Banca IFIS SpA
MIL:IF
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Banca IFIS SpA
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Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Banca IFIS First Quarter 2020 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Luciano Colombini, CEO of Banca IFIS. Please go ahead, sir.
Good morning, and welcome, everybody. Yesterday, the Board of Directors under the Chairmanship of Mr. Fürstenberg, approved the first quarter results.
Before going into the results and the impact of COVID-19, I would like to say that crisis is forcing us to anticipate some macroeconomic trends, which were already evident in last few months. We have to learn from current crisis and accelerate our investment in technology to manage our organization and our clients' [ digital ].
For example, in just a few weeks about 93% of our employees around Italy started working remotely. Additionally, we maintained continuous contacts with over 5,000 SME clients in April despite the lockdown. We strengthened our IT network in terms of security and protection, and we deployed a new digital platform for the issue government-guaranteed loans. For sure, we have to continue this innovative trend.
In addition, in the first quarter, we completed the disposal of Milan real estate asset with a pretax capital gain of EUR 24 million, and we issued a EUR 400 million senior bond. The reorganization of the NPL segment and the new digital platform for SMEs are proceeding according to the industrial plan.
I would like to move to Page 7. To review the monthly evolution of our results. In January and February, Banca IFIS results were in line with budget, with a net banking income of about EUR 43 million, EUR 44 million. In March, net banking income came in at EUR 19 million due to the COVID-19 pandemic. In March, [ due to COVID ], net bank income of NPL segment was down by EUR 13 million, of which EUR 9 million due to the shutdown of the courts and EUR 4 million is due to temporary suspension of hub collection. For completeness, we recorded about EUR 3 million lower recovery costs in the NPL business.
Judicial recovery and court injunction, foreclosures and order of assignment were temporarily stopped by the court shutdown. In extrajudicial recovery, we replaced some collection with phone collection. However, we must say that the court shutdown impacts only the time frame of the legal recovery process. For Banca IFIS, the impact is manageable as we are already have a long time frame of recovery, about 5.5 weighted years of average recovery time frame for acquired portfolio and about 7 years recovery duration new acquisitions. In addition, about 40% of order of assignments are in face of public employees and retired persons. So, are pretty safe.
In the commercial and Corporate Banking segment, we recorded lower credit demand. The key issue is asset quality in the coming quarters. We have identified the sector most impacted by COVID, and we will assess direct and indirect effects of COVID on each position detail. There is no clear metric to define which business are going to overcome this crisis. We regard high flexibility, low fixed cost and sound cash flows as key indicators.
And I would like to highlight that our outstanding portfolio, we have strong client, sector and product diversification. We have limited exposure to the sector more impacted by COVID, like tourism, retail sale or restaurant and EUR 400 million exposure in the case of public administration, which are relatively safe.
Noncore and G&S include write-off of about EUR 7 million, mainly on some NPL funds of former Interbanca and about EUR 7 million provision on 1 former Interbanca position. The result of our first quarter include the impact of COVID reasonably expected. It's possible that COVID-19 does not exhaust its negative impact on first quarter, but has further negative impacts in the coming quarters not foreseeable now in terms of time frame and amount. Even in -- the evolution of the emergency, the Board of Directors have a decide to suspend the economic and financial objectives included in the 2020, 2022 industrial plan, which will be reviewed and updated once the macroeconomic context stabilize. We expect to provide some highlights on the key financial indicators for 2020 during our first half '20 results presentation.
I will now hand over to Martino, who will describe the detail of our results, and I'll take the conclusion.
Okay. Thanks to everybody. I will keep this description very short, just providing the key messages, and then we will open to question and answer.
For me, let's start off on Page 10. As seen in the first quarter 2020, net income came in at EUR 26 million, including all the impact of COVID-19. Of course, the first quarter 2020 results include a pretax capital gain of around EUR 24 million, stemming from the disposal of our real estate property in Milan, which more or less offset the impact of COVID-19 million in the first quarter. Net banking fee income came in at EUR 106 million; operating costs, EUR 73 million; and cost of risk is at about EUR 19 million, including EUR 6 million loan of provision on a single position of former Interbanca.
Customer loans, EUR 7.6 million, minus EUR 0.1 billion quarter-on-quarter due to the decrease in commercial activity in all business units. Customer deposits down EUR 400 million at EUR 4.9 billion. And this is an adjustment that we did just to reflect the expected lower credit demand, and as been explained, to reduce our cost of funding. Remember also, we issued a EUR 400 million senior bond in mid-February.
The CET1 came in at 11.12%, which is 0.16% up quarter-on-quarter. I would like to highlight that the CET1 is calculating net of 2019 dividend, suspended in accordance with Bank of Italy recommendation and does not include the first quarter results.
I would like also to highlight that in the first quarter 2020 in nonperforming segment, cash collection came in at EUR 65 million, well above the P&L contribution of EUR 50 million, mainly due to the court shutdown in March 20. In first quarter 2020, the new issue of court injunctions so the precetto; the foreclosures the pignoramento and the order of assignments were temporarily stopped due to the court shutdown. The courts start shutting down in the last week of February and was progressively extended to the whole country by the first 10 days of March. So in March 2020, juridical -- judicial NPLs did not increase indicative value and providing very limited P&L contribution.
Also on our existing portfolio, we kept on cashing in. So something we like, we are not -- we did not enjoy the benefit of working out our existing portfolio. But we keep up on cashing in on the existing order of assignment and existing plans that we already have in place.
I will now hand over to the CEO for the conclusion, and then we will open to Q&A.
In conclusion, Banca IFIS has the necessary financial strength needed to face the COVID challenge. And particularly, CET1 of 11.12%, plus 0.16% quarter-over-quarter and cash reserves at EUR 1.4 billion, stable quarter-over-quarter. In the coming months, Martino and I will be available for video calls. We will also be taking part in the [ staff and government ] such meetings. So we are keen to meet you if you should so desire. And please open the Q&A session, if you like.
[Operator Instructions] The first question is from Manuela Meroni with Banca IMI.
Thanks for the presentation, particularly for having provided us with the figure for monthly basis. That is extremely helpful to understand the impact of COVID-19 on your business activities.
The first question is on Interbanca. I would like to know if you could share without the rationale behind the offer on Interbanca. Do you expect to generate synergies on revenues or costs through an integration with Credit Pharma? Or this is just an offer the claims to increase your presence in the pharmaceutical sector? Or maybe both?
The second question is on the cost of risk. In the first quarter, the cost of risk was impacted by the integration of a single provision. If I understood correctly, you didn't increase your net provision. So I'm wondering if you can provide the expense and the guidance from the cost of risk that you might have in 2020.
The third question is on capital. I would like to know if you expect to benefit from the SME supporting factor? And if you may quantify it?
And last, on the dividend. I noted that you kept the 2019 dividend deducted from the capital. So I'm asking you if you are confident on the possibility to pay it after October 2020.
I will say something about the cost of risk, but I'm not yet in the position to provide a forecast of the economic impact of the virus to companies, or we call it pandemic. However, I expect the cost of risk in 2020 will be higher with the simple annualization of the cost of risk of the fourth quarter. In other words, it may be higher than the cost of risk of the first quarter [back flow]. But we are not yet in the position to forecast exactly the cost of risk.
Speaking about Interbanca, we are still waiting for the decision of LCA. Obviously, this is a strategic investment. And we look at the integration with Crédit Pharma, and we have the ambition to be the first operator in pharmacy sector in Italy. But anyway, nothing is decided, and we are still waiting for the decision of LCA.
About capital if not [indiscernible] Martino, [indiscernible]
About capital. Let's say, for the SMEs supporting factor, we are not working on simulating the benefit effect, which, of course, can be important for us because we have a large portfolio -- large SMEs portfolio. We have not yet the results, and this will apply starting from June. So does not apply in March. I would like to ask to remind that the [ new proposal ] are modifying the [CRR] proceed and to expand the [ new support ] factor to operate the previous [ quota ] and the EUR 2.5 million, with a weight factor of [ 0.676 ] and a factor of 0.85 for its total greater than EUR 2 million, EUR 2.5 million. So an impact but positive impact, but we have still [ that to see ].
And on dividend?
Dividend. Luciano, would you like to...
Yes. Well, in accordance with Banco [indiscernible] recommendation of March, I don't remember -- if I remember well, 37 months on dividend policy. The Board of Directors decided to act responsibly by following the guidance provided by the supervisor authorities and therefore proposed that the distribution of dividend for 2019 financial year be postponed until at least 1st October 2020. Before to proceed the payment after this date, if no regulatory provision or recommendation of the supervisor authorities, will be issued against this. So we are confident to give dividend, but we have to wait and see what the supervisor authorities will say in the coming month.
The next question is from Andrea Lisi with Equita.
I have several questions from my side. The first one is on the relevant exposure. Now you have seen that in the first quarter, most of the additional loss provision versus previous year were related to the increasing coverage on a single significant exposure, I want to ask you how many significant do you have in your portfolios and both factoring and noncore, both in terms of numbers of many and exposure in terms of euro million? And which risk do you see on them?
The second question is on loan loss provisioning. It obviously takes again, the previous -- the question my colleague made before is with the exception of the single relevant provision you -- will increase the coverage, how many COVID-19-related provisions did you made in the first quarter?
The second -- the third question is on leasing. We have seen a significant drop in loans. I want to ask you if all of these effect is related to COVID-19? Or if you experienced also a slowdown in the previous months?
And then moving -- other question moving on NPL. You -- we have seen that in March, there is a drop in revenues, but my question is how was cash collection both in market? I think that if I have not understood -- if I understood well, you have already partially answered previous question, but also in April for what you have seen? And why did you acquire NPL in the first quarter? How are market conditions if there were some -- if you are experiencing some issues from the counterparties to sell NPLs, say, if all the processes are locked in, in this moment? And when do you think they can -- the market can reopen? And if you have received the direct access for loans with the state guarantees and for what amount?
And last question, I remember that in the business plan, you set aside -- you put extraordinary cost for the reduction of employees. I want to ask you whether this kind of solidarity fund will be postponed to next year? Or if it is likely that we will see it in this year?
Okay. Thank you very much. So I'll try to run through all the questions. And as we were, some of them just please -- if I run through all of them because I didn't take note, just [indiscernible].
In terms of, let's say, the first the net income exposure, I try to give a significant exposure, but I think that you can refer for our exposure on Page 17 of the presentation, where we highlight for sector by sector the breakdown of the portfolio.
In fact, also, for example, the position for which we had a problem was not so significant. Just we have several provision, EUR 10 million, EUR 20 million, EUR 30 million, not so big. But when they -- when one of these companies has a problem due to the size of that can handle, you can see that immediately. So this was the case of that former Interbanca completion in the first quarter results. It was not such a big position, I think EUR 20 million, EUR 30 million, some of this range. But for sure, you have -- when we have to make a provision, a significant provision in this case was EUR 8 million total, you can see the impact.
Then in terms of nonperforming, in the first quarter 2020, due to COVID-19, some NPL transactions were simply postponed by a few weeks. So we just bought EUR 50 million gross nonperforming -- gross book value nonperforming, but simply because there were not many transaction and many transactions were postponed. Of course, we confirm the interest in purchase nonperforming portfolio, and we are actively participating in all the ongoing disposal processes.
In the second -- just to give you a magnitude, in the second and the third quarter 2020, Banca IFIS expects -- or is already participating or expect to participate in about EUR 1.5 million, EUR 2 million NPL disposal costs. We are interested, but we will discipline on acquisition price.
Then in terms of how is our commercial activity. In this case, we continue to responsibly plan to qualify customers. We had about 300 new customers just in March and April despite the lockdown. I would like to stress that 50% of Banca IFIS clients are open during lockdown because they operate in critical sectors, as defined by law. And during the lockdown, we kept contact with the majority of our clients. Of course, we will focus on SMEs with good ratings and -- or that due to specific or size of provision are not well covered by that aspect. We expect strong competition on good middle-size company, but we expect also that our market niche will remain or still be profitable there. Also, we expect a high demand and exposure towards NHS public administration for Sistema Sanitario Nazionale. Currently, we have about EUR 400 billion exposure -- sorry, EUR 400 million exposure towards the NHS public administration, which we can consider less safe in this moment.
Regarding the state guaranteed loans, yes, we are using them. As you were saying, we just need to develop an online platform to facilitate the clients. We offer moratoriums and this is by banking authority and by the Decreto Cura Italia. On 30 April, we approved about 18,000 moratoriums with about EUR 100 million is government postponement. We offer also guaranteed loans ex Decreto Cura Italia and ex Decreto liquidità. You have to consider about 60% of that is clients are including definition of SME and the loan decree.
Regarding the [indiscernible]. As the CEO was saying, we have suspended the objectives including in our 2020, 2022 industrial plan. We will disclose the time frame of our solvency fund once we have updated our financial position. We have some flexibility of this item, and we want to exploit it. It is not yet defined. We are assessing the impact on COVID-19 and we will act accordingly.
In regarding -- I don't know if you have one question also on the cost of risk.
Yes.
The cost of risk we don't provide the guidance. Maybe we will provide, let's say, in the coming quarters. However, you may expect that the cost of risk in 2020, in the whole year will be slightly higher than the simple annualization of the cost of risk in the first quarter 2020. So in other words, it may be higher than the cost of risk of the first quarter 2020 multiplied by 4. I don't know if I missed any question.
No. There was another point on loan loss provision related to COVID-19. If in the quarter with the exception of the single increase in coverage on the relevant position, we have other loan loss provision for COVID-19-related exposures? And on only that.
No. The COVID-19, and I would like to stress in terms of asset quality, that EUR 7.6 million on a single position. So the companies who are already in trouble and went definitely bad. Plus we had a write-off on EUR 7 million on some nonperforming -- many concentrations on nonperforming banks of former Interbanca. You [indiscernible] where Europe -- France had been nonperforming so that -- and are managed together many companies. doing this way. Okay?
Excuse me, Martino, let's say that this position is a retailer that had to shut down all the shops, 190 shops. And obviously, the situation came and it was -- and so the position became absolutely critical, but it's really something that is strictly related to COVID. But we don't think that we have other big position, disposition, so close -- so closely related to COVID because we are not invested in the sector impacted by COVID as I said in the presentation.
Just Andrea, just to come back to your question. We -- at the large consolidated risk. We are speaking about -- because the Republic of Italy and government exposure due to BTP and bonds and agent -- the tax collection agent in Italy. And so this is -- are the large risk. Just to mention, so it's not disposal that we have significant -- so I was speaking about EUR 100 million. What you see the impact of this position with 20 30, I repeat 20 30. So the exposure that is are mainly Bank of Italy, the Republic of Italy and the agency of Italy, these are the 3 large exposure according to the -- of our consolidated vigilant report.
The next question is from Simonetta Chiriotti with Mediobanca.
Well, most of my questions have been answered, but I have -- I would like to have from you a bit more color on 2 things related to NPLs. First is the trending on pricing. So you said that you are interested in buying more assets. How is the price environment at the moment, also considering the difficult context that we are in?
The second point is on the court shutdown. This had quite a big impact on your accounts in the first quarter. How do you see this evolving? I mean, when do you think that this situation will improve and finally normalize? I suppose that April was like -- and worse than March. Do you see anything changing in May? So which is the possible evolution of this important driver of your profitability?
Thanks, Simonetta, for your question. But first of all, the nonperforming, I would like to say that it's very difficult to make an average and assess the price of the nonperforming because there are so many different types of nonperforming. We discussed -- let's focus on the unsecured NPL.
In our segment price, we expect a slight decline, probably quite low, let's say, in the range on an average of 10%. Then of course, this category can vary a lot because if you look at, for example, a loan against a public employee or a retired person has not changed significantly in value. And in this case, you are basically very limited, very, very limited, 2 percentage points merely increase in that, but while the exposure towards other debtor may have changed more significant. So you can say the 10% also. And this is mainly also due to the time frame in recovery.
But I would like to stress in our portfolio. First, we have a very strong diversification, 1.3 million borrowers. So unless there is a double of the, let's say, unemployment rate, we can sustain that. Then we have a relatively long time frame of recovery already. We expect that we price an average time frame of recovery is 7 years. So hardly in a few months does not change much.
We have 40% of our quarter of assignments towards public employees for retired persons. And these are there.
So in conclusion, the court shutdown impacts the time frame of recovery, the time frame of legal process, but remind that borrowers are still legally bound to their payment obligation. Other nonperforming categories may have had higher decline in price. But clearly, you have to go case by case, collateral by collateral and type of nonperforming by type of nonperforming. You cannot make a very simple average.
In terms of the court shutdown and the price and the impact of the COVID-19, let's say that in the first quarter, and I remind that the key slide which is Slide 7, that the CEO described it before will show you 3 -- the monthly evolution. We had EUR 13 million decline in our NPL segment, of which EUR 9 million in judicial recovery due to the court shutdown and further EUR 4 million in extrajudicial recovery, simply because our home collection was temporary suspended. But in this case, of course, we are quickly able to move to phone collection rather than home collection and try to preserve it.
We had also some lower recovery costs of EUR 3 million. For net, the impact was about $10 million. I would like to stress that in the month of April, probably, you should expect more or less pain impact because courts are closed and the home recovery is temporary suspended. But in this month, our servicing business, capital working. So we have -- we kept on moving. We have a lot of precetto, which is the first phase already done. And we will deploy it to the court as soon as they open, we have started doing that. So I would like to stress that the company didn't stop and kept on working in this time frame, actively, as the CEO was describing before.
And in sum, I would like to stress the impact of the COVID-19. So EUR 13 million on the nonperforming, EUR 9 million in judicial, EUR 4 million in extrajudicial. Of course, EUR 3 million less in recovery cost, then EUR 15 million in our corporate and commercial banking, of which EUR 7 million mainly due to a write-off of nonperforming and EUR 7.6 million on that single provision former Interbanca. In addition -- so this more or less match the impact on the capital gain [indiscernible]
In this number, it's not included the further impact that we have in our factoring, leasing structure finance on all the other commercial activity, which are slightly difficult to estimate. But we have also some impact over that. I hope that I answer to the question.
The next question is from Christian Carrese with Intermonte.
The first question is on NPL division. We saw for the first time since June 2018, the actual cash repayments were lower than the expected repayments. Do you think this trend could last for, let's say, next couple of quarters? And what does it mean for your internal model? I think I would like to understand if there could be an impact on net interest income or also on your all NPS portfolio. So there is any risk of impairment on your existing portfolio?
And in terms of purchases of NPL, you've provided some guidance on last CMD. I know that you're going to update the plan later on, but maybe I read on the newspaper a few weeks ago that you were going to confirm your guidance in terms of NPL acquisition. If you can elaborate a little bit on that?
And the second question is on, let's say, cost of risk or, let's say, ex Interbanca loan book, we saw in this quarter some negative impact, both in terms of trading. So some impairments on funds. So if you can give us some indication on this factor. I presume you sold some NPLs, but you bought some stake in the funds -- specialized funds in NPLs. So if you can elaborate a little bit on this?
And then for the -- in terms of TLTRO. Let's say, if you can tell us the maximum TLTRO take up, take care of [indiscernible] capital? And how much is today that can go to take up? What could be the impact in terms of net interest income?
And finally, on FVOCI reserve. If you can give us an update on govies portfolio reserve as of end of March and up to today?
Okay. I can -- I don't know what's happened. Sorry. I will run through these questions. And regarding the nonperforming -- the chart of the nonperforming that you noticed. That is correct, it's on Page 22. On Page 22, it shows that the impact of our cash repayments were substantially in line with our internal modeling. Why? Because of the COVID-19. We described it before that the home collection was suspended. We described before that we have some -- experienced some delays in the courts, okay? So I would like to stress that this is niche in my view, so that we are quite prudent in terms of modeling. Because even due to unexpected things like a COVID-19 we recover as much, we have a cash recovered in line with our internal, of course. So in a moment of stress, we have cash recovery in line with our internal model. This -- we have to see the evolution going forward. But as soon as the courts will start back -- will start and be opened and will proceed also, you will see a benefit in that, a benefit in terms of the cash recovery increase and the cash repayments. And you can also see probably as soon as we can restart the home collection, which were temporary suspend and replaced with phone collection, which is less effective.
Then if you ask me if this trend is going to continue in Q3 and Q4, probably not with this significant market. Okay. And let's say you expect a significant slowdown, then this depends a lot on the macroeconomic assumption that we are in.
In terms of nonperforming acquisition, we -- of course, we aim to continue. We expect further production in the market. There are transaction in the market, which we are looking at currently. Of course, we are disciplined in price in this moment. The COVID impact also impacted some -- in Italy some organization process in terms of the nonperforming disposal on the asset disposal that they were doing.
And in terms of the write-offs of the funds, you are right. There were -- there are funds which we contributed some Interbanca acquisition, which are in the range of EUR 20 million, EUR 30 million exposure, we include Interbanca and in order to be managed collectively as many other banks did. As prudently, as these are already some trouble with each month that they are nonperforming [ CPUs ], we perform our write-offs due to COVID-19. As soon as we saw a deterioration, you can see us as a prudent write-off in terms of -- due to COVID-19. [indiscernible] the COVID-19, we had the impact -- sorry?
Sorry. On the EUR 20 million, EUR 30 million exposure, this is the net exposure after the write-off done in the first quarter?
No, this is -- no. The total exposure of this fund is between EUR 40 million and EUR 50 million.
EUR 40 million and EUR 50 million. Okay.
I tell you that there are some exposures which we contributed to this fund, okay, is not a matter. And the total exposure that we have in our balance sheet following this exposure is between EUR 40 million and EUR 50 million, okay, following this provision write-off.
And of course, when you're contributing this fund, you contribute your loan, but usually, the fund manage position which are of a niche, not this only -- sorry, fully owned by Banca IFIS, but it's a pool of loans of nonperforming towards a single debtor that contributing a fund, which are usually of medium/large size. In this, we have, let's say, generally, a limited exposure, let's say.
In terms of the TLTRO, we have -- we had an exposure in the 30th of March of about EUR 800 million.
In the context of our liability -- let's say, treasury and liability management, we may consider to increase this exposure. But to the management of our treasury benefit also from, let's say, but -- and the investing in short-term government bonds. We have a government bond portfolio, which is -- which we plan also to slightly increase and -- but mainly focused on short-term maturity. So the maturity is matched with the duration of TLTRO is done for maintaining a level of liquidity.
And so if we acquire government bond, we are speaking about, let's say, 2 years maturity, not more. And in terms of the exposure, it doesn't go into P&L, but it goes both in -- it goes into the capital. And the negative reserves in govies is about -- is at EUR 10 million at the 30th of March and EUR 29 million as of today. Remember that the govies are at a maturity of 2 years. So we start right from the very short term. Okay?
Sorry. Was EUR 10 million as of 31st of March, minus EUR 10 million and now is minus EUR 29 million?
Yes, minus EUR 29 million. Correct.
Okay. And the maximum take up [indiscernible] take up, please?
We don't have -- we are analyzing that. We don't have yet a number, okay? We don't have yet the final package, but we may increase. I can tell you that at the 31st of March was EUR 800 million. We may increase in the context of our treasury and short-term cash management, but if with matching assets and liabilities. So if, let's say, that the proceeds will be invested in -- the TLTRO is short term, we will invest in short-term common bonds or other bonds, but with a duration lower than 2 years.
Okay. If I may...
I would like to come back for minute to NPL purchasing. I'd like to confirm that we are investing in purchasing new NPL portfolios. And you see that there are some interest in the disposal process, and we are a participating in all ongoing process. The prices are obviously a little bit lower than a few months ago. We reviewed our internal model, and we are confident to be able to buy at the right price. And we want to stay in this market, and we confirm the forecast of about [ 2 billion and 700 million ] that we have exposed in the industrial plan. So I'd like to confirm that we are present in NPL market also in this difficult moment.
If I may, Mr. Colombini, just a final question for you on the -- what do you expect in terms of NPL evolution? I mean, we know that the moratoria will finish on the 30 of September, there be -- there could be a rollover. But in general terms, do you expect NPE stock to pick up in 2021 rather than 2020?
Yes. So we are -- yes, we expect a growth of about 7% of the stock at a little bit less disposal because of the -- not the big business, but some foreign fund is less interested to work in Italy. So we see an increase of the stock and a decrease of disposal. But anyway, this remains an interesting and very active market.
Yes. And I was referring to your own loan book. In terms of the factor in the other business, do you expect the peak of the prices in terms of NPE increase will be in 2021 rather than 2020?
On our book. On our book.
Yes. Yes, that's on your book. And in terms of cost of risk, do you expect higher cost of risk in 2021 or in 2020?
Well, as you said, moratoria in 2020 will help us in terms of new NPLs. And maybe that in 2021, the cost of risk will be a little bit higher than in 2020 because of moratorium, which is something that shows the effect in 1 year time.
Sorry, can I add one more line? To just complete one question before. First of all, we have at the first -- in terms of TLTRO, sorry again, we had EUR 800 million at 31st of March. We can take up to EUR 2.5 billion, which is not -- which this doesn't mean that we want to do. We can, okay?
In terms of government exposure, we have slightly increased. I said that the negative reserves at the 31st of March was EUR 10 million, and now it's about EUR 29 million. This is also because starting from the 31st of March, we had increased by a few hundred million our investment in government bonds. So it is just a way where we find ourselves in a quite cash reach, and we invested it on managing liability and funds, okay? So don't -- we don't go on the upper side of the curve after 2 years. We slightly increase the investment we did in -- starting from the second quarter -- starting from the -- from March in our investment in the government portfolios.
[Operator Instructions] Gentlemen, there are no more questions registered at this time.
Thanks for everybody to attending. As the CEO is always saying, we will be available for any questions and any follow-up after this call. We will attend the [ STAR ] conference and the Goldman Sachs conference retrospectively at the end of May and at the beginning of July. We'll be keen to meet you there, if you like.
Thank you very much. Bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.