Bper Banca SpA

MIL:BPE

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the conference call on the consolidated results of the first quarter 2021 of BPER Banca. [Operator Instructions]

At this time, I would like to turn the conference over to Piero Luigi Montani, CEO of BPER Banca. You have the floor, Mr. Montani.

[Piero Montani, executive]

Good evening, ladies and gentlemen. I'm here with the CFO and the person -- Head of Planning and Control, and the Investor Relations Manager. Before giving the floor to the CFO for the presentation of the results, incidentally, I have been here for just 10 days. I'd like to thank Alessandro Vandelli for the commitment that he put into this period, which has been fundamental for the BPER Group.

As you know, in the first quarter, we closed the integration of the 587 branches of UBI, which were sold by Intesa Sanpaolo, which has helped us strengthen our presence on the territory. We are present overall in Italy, in all regions, and the market share in terms of branches is 7.5%. We are present in Lombardy, Sardinia, Emilia-Romagna, Marche and Campania, and then we have also our presence in other regions.

Now with the integration of these branches, we have now 4.1 million customers, 1.4 million are of UBI and then which added to those of BPER Banca. We have 18,284 employees, and we have 1,850 branches. In terms of volume, the growth was considerable. And in June, we will have to add the other 33 branches, which are not present in the results but have direct deposits of [ EUR 1.5 million ] and then loans, [ EUR 1.4 million ], and 134,000 customers. Moreover, in terms of employees, 5,100 employees, new employees, came into the customer and 3,500 actually agreed to the plan of Intesa. The numbers are very good, EUR 255 billion, the total funding, with a growth of 38%; net customer loans, EUR 75 billion, plus 42%.

Moreover, net profit increased to EUR 400 million, which reflects the contribution of UBI going concern and other one-off items: for instance, the badwill, plus EUR 781.5 million; goodwill impairments, minus EUR 230.4 million; integration costs, minus EUR 83.4 million; and additional LLPs, EUR 260 million, and so this EUR 260 million were additional LLPs.

The operating income of the period is EUR 757 million. Then what is interesting is that we have a component of services, which is kind of similar to all the other cost items. Now if we exclude the LLPs and NPAs, we have cost of risk, which is 222 bps.

Gross and net pro forma NPEs significantly reduced to 5.9% and 3.1% to the lowest level. However, we have to say that at the end of March, we have closed a part of the NPEs. Coverages are interesting. As you can see, they are at a quite interesting level. And NPEs coverage is equal to 49.5%. And you can see that UTP are covered at 42%. The default ratio has been decreasing for the past 5 years from 0.7 -- sorry, to 0.7% from 1%.

And the CET1 ratio fully phased pro forma at 13.4%. Liquidity, as you can see, is still abundant, LCR at 200%, which is well above the 100% regulatory threshold, and we have a buffer of almost EUR 29 billion.

And then let me very rapidly tell you something about moratoria on loans payment. Now in December, they amounted to EUR 11 billion. And at the end of the year, they went down to EUR 7.2 billion. And if we include UBI, it would be EUR 16 billion at the end of the year. Those active at the end of the year were EUR 8.1 billion. What is encouraging is that the bank at the end of April made some analysis, and the default are at 4%, which 2/3 of these referred to companies or corporate customers and 1/3 to retail customers. Now the companies with a worst rating from 8 to 13 account only to 4%. And so at the moment, we don't have negative signs or signals, but we are still monitoring this very closely.

As far as the additional LLPs, let me underline that out of EUR 260 million, EUR 170 million are due to adjustments that we had to do on Stage 1 and generic LLPs. And so this means that we are very careful to monitor any negative change by increasing masses and applying restrictive models. Stage 2 coverage moves from 1.9% to 2.4%. As to the state-guaranteed loans as at the end of December, there were EUR 3.5 billion. Now they are EUR 6.1 billion: EUR 4.2 billion for BPER and EUR 1.9 billion for UBI Banca. And this accounts for 6.7% and 8.1% of loans in December and March, respectively.

Now this is the overall situation. Let me hand you over to Roberto, the CFO of the bank, who will give you the details much more precisely and much better than me because I have just arrived here. So he will be able to give you very precise details.

[Roberto Ferrari, executive]

I'd like to thank the CEO. I'd like to be very brief. Let me tell you something about the method, first of all.

Now first of all, the transfer of the going concern had legal validity as of the February of 2021. And therefore, the March or the first quarter data cannot be compared to the first quarter data of last year. We completed the price per sale -- purchase allocation and that's an accounting difference of EUR 900 million. So here, we had some negative impacts on nonperforming loans of EUR 338 million, EUR 220 million positive on performing loans and then EUR 200 million on real estate. And therefore, the goodwill -- sorry, the badwill after all is EUR 781.5 million. We see that when we check the P&L.

Let me move to Page 7. I'll be very fast given also the hour. So the CEO has already told you how much total funding has gone up. Now total funding is EUR 252.2 billion (sic) [ EUR 255.2 billion ], 50% direct funding and 30% insurance funding. And you can see that overall funding is up [ 5% -- 9% ].

If you look at Page 8, you see the direct funding. EUR 29.4 billion from UBI going concern, which we -- in this case, when it comes to direct deposits or the current accounts, they amount to EUR 90.3 billion. And then you consider private or retail accounts from 59% to 62%. We have issued a senior bond -- social senior bond at the end of March with a targets of those.

If you look at Page 9, here, you can see something which is important, and you see the details of the UBI going concern. And as you can see that speaking of EUR 17 billion life insurance policies; AUM, EUR 42 billion; and assets under custody, EUR 82 billion. The asset under management adjust from 41% to 49%. And what is important is that the AUM has gone up by 69%, which has been overcome by bancassurance and life insurance. What is important is also the net growth in the quarter, EUR 776 million (sic) [ EUR 786 million ], EUR 610 million AUM and the rest life insurance. April is also a good month. It was doing quite well, and the refunding is -- continues its trend.

If you go to Page # 10. You see here net customer loans, EUR 75.4 billion, of which EUR 21.8 billion from UBI going concern, which you can see the details of in the slide. And then in the quarter, we have continued to issue loans also supported by state-guaranteed loans.

Talking about the measures of support by the state, let me move on to the next slide where you can see, as the CEO said, that moratoria amounted to EUR 16 million, including UBI. Total moratoria at the end of March is EUR 7.8 billion. No particular problems, so NPEs or nonactive moratoria. We have grown also on state-guaranteed loans from EUR 3.5 million to EUR 6.1 million, EUR 1.9 million are state-guaranteed loans of UBI.

Let's move on to Page 12. The quality of asset or asset quality, a very important slide, which testifies to the progress that we have done, also thanks to the contribution of UBI going concern but also the disposals that we completed in the first 3 months. And we also have a disposal completed in April, EUR 190 million, that we here put the pro forma data. Now you can see that NPE grows from 5.9% to 3.1% pro forma data. Our coverage is higher, around 50%, and 42.2% on UTP and 57.8% on bad loans. We have also increased the coverage of performing loans from 0.3% to 0.5%, considering the application of new risks where we have, in this case, used some prudence.

Page 13, we see here Stage 2, which includes also UBI, EUR 9.4 billion, 12% (sic) [ 13% ] on the total, and we have improved that coverage from 1.9% to 2.4%. Let me here underline that at the end of December, we were very, very prudent. The exposure to medium to high rating belonging to those industries that were very much affected by pandemic, hotels, restaurants, travels, transportations and entertainment, were classified as Stage 2, even though they did not show any sign of deterioration because we wanted to closely monitor these industries. And at the same time, we have increased the coverage on these assets.

Now you see the default rate, 0.7% here. We are benefiting from the effect of the support measures by the government. 0.7% is artificially low, but it is also the result of the attention that we paid on issuing and origination of loans. Cure rate and danger rate, they are positive, particularly positive on bad loans average recovery rate.

Slide #15, financial asset portfolio. EUR 26.4 billion worth is the value of the stock. We are trying and generate return on liquidity, which otherwise would be -- would generate a return of 0.05 in the European Central Bank. Italian bonds, testifying the diversification approach that we have always used in managing our financial asset portfolio, amounted to 41%. Considering we expect interest rates increasing, we have lowered our duration from 3 to 2.6 years, considering coverage, too.

I'm going to approach the end on Slide 17, profit and loss account. And here, you see what the Managing Director has already said, net profit of EUR 400 million. And we have extraordinary items, EUR 105 million, that include the costs related to the going concern integration; EUR 7.5 million relating to staff that has been moved to the branches that have been integrated on the 2nd of February; and EUR 65.9 million related to all the administrative costs, including taxation, EUR 11 million, that is under the administrative cost.

EUR 8.9 million related to RE amortization costs because, as you might know, real estate has been amortized to fair value kind of cost. Then EUR 260 million additional LLPs aimed at accelerating the derisking process. EUR 30.5 million that related to the profit sharing of CARIFE, following, again, the negotiations and the agreements dating back to 2012 -- or '17, sorry. And EUR 252.9 million that is broken down as follows: EUR 204 million (sic) [ EUR 230.4 million ], goodwill impairment with a neutral impact on capital; and minus EUR 22.5 million related to the different valuation of real estate. We end up with the temporary badwill that has to be added to the tax recovery on the Intesa Sanpaolo transaction, amounting to EUR 296 million. As we said, the profit before tax, net of one-off items, is equal to EUR 105.5 million, which is a good result, considering that the impact of the going concern acquisition covers only 35 days and not the whole quarter.

Net interest income, very briefly on Slide 18, EUR 343.5 million. EUR 291 million commercial; EUR 29 million securities portfolio, which clearly show a dwindling return; and EUR 31.1 million (sic) [ EUR 31.8 million ] is TLTRO contribution. As you might remember, end March, we had access to EUR 1.7 billion of TLTRO. The average spread is going down. It is not so much related to our commercial activity but is mainly due to our security portfolio that currently generates in part a negative return.

IFRS 9 and 16 contribution is falling, which we believe is most appropriate, because we have sold substantial -- or disposed of a substantial part of bad loans. Then you can see our breakdown of the net interest income in the quarter. Well, we can say that in line with the targets of our business plan, commissions on core revenues has increased substantially. We are getting close to more or less 50%. Then we see the commissions on life policies. And the banking commission, the federal banking commission, despite the impact of the pandemics and despite the impact of the restrictions that we also suffered from in this quarter, we nevertheless see a recovery of the commissions. Then net commissions, I've already mentioned this.

Let's move on to the next slide very quickly. The quarter was very good, especially because of the good performance of the commodity markets where we had increased our exposure and derivatives as well performed very well. We expect that interests have reached the record lowest levels in 2020, so we are going to see increasing interest in the long tail of the curve and an increase of returns.

Page 21, operating costs. As we already pointed out, EUR 546.5 million operating cost cannot be compared with the previous quarters for 2 reasons mainly: first of all, because the business scope has changed starting second of February; and then we have all the extraordinary one-off costs related to the integration of the going concern, and then we have additional costs related to the pandemics that we expect or we do hope will not be there next year. Cost to income of the UBI going concern is in the range of 50%.

And then on the following page, LLPs and other items. As our Managing Director has already commented on, I'm not going to repeat what he said. You see the contribution to SFR (sic) [ SRF ], EUR 32 million, which is based on the volumes of the [ Cassa ], so it doesn't include the acquisition of the going concern. As we said, the impact on the temporary badwill by the PPI process has already been mentioned.

So I move quickly to the end. As you can see, we have a very -- we have abundant liquidity, EUR 29 million of counterbalancing capacity. And then you see our deposits in the European Central Bank, and LCR is above 200%. NFR (sic) [ NSFR ] is well above 100%. So there's no issue whatsoever as far as liquidity is concerned. Again, in March, we fully made up the TLTRO funds with a clear, positive impact.

Then you see our Slide #5 (sic) [ Slide #25 ] on capital. CET1 ratio fully phased amounted to 13.42% with wide buffer versus the SREP requirement. 180 basis points is the net result of the period. Growth of the impairment -- of the goodwill, 41 basis points related to the FVOCI reserves and the real estate assets revaluated at fair value. We do not deduct DTAs anymore, so the shortfall has been zeroed down. We have a buffer, both with performing and nonperforming loans. Then we have witnessed an increase of our trading portfolio value based also on the derivatives that we invested on to speculate on the increase of interest rates. The impact of the going concern RWA amounts to roughly 50 basis points.

And I would like to conclude that with 3 main take-home messages. Despite a difficult set of scenarios that is still strongly impacted by pandemic, Q1 '21 results show a remarkable increase in the operating profitability underpinned by the integration of the UBI going concern that contributed to further strengthen the client base and the competitive position of BPER, as the CEO already mentioned at the beginning of the presentation.

The completion of the integration process, that took up much of our time. So despite this, we witnessed a strong competitive commercial momentum, which will strengthen our competitive position and will also enable us to contain costs. As is customary with us, because this is part of our DNA, we'll be focusing on the improvement of asset quality. And this is, as I said, part of our DNA.

Today, BPER is a stronger, a bigger bank, ready to walk along its clients in a new pathway of growth of the country.

This is it. Thank you very much for attending our conference call. The CEO and I are ready to take your questions. And of course, we have also our colleagues here with us who can take your questions.

[Operator]

[Operator Instructions] The first question is from Giovanni Razzoli, Deutsche Bank.

[Giovanni Razzoli, analyst]

A couple of questions. First, about the CET1. I believe CET1 is well above expectations and well above the guidance that you provided us with in the past. I would like to know whether you can provide us with the outlook for the end of the year, whether this 13.4% is a level that is going to be maintained or even improved before the end of the year. And Roberto, you mentioned that now real estate is no longer evaluated at cost but at fair value. What is the impact? You mentioned EUR 41 million, but it contains also the reserve of Italian govies. And then last question, EUR 260 million, which is the cost of risk one-off following the update of your policies, can you elaborate on the assumptions that you used? And then I wish all the best to the new CEO.

[Piero Montani, executive]

Mr. Razzoli, as far as the CET1 is concerned, we expect we'll remain at the current level and well above 13%. As for all the other questions, Roberto is going to answer them.

[Roberto Ferrari, executive]

Giovanni, so as for real estate evaluation, the net impact is EUR 86 million on capital. So the net impact on capital is EUR 86 million. And then about extraordinary adjustments or LLPs, well, this -- we have, first of all, updated the models and adopted a very conservative approach to growth. We have then changed the haircut policies to real estate. We have increased the time value to recover bad loans. And we have said, we increased the LLPs as far as the Stage 2 loans are concerned, considering our very cautious policies when it comes to migrate from Stage 1 to Stage 2.

[Operator]

The next question by Adele Palama, UBS.

[Adele Palama, analyst]

I have a few questions to ask. The first on NII, can you give us a guidance on the evolution of the NII in 2021? And then if possible, could you give us the contribution of NII and the fees of UBI going concern? And then the second question, about asset quality. Do you plan any other NPL disposal for this year? And could you give me a guidance on the cost of risk for 2021? And then another question about asset quality again. I'm referring to the moratoria portfolio. Can we have a breakdown between Stage 1 and Stage 2 of loans associated to the moratoria? And then can you give us an update on the tax rates?

[Piero Montani, executive]

I'll take one question only. As NPLs, the bank had foreseen to be able to dispose of another EUR 1 billion. And I confirm that this is going to be the target, the objective for this year, to dispose of a further EUR 1 billion of NPE -- or NPLs. Roberto?

[Roberto Ferrari, executive]

Well, as to the NII and the evolution for 2021, which means post acquisition of the UBI going concern, we expect a quarterly interest margin around EUR 400 million, if not above that figure. This applies to the group for the combined entities. And then as to fees and commissions, we expect the data around EUR 400 million. Operating revenues, EUR 850 million or above. As to Stage 1 and Stage 2, we'll work out the data, and then we will come back to you. Now as to Stage 2 of moratoria loans, in highest rating classes, those which are most at risk, the data is minus 4% or is below 4%, so very limited data. We have a prevalence high-risk ratings in -- sorry, we have the highest portion of moratoria in the low-to-medium risk rating. But there is not one industry which is more prevalent than other.

[Adele Palama, analyst]

Can I ask you a question about this? Can we also have the coverage on moratoria, the average coverage?

[Roberto Ferrari, executive]

At this moment, we cannot tell you this data, but we'll come back to you with this. And then the cost of risk for 2021, well, our expectation is to be -- around 75 basis points is going to be the cost of risk for the next 3 quarters of the year.

[Operator]

The next question by Andrea Lisi with Equita.

[Andrea Lisi, analyst]

I would like to refer back to the cost of risk in 2021. You mentioned the 75 bps on average. So is this core, the core figure for cost of risk? Or do you consider additional provisioning to then foster the disposal of NPEs? And then my second question, what about the systemic charges, the contribution during the year? And then in Q1, BPER had to bear substantial one-off costs following the integration of the UBI going concern. What about the rest of the year? What should we expect?

[Roberto Ferrari, executive]

Well, as for the cost of risk, it will not be impacted on by any other type of action. As for the cost, following the integration, let's say, the most of the costs were borne in the first part of the year. I'm not saying that this is it, but the remaining integration costs will not be of such a size or such an amount that would have such a substantial impact. We are going to have 33 new Intesa branches that will be integrated in June. So we are talking about a much smaller number of employees than the 5,000 employees that have already been integrated. So let's say, most of the integration costs have already been phased and borne, and the remaining ones will be much, much lower, of course, and they have already been factored in anyway. About the overall contribution in 2021 to the funds, roughly EUR 110 million. About one-off cost, our CEO has already answered, but again, it will be marginal or not a relevant figure.

[Operator]

Next question by Andrea Vercellone, Exane.

[Andrea Vercellone, analyst]

I have a few questions, different questions. So now talking about the 33 former Intesa branches that you are going to acquire in the second quarter of the year, now a couple of questions, do you have NPLs in these branches?

[Roberto Ferrari, executive]

I don't think so. I don't think -- let me answer this question first. No, we have no NPLs there.

[Andrea Vercellone, analyst]

Then can you give me the amount of masses that will be contributing in terms of loans, direct-indirect funding, so the flows that will be contributed by those 33 branches? And then if within the perimeter, you will record any badwill, net of any other PPA to be posted. So this is the first series of questions.

[Roberto Ferrari, executive]

Now as to flows, I think I said it.

[Andrea Vercellone, analyst]

Well, I do apologize, but I connected 5 minutes later.

[Roberto Ferrari, executive]

EUR 3.5 billion of indirect funds and EUR 3.4 billion of direct and then EUR 1.4 billion of customer loans. Now the badwill EUR 50 million. It's much smaller because we are speaking of a going concern, which is much smaller as to the 33 branches of Intesa.

[Andrea Vercellone, analyst]

Now another series of questions about the contribution of UBI for the number of days included in the quarter, 3 items: interest margin, fees and commissions and costs. Can you give me a management estimate of these 3 items? And then I have another series of questions.

[Unknown Executive]

Well, the number of days, which contributed, account to 37 days. And then as to the breakdown, I don't know whether we have the data here available or whether we have to number crunch and then I'll come back to you.

[Roberto Ferrari, executive]

Well, just a second, Andrea, we'll give you the preliminary data. Now profitability, it's a management data because it's not possible to break everything down. It's equally balanced between margins and commissions. EUR 35 million of margins and same amount for fees. Commissions, 50% direct fees and traditional fees. Costs, while you need to take into account of a cost to income between 50% and 55% on the revenues I gave you.

[Andrea Vercellone, analyst]

And then the last series of questions I have, if I may. I'm not interested in guidance for the year. What I'm interested in is whether you have an updated estimate. It was present in the prospectus, but a few things have changed. Now you see the business from the inside, not from the outside. Can you give me an updated guidance about the annualized contribution of the going concern including the 33 branches that will be integrated in Q2 for the very same items, margin of interest -- interest margin, commissions and fees and costs?

[Roberto Ferrari, executive]

Okay. Let me tell you that about -- as to profit EUR 160 million. As to the detailed items, I will have to be clearer. In a minute, I will come back to you in a second. Now considering everything, and let's normalize the quarter and then you can do the calculations accordingly, EUR 250 million of top revenues and the costs 52% more or less. And then you have to calculate the cost of risk with the guidance we gave you.

[Andrea Vercellone, analyst]

Now when you say top revenues, you are referring to margins and commissions here.

[Roberto Ferrari, executive]

I expressed myself not correctly, EUR 250 million per quarter, slightly less than that.

[Operator]

The next question from the English conference by Jean Neuez with Goldman Sachs.

[Jean-Francois Neuez, analyst]

I was actually about to ask the question on the guidance for the detailed line item for UBI, obviously, because of the partial consolidation over the course of the quarter. But I was just -- I just wanted to maybe refine this and try to understand if within those, the contribution that you think you're going to get, you have baked in any -- so the point is, of the guidance you just gave, do you expect this to grow from here and you develop those branches? Or do you believe that there will be attrition of any kind as compared to your existing client base or any of your customers where you might have overlap?

[Unknown Executive]

Well, we do hope that they're going to grow. I would not say there's going to be any overlap or cannibalization because we are talking about different geographical areas. So there's not going to be overlaps. Certainly, we do not spare efforts to try and fully integrate valuable asset, both in terms of the size of AUM and in terms of the number of employees. So starting tomorrow, let's say, I'll go and visit these branches, and I will -- this is all the main accounts as well. I will devote my time to meet each and every account. And this, of course, is to foster the growth of these branches and also to reduce to the minimum the number of layoffs. So far, as you may already know, the number layoffs has been marginal.

[Operator]

Next question by Hugo Cruz, KBW.

[Hugo Cruz, analyst]

Apologies, if this has been asked before but the translation is bit difficult. So first of all, can you give a guidance on the tax rate for 2021 and 2022? Second, on the cost of risk, I think you said that the cost of risk will be -- for the group will be 75 basis points. I just want to understand if that's for the full year or for the remaining 9 months. And third, I think you said that the annualized contribution from the UBI perimeter i.e., what is in there already plus the 33 branches, I think you said it'll be EUR 160 million. I just wanted to understand if that's after-tax or before because I want to compare with your previous guidance, which I think was for EUR 200 million before tax. And then you gave a run rate going forward for NII fees. It'd be great if you could also give that for OpEx again on a consolidated basis.

[Roberto Ferrari, executive]

Now as to the cost of risk, it's for the next quarters. The EUR 160 million we mentioned are net of taxes. Now as to the tax rate, we expect it to be between 20% and 25% in 2021 and 2022 to perhaps more close to 25% in 2022, this year at 20% closer. Of course, I'm referring to the next quarters.

[Hugo Cruz, analyst]

And the run rate for the OpEx, please?

[Alessandro Simonazzi, executive]

Just a second. Well, this year is going to be a year, as the CEO has said before, we had -- we are going to have some effect of the integration costs. So to speak, the year is a bit dirty from this point of view. But then through internal rationalization, we already have a perimeter of branch that we can simplify. We expect a minus result next year. I can't quantify this because I don't want to kind of make expectations on the business plan announcement that come be reduced.

[Operator]

Next question from the Italian conference call, Noemi Peruch, Mediobanca.

[Noemi Peruch, analyst]

I've got a couple of questions, in fact. So you have absorbed all the tax carryforward that you had on your balance sheet. How much do you expect to add back in your balance sheet in 2021 and 2022? Second question on the goodwill, what about the goodwill impairment in the quarter? And then on Page 12 of your presentation, I see that NPEs, after PPA of the UBI going concern, imply very low cost. Do you expect this cost to increase over the next few quarters? And then the final question, how do you expect your capital ratios to change in the rest of the year and in 2022?

[Roberto Ferrari, executive]

So headwinds, you're talking about headwinds. So we do not expect the headwinds neither in '21 nor in '22. Marginal impacts will be offset by the positive impact of the rollout that will involve the companies of the group. So we do not expect headwinds in 2021 and 2022 -- equity headwinds, I mean. As for the goodwill impairment, we impaired the goodwill of the going concern of UBI. So what remains is marginal. We do not consider the goodwill that we have in Arca SGR, which is more than justified by the good performance and the good profitability of Arca. Then your question also was about NPEs. Can you please repeat the question? I can't remember your question on NPEs.

[Noemi Peruch, analyst]

Well, you referred to UBI coverage.

[Roberto Ferrari, executive]

I'm sorry, coverage, okay. So UBI NPEs implied a 2-step process. First, the net NPEs of the past have become the gross NPEs today. So we had to use the same coverage that UBI had. Then we have applied the PPA, so we have applied a new fair value to NPEs, which is the disposal value of these NPEs. So the necessary coverage or the coverage we have has been approached with great caution. But UBI NPEs, as I said, through the SFR3 (sic) [ SRF3 ] and PPA have now a fair value. And we'll dispose of them in the next future, and we do not expect any loss deriving from such a disposal. As for DTAs, we do not expect to recover DTAs in the short term. We had EUR 110 million, EUR 29 million are left. Most of DTAs have been recovered, and this is what enabled us to announce the profit sharing with the authority. The DTAs that are not on our books are not expected to be recovered over the next 3, 4 years.

[Noemi Peruch, analyst]

If I may, I got a follow-up question on the capital. So you -- there were roughly 35 or 40 bps deriving from the model rollout on the former Unipol Banca going concern. So are you telling me that those 35 or 40 bps will be offset by the capital headwinds?

[Roberto Ferrari, executive]

That's right. That's right. We have already discussed it with the supervisory body. And considering the claims by UBI and by Unipol Banca, such claims will be consolidated. So it will take a bit more time, but this means that the regulatory headwinds will materialize early in 2022. So we don't expect any impact now.

[Operator]

[Operator Instructions] Next question, a follow-up question by Andrea Vercellone by Exane.

[Andrea Vercellone, analyst]

I just would like a clarification on the tax rate guidance you gave us for 2022. You do not have any longer off-balance sheet DTA. Why is the tax rate so low, 25%? Which is the explanation there?

[Roberto Ferrari, executive]

Well, we have some recovery on the AC. Well, it's a very technical aspect. And therefore, we'll have to come back, if you wish, with the data coming from our tax consultant. But this is basically the reason why we have a lower tax rates versus the normalized tax rate.

[Andrea Vercellone, analyst]

And if you were to give us an idea of when.

[Roberto Ferrari, executive]

Well, we have the AC and then we have a fiscal tax loss, and therefore, we are going to have benefits coming from the previous tax losses.

[Andrea Vercellone, analyst]

And how long is this going to last?

[Roberto Ferrari, executive]

Well, up until 2022. And then in 2023, we expect a tax rate which is going to be similar to the normalized tax rate.

[Operator]

The next question by Christian Carrese with Intermonte.

[Christian Carrese, analyst]

Welcome back, Mr. Montani. I would like to ask a couple of questions. First are tax benefits. Following the Intesa Sanpaolo transaction, I think you will also enjoy tax benefit. So I would like to know whether this has been the case. Second question about asset quality. Mr. Montani, you are well known as someone who has always been able to, again, rescue, let's say, banks, which is not the case of BPER, of course. But are you going to speed up the process to try and bridge the gap between BPER and the other major banks? So are you planning to dispose of NPEs in 2021, enjoying the current regulation that makes it possible for Banca to transform NPEs into GACS. And then I know you only recently joined BPER, but I would like to know from you whether you expect the banking industry should consolidate more in Italy.

[Piero Montani, executive]

Well, as for tax benefits, it was EUR 296 million, I believe we said. About the future, we are going to follow the route that the bank had already planned for this year, for next year, that considering that we are going to draft the strategic plan for the future, we are going to certainly factor in some areas of improvement. As for the market, again, the market is moving towards consolidation, which is inevitable. For the time being, I'm not able to make forecasts and to anticipate the future of this bank. I only joined 12 days ago. So first of all, I have to learn more about this bank, and then we'll see what the scenario is going to be.

Certainly, our main goal, our priority goal is crystal clear to me. We have acquired a number of branches that employs 5,000 employees. This means that we will have to focus on integration. Of course, we do expect these branches to grow. But the first thing we have to avoid is preventing them from declining, and this implies full integration immediately. This means that the bank has to change its way of working because we were able to face new clients and new needs. So this is our main priority that we'll be focusing on in the next future. Then should other opportunities, also from a tax point of view, materialize, then we'll certainly take them into consideration. But this is not our priority for the time being.

[Operator]

Next question by the English conference call is a follow-up a question by Hugo Cruz, KBW.

[Hugo Cruz, analyst]

Let's revisit your guidance on capital. So what I understood was for 2020, you think you should be more or less at the current level. And then I think you talked about some headwinds and tailwinds for 2021. Can you just repeat those again, please? Sorry, I meant headwinds and tailwinds in 2022, okay? Sorry about that.

[Roberto Ferrari, executive]

The negative headwinds that we have on RWA are made up of the positive impacts of the rollout of Unipol Banca and Gemini and then UBI Banca and then C.R. Saluzzo. In 2022, we do not have negative data. And in 2023, we shall have to see Basel IV, but we don't expect headwinds which may not be made up for by headwinds in 2024.

[Operator]

Mr. Montani, Mr. Ferrari, at the moment, there are no other questions from the conference call.

[Piero Montani, executive]

Well, thank you very much. We'd like to thank you all. And of course, we are here should you have any other request for clarification. I, personally, and all of the staff are always available. Thank you, and have a nice weekend.