate, sale of own shares and one synthetic securitization. As a result, Phase B CET1 is up 70 basis points to 12.8% despite 1 percentage points regulatory headwinds.
Fully loaded CET1 at 11.3% is up even more 140 basis points since December 2020, despite RWA inflation and the impact of calendar provisioning. We have already commented about the fact that we now expect no shortfall over the next 12 months. So let me stress a few things.
RWA inflation is lower-than-expected and likely to be lower. Peak is going to be significantly lower than previously projected. Despite RWA inflation starting to flow through our numbers, RWA are actually down, thanks to state guaranteed loans and lower PDs.
9 months, we more than offset the negative impact of Hydra deal that as a reminder was also around 140 basis points. Slide 22. We normally have a last page, an overview of our BTP portfolio. You will find this in the appendix, as there has been no big change post very significant deleveraging. Instead, let me give you an overview of what the bank has achieved over the last 12 months. On commercial performance, net interest income is resilient and increasing quarter-on-quarter with good progression. Fees are up 6% year-on-year. Quarterly average is well above what forecast in the business plan submitted to DG competition. Net operating result of EUR 650 million is the best achieved by the bank since 2015. Cost of risk is a traction of what was embedded in the business plan submitted to DG competition.
I am sure this will be recognized in your estimates. On derisking, legal claims are down 40% and in line with the end of 2019 with a coverage, which is one of the highest non-Italian banks. Gross NPE are down 65%, thanks to Hydra. We are constant throughout the year despite non-disposal ending introduction of the new definition of the focus. The bank has generated 140 basis points of fully loaded CET1 capital despite RWA inflation, reducing zero the expected capital shortfall for 2022.
These results have been obtained, thanks to the strong commitment of all MPS employees that we would like to thank once again.
Now let us open to Q&A session.
[Operator Instructions] The first question comes from Antonio Reale of Morgan Stanley.
I hear your message. You're painting a rather positive picture on the back of the numbers. I have a few questions, please. The first one on pre-provision operating profit, which is sort of the first-line of defense for any bank. I'd like to hear your color on the outlook and what you expect for PROP going forward? Also, what initiatives do you intend to take or you're taking to improve funding costs and operating expenses, in particular, which have been historically some of the weak spots for the bank?
On funding costs, I noticed your deposit base dropped quarter-on-quarter, which is -- is there something we didn't think was possible in this environment. Maybe you can talk about some of the initiatives you're taking? My second question is related to the commercial footprint, presumably extending the privatization deadline from the met, the requests will come with DG Comp, presumably imposing structural commercial restrictions and more cost cutting. How do you think this will impact the franchise of the bank?
We've seen the last round restrictions significantly affect the day-to-day business. So any color you can share there on your expectations. Another question on -- if you can give a bit more color on what you think is the expected time line from here with respect to the capital plan. And presumably, you'll have to present a new business plan. Is that the case? If so, when would you expect it to present it? And lastly, if you can just remind us what is the annualized contribution from TLTRO in your net interest income?
Antonio, let me start with the question on pre-provision profit. You are right. We have to present a new business plan. We say it also in the press release. And I think there will be a number of initiatives that will enhance the number that you have just seen. We don't think the 2021 numbers has impacted the pre-provision profit from extraordinaries. We have shown that the trading gains are in-line with previous years. So they are probably sustainable in this respect.
As you can imagine, we had already embedded a number of initiatives in our plan that we have not been able in the previous plan. But we've not been able to put in place because of capital cost trades, because we did not have the capital to affect further restructuring, because the previous plan was built having in mind a imminent M&A transaction. So for sure, there will be a number of initiatives that we work to improve, and I would say, improved significantly this pre-provision profit. We will not be able to quantify this today. And we have just started to work on the plan.
On funding cost, I would probably follow a similar line of reasoning, i.e., you have to bear with us. I know that you have been very patient already over the last 12 months. We are in a new phase at the moment. But of course, there are a number of easy wins and the obvious bank on time deposits, we still have probably around EUR 6 billion at 1.5%. This is going to expire over time.
We have embedded in the previous business plan on a number of institutional issues. And the question mark on whether we will need them given the improved capital position of the bank is and when we affect capital increase. We have not been able yet to launch the consumer trends, which will be further boost on the net interest income. So there are a number of levers, and there will probably be more than what I've just described.
But again, apart from the obvious ones, which are the one times about it, I will not give you a number. You asked about the decrease in the deposit base. This is one of the levers that we have pursued and we can continue to pursue, because we not, we can apply zero rates at the time deposit expire, we can apply liquidity commission and that is what has driven the decrease in deposits, which was based on very well thought through commercial actions.
On the commercial franchise, there are 2 parts to this question probably. The first one is whether the noise read about every day on the press, and it's where is impacting the network. The commercial performance has been good, but obviously, some impact must have been there. Then, there is a question of how the new restructuring plan will impact the commercial footprint, and I think this a bit too early to answer will be part of the new business plan that we have just started to work on and we have through the [ met ] discussed with DG Comp.
The time line is also dependent on these discussions that, as you know, see the mass as the primary counterpart to DG competition. I can say that already in 2021, we see the impact of notating implemented capital increase. So from the bank perspective, if we have to do it, we would be happy to do it sooner rather than later. I have mentioned -- we have mentioned, for instance, the lack of renegotiations with unions, which has cost a lot of money. We have mentioned 2 or 3 times in our presentation of capital constraint. Obviously, we have issues to access the market. We have the spreads which are very high and we normalize in the context of capital increase.
The TLTRO, you know that we have around EUR 29 billion of TLTRO at the moment. We have the positive now with center a bit less than in the first 6 months, we are at around EUR 23 billion. So again, we are a bit more than the 0.5% on the EUR 29 billion because we have a bit of excess funding from DCB compared to what we said in the first half, but the match should be relatively.
The next question is from Azzurra Guelfi of Citi.
A couple of questions for me. One is the asset quality and one is on capital. In the quarter, the capital generation has been around 70 basis points. Can you give us some color on the initiative also going forward and regulatory impact that are expected for 2021 and 2022 and the magnitude of risk-weighted assets versus other action? I've seen you've done some synthetic securitization, are you planning more on this front?
The other one is on the asset quality. You have the first Italian bank to release quite a sizable chunk of the macro provisioning. And if you can give us a little bit of color on the process on the update of this because, if I'm correct, it's a bit below 50% of your COVID provisions that you have released. And when I look at the underlying cost of risk the ordinary one, you indicated it is around 30 basis points. Do you expect this to be a reasonable run-rate for next year?
Thank you, Azzurra. Maybe I start on the question on asset quality. I just said during the presentation that I understand that other banks, and they have also stated it publicly as far as I know, they had the macro projection, GDP macro protection over 6 months. I have a couple of examples in mind that. So in fact, you see a big number, but the big number is because we have kept the GDP minus 10% for the last 18 months or for. So just to put everything on an equal footing with the other banks reporting. And we used this number as we said to increase the coverage.
Now the question on -- and of course, the total number was around EUR 300 million. Clearly, you need to deduct this from the managerial overlays. We think given the coverage that we have on stage 2, we then decreased of stage 2, which should be adequate depending of course on what initiatives we'll be taking in the fourth quarter. I will not be able to comment again because we have just started to work on the business plan on a normalized cost of risk.
But the 2 comments that I think we have to make are that, number one, the cost of risk that we had in the previous business plan, and we also wrote in the press release is aligned with the adverse scenario of EBA success. The second comment is that both in the base case scenario, any adverse scenario the impact of course of risk for Monte dei Paschi is lower than the average of [ vistaland ] banks that have undergone the stress test. So I will not give you a number at this stage, but I think it has 2 important indications.
On capital, we have gone quickly through Slide 10. However, if you look at the footnote #3 on the slide, you see the impact that we still expect. So there are around EUR 7.8 billion of additional impact or RWA headwinds. So we start from 48, will be the impact to that to around 55%. Now the business plan that we were forced to publish even like at RWA peak of around 61. So you see that we are below this. We had announced with the first half 2 securitizations.
One has been very successful. I think, it also was acknowledged with an award. And the other one is still attaining regulatory approval and we have a further impact on RWA. So that would reduce past or offset part of the model changes that will come through over the next few quarters. As I said, I think in the first half results call, we tend to give you a conservative view on the timing and on the amount of these regulatory headwinds. I'm not sure we had much on that point at this stage.
The next question is from Jean Neuez of Goldman Sachs.
I just wanted to ask on kind of net interest income and related to your comment on bond issuance. There was a headline a little bit before the results came out that you might be in temporary breach of MREL. And I understand you might -- from the comment, I don't think you said it is -- but I get the feeling you don't want to issue before you raised equity, or also given the -- where the spreads are. But what do you think is a reasonable amount of issuance and what type of form you would be looking at doing? I'm just trying to understand what could be some sort of an impact on net interest income and therefore profitability after you've normalized your capital base also on the bond front?
Yes. I think the headline is correct. It's also in our press release, we said that we probably have a temporary breach of MREL based on LRE. We said that action would be fully towards by capital increase. We said there'll also reduction in terms of issuance. So in the business plan, we had a relatively heavy amount of issuance, especially in the form of senior non-preferred. Given the lower RWA and the better results of the bank, this is likely to be significantly lower.
So you would take care of MREL with equity as opposed to with bonds in that case. Okay, okay. I get that.
We have to finalize the projections, but the starting point is better in terms of available capital in terms of lower RWAs. So again, the Check Eisai we best issue less, if not much less.
The next question is from Hugo Cruz of KBW.
So a couple of questions. I don't think you've said, when do you expect to have your new draft business plan ready? I know, it doesn't get the timing certainly on new. There's the government and European authorities, but you must have an internal deadline to have your plan ready. And I was wondering if you will be able to publish that even before you'll get definitive views from their regulators? And then, you mentioned -- I think the presentation mentioned some potential capital actions besides the securitization.
So can you give an estimate of this securitization? How much could that contribute? I know, it's not approved. But it would be helpful to have a number. But also, what are the capital actions you might have in your pipeline and that's it. And sorry, just one more. Just to clarify, I think you said the regulatory headwinds before these capital actions would move the RWAs from EUR 48 billion today to EUR 55 billion. That's how I understood if you could correct that, that would be great.
On the business plan timing, we said, we would like to move quickly. But with all the due respect of all the authorities which are involved. Many of the things are not in the end of the bank. From a practical point of view, the 2 considerations we would make are, number one, once we do it, we will be able to affect certain initiatives much faster. Number 2, because we don't have a shortfall now, we'll also have a bit more time if needed. On the securitization, we have already announced 2 in July or August, there is one, which is pending finalization and should reduce RWA by another EUR 400 million. Desegregation, I'm sure you have seen the highlight in the page on fees do cost money. So do we need to do more, frankly, I would like to avoid if there are other actions that we can do.
Okay. And the regulatory headwind, it was going from 48% to 55% before any mitigation, right?
Before any?
Before mitigation before any potential?
Yes, exactly. Exactly. There's not the guidance because, of course, if we do more securitization, we'll be lower if we increase our loan market share by 20% will be higher, we are working on the plan, but initial number in what you just said.
The next question is from Corinne Cunningham of Autonomous.
Most of my questions have been answered. But I just wanted to know on the legal risks. The slide shows now at GBP 6 billion. I think last time, they were at 5.7%. What's the rationale behind the increase there? Did you hear me?
Yes, Corinne. We have to look into the data one moment. If you have another question, we take the other question first.
Yes. The only other one was just asking. At one point, you were discussing bank assurance agreements to potentially raise some more capital, have they been shelved?
I think there was 1 press release, and I think there was also some analysts talking about it, commenting on anymore. We made a press release regarding negotiations with animal, which were 10 tool. So that's one. On bank assurance, can things be done? I think, yes, is there anything in the pipeline at the moment, no. I'm telling it's a matter of definition, but the overall legal risks are unchanged compared to first half. Actually, it's a matter of representation and Puma, maybe a little better, can reach out to you, but there is no increase compared to first half.
The next question is from Axel Finsterbusch of Kite Lake.
Just one quick question. So I understand that difference and will have to ask for an extension in relation to the commitment to sell its 64% stake by December '21. What are the times for this request for an extension? And when should we expect to hearing that?
I think we cannot add much more to what represented as of the next has publicly stated. Again, this will be in discussion between DG Comp and MPS. And possibly, I cannot be more helpful than that on this question.
Gentlemen, at this time, there are no questions registered. Would you like to make some closing remarks?
Thank you for participating to the call to the next time. Bye.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.