Good morning, ladies and gentlemen. Before I hand over to Magda Palczynska, Head of Investor Relations, a reminder that today's call is being recorded. Madam, you may begin.

Good morning and welcome to UniCredit's Third Quarter 2022 Results Conference Call. Andrea Orcel, our CEO, will lead the call. Then Stefano Porro, our CFO, will take you through the financials in more detail. Following Andrea's closing remarks, there will be a Q&A session. [Operator Instructions] With that, I will hand over to Andrea.

Thank you, Magda. Less than 18 months ago and 18 months into UniCredit's evolution, we are already a transformed bank. The new UniCredit is a group set up in the right way with a unifying vision, a differentiating strategy for profitable growth, delivering a clear industrial plan linked to financial KPIs and the strength to face the future with confidence. The results I'm about to present to you are further evidence of this new UniCredit and support our ambition to set a new benchmark for banking. Today, we are announcing the seventh consecutive quarter of year-on-year growth and the best 9 months result in over a decade. These excellent results well above UniCredit Unlocked targets were achieved while continuing to significantly further strengthen our balance sheet and notwithstanding the significant rate related adverse one-off P&L impact of TLTRO this quarter. Our accounting methodology which drove this will benefit us in the future, particularly in 2023. We are refocusing our organization around our clients. We're empowering our banks while bringing them together through common content and technology that we're both making best-in-class, all are underpinned by our unifying culture. Our operational effectiveness continues to improve as we redesign and simplify our processes, streamline our internal and external organizational structure and render the way we operate more efficient. All this translates financially into the optimization of our 3 key financial levers to achieve best-in-class, sustainable, profitable growth and organic capital generation to underpin distributions. In a time of uncertainty in Europe, our results have been consistent quarter after quarter and has been our commitment to continue strengthening our balance sheet. And whilst we cannot predict the future, we can continue to improve our operational performance and strengthen our already robust lines of defense. We have built an organization that can withstand most scenarios and that is able to turn uncertainty into opportunity. UniCredit Unlocked continues to be the right plan for us and we will not deviate. Let me turn to Slide 3. Our vision is to be the bank for Europe's future and set a new benchmark for banking. What do I mean by that? The bank for Europe's future is one which delivers for all its stakeholders, a bank that is a constant for its communities, putting clients at the center of all we do, one that delivers best-in-class returns and capital generation for its investors sustainably. One that unites and inspires our people with a common culture and that gives them the tool they need to win and be the best they can be. We will continue to raise the bar and strive to outperform our own targets. We will work to help all our stakeholders succeed because their collective success is not only UniCredit's success, it is Europe's success. Let me turn to Slide 4. This strategy has 4 key components which combined, deliver a total new approach underpinned by key initiatives designed to generate alpha. The first is the withdrawing of our organization around our clients putting them firmly back at the center. This unlocks the net potential within UniCredit, born from our 15 million strong client base which we are determined to grow served by our now empowered 13 leading banks and our diverse talent base. The second is the consolidation of our product factories and are making them available to all of our clients rather than a selected few. Each one of these factories is focused on attracting top talent and enhancing their offering also through the creation of an ecosystem of partners which also gives us reach to an increased client base. Thirdly, we are positioning our digital and data offering to be a key enabler of both our client experience and our people. We're taking back control of core competencies and where possible, are leveraging our scale. As we're doing with our factories, we're also complementing our internal capabilities through the build-out of partnership with best-in-class partners. And finally, the glue that binds all of this together and makes it all possible: our culture. We're striving to unite our 82,000 people behind a set of common objectives, behaviors and values, a true differentiators and linchpin in ensuring that we deliver on our ambitions. This is the most difficult part of our transformation and the hardest to replicate for anyone. Let me turn to Slide 5. The execution of our transformation started on day 1, well before we announced UniCredit Unlocked. Since then, we have built a new leadership team, focused and equipped to support and drive this transformation. We have reshaped our group structure and are significantly advanced in the simplification of our processes and tasks. This is making us faster more efficient and laying the foundation for digitalization. We have redefined roles with clear accountability, motivating our people and empowering them within a clear risk framework. We're building a best-in-class product offering with 2 product factories strengthened by a dynamic ecosystem of external partners. Our partnership with Allianz, the turning of a stagnant contract into an innovative collaboration with alignment of interest is a perfect example of UniCredit Unlocked executed. Expect more of that. To match the change in pace and focus of this business, we have hard key experts and promoted internally our talent to better deliver on our ambition and serve our clients. We're consistently and progressively driving our technology transformation. While this will not be an immediate visible change, we're making progress as planned. We have assessed our capability in technology and are moving away from the outsourced model that was holding us back. Our own competencies are being brought in-house and complemented by the hiring of new talent so as to really drive progress in the development of a truly global data platform and cloud journey. All these steps contribute to the formation of an organization, enhanced through optimized digital and data processes that are central to the evolution of UniCredit. They also have helped us to achieve structural cost reduction, creating agility and efficiency but will allow us to reap ongoing benefits in a highly inflationary environment. And finally, the core part of this industrial plan has been the embedding of our principles and values in everything we do. The development of a culture embraced by all our people a culture that is our strength and distinctive value. It ensures that we lead by example when it comes to ESG, both in our targets but also in the social initiatives and proactive support that best serves our client and community as they navigate both financial strain and the increasing pressure from the energy crisis. Let me turn to Slide 6. As such, we further improved both our operating and our capital efficiency. This was achieved despite 3 items: one, further buildup of our overlays by circa €300 million to €1.3 billion. As I will explain later and Stefan will as well, we are maxed out on our specific provision as per model in this scenario. And so these overlays are constituting a buffer or cushion for increased cost of risk in the future. Two, a €313 million negative P&L impact from TLTRO that together with what we're doing on overlays will be benefiting us in the future. And three, absorbing 22 basis points of capital impact from regulatory headwinds. With respect to TLTRO, our accounting methodology, determined a hit to our NII this quarter due to the interest rate increase. I'm going to refer to the results adjusting for this impact only on selected items. Be aware that Stefano will take you through, excluding the impact on TLTRO, our gross revenues would have increased significantly more and net profit would be up 52% quarter-on-quarter. For the 9 months, gross revenue also would be up significantly more and our net profit would be up 57%. For a full description of the impact on a line-by-line basis, please refer to the Annex on Page 35 of the market presentation. However and this is important, depending on the decision of the ECB tomorrow, we may recognize up to €1 billion of increased NII benefit from TLTRO accounting in 2023. With respect to fees, they're up 4% for the quarter and 5% for the 9 months. However, correcting for CRM which we will detail later, i.e., the hedging of rates, FX and commodity risk that we provide our clients and our clients, both corporate and individuals, the increase in fees would be significantly higher. Moving to capital. Our CET1 landed at 15.4%, stable on the quarter pro forma for the second tranche of a 2021 share buyback and 2022 dividend accrual. Thanks to 42 basis points of organic capital generation this quarter, again, well ahead of plan. Once the buyback is completed, we will have fulfilled our commitment of a 2021 shareholder distribution of €3.75 billion. The momentum in our 2022 results, the organic capital generation above plan and the continued strengthening of our balance sheet, create a solid base for distribution of at least the same as for 2021 and 2022, obviously, pending Q4 dynamics, supervisory and shareholders' approval. Our return on tangible equity was 11.4% in the quarter or 13.6%, correcting for excess capital at 13% CET1. In summary, this quarter underpins our best 9 months in over a decade, with net revenue up 9% and cost down 3% and pre-provision profit up 15%. Net profit grew 49% on the 9 months as we delivered €4 billion, excluding Russia; and €3.8 billion on a fully consolidated basis, including Russia. These are above our full year target -- our full year results for 2021. Further, we generated 158 basis points of organic capital generation. This is above our full year UniCredit Unlocked ambition. All despite a one-off adverse NII impact from TLTRO of over €300 million and the continued buildup of prudent overlays in excess of our specific provisions. Most annualized indicators are running at our UniCredit Unlocked 2024 targets as our challenge now evolves to defending the achieved position amidst a new macro backdrop. Let's turn to Slide 7. This financial performance is replicated in both client solution and each one of our regions. We have separated our corporate and investment bank into factories, composing client solution. Providing content to all clients of our 13 banks and the coverage of those clients now firmly in the hands of those 13 banks. This has seen client solution pursuing a more bespoke approach ensuring that our continent products are tailored to serve all of our clients in the best way possible. Our factories are one of the key engines of our transformation. They link our bank together, driving high-quality revenue difficult to be replicated by our local competitors in most of our markets and currently account for 49% of group total revenues. They have grown broadly in line with total group revenues, notwithstanding headwinds on funds and portfolio management fees from volatile market. This is due to a much more diversified fee pool but it's only in part accounted in fees as client risk management is up 24% quarter-on-quarter and 14% on the 9 months to over €250 million and is currently accounted in trading. This is what is driving a lot of our trading gains. We're improving and reducing the fragmentation in our offering. We are hiring both external products expert in our factories and more specialists and talent in our 13 banks locally to advise clients, including almost 1,000 people in Italy and circa 270 people in Germany. The changes are manifesting themselves in significant top line growth as a result of clients appreciating our refocusing on their needs and our ability to support them. Let me turn to Slide 8. Our Italian franchise, in many ways, the heart in our business has built further on its already strong performance. The change in management, the refocusing and delayering of our organization structure and the steps taken to bring the client closer to those that can truly serve their need is already to start paying dividend. Performance has remained excellent across all 3 levers. We continue to grow profitably and improve our operational and capital efficiency, delivering a pretax profit of €2.9 billion, up 32% year-on-year. As an aside, our net profit in Italy has increased more in the last few months than any value we could have created from any M&A. Our RoAC is at now 14.3% together with almost 100 basis points of organic capital generation for the first 9 months. Such results have been achieved in spite of 4 headwinds. The first 3 of which will repay us in the future. These are: one, continued investment in the business; two, a substantial NII impact from TLTRO; three, significant further buildup of overlays and a drag on our revenues from our capital efficiency measures. We would like to underline our continued focus on quality rather than volume and on revenue growth. Our responsibility to provide tangible support to our clients and community was again demonstrated through the launch of our Per Italia [ph] offer which proactively delivered bespoke financial solution for our retail clients and most corporate struggling with the uncertain external environment. We will hold firm on this course. Let me turn you to Slide 9. Our business performance in Germany continue to show strong positive momentum. We deliver both strong commercial quality growth and impressive operational and capital efficiency as we redesign the way we operate. 12% RoAC at the 9 months is well above the cost of equity, benefiting both from a 9 percentage point improvement in our cost-to-income ratio, a healthy organic capital generation of 26 basis points and delivering a pretax profit of €1.4 billion, up 43% on a strong year-on-year last year. As for Italy, such result have been achieved in spite of: one, continued investment in the business; combined with two, NII headwinds from TLTRO; and three, a further buildup of overlays, all of which will repay us in the future. And we should add a drag from our capital efficiency measures on our revenue line. We would like to underline again our continued focus on quality rather than volume, revenue growth. Our client penetration remains strong as we look to grow profitable quality market share. The value add that we bring over and above more traditional investment banks was demonstrated through our appointment as joint book runner on the Porsche IPO, positioning our German business as the go to regional bank for the execution of complex transaction. I would add here that the energy and impact of our Italian network in distributing this transaction was remarkable, exhibiting both the partnership between the 2 countries and the power of our cross-border franchise when steered in a united fashion. We continue to focus on supporting our communities and embed sustainability across our German business. Let us now turn to Slide 10. Our CE region provide the dynamism and innovation, a powerful complement to the rest of our franchises. Central Europe has delivered the strongest net revenue growth, combined with impressive operational and capital efficiency, digitalization and simplification enabled check and hungry to offset significant inflationary pressures, while the redesign of the way we operate benefited Austria. The region delivered a pretax profit of €1.1 billion, up 34% year-on-year, a 15% RoAC at the 9 months and substantially contributed to the organic capital generation of the group with all countries pulling their weight. Central Europe has made progress on embedding sustainability across the business with example of both social and environmental product launches this quarter. Now on to Slide 11. Eastern Europe has delivered a strong net revenue growth leveraging on resilient transaction and banking service fees and sound volume growth. This was accompanied by good cost management partially absorbing inflationary pressures, resulting in a cost/income ratio of 41.4% for the 9 months, the lowest of all the regions. NPE ratio was reduced to 1.7% with coverage improving by 4.9 percentage points as we continue to strengthen our balance sheet. Eastern Europe delivered a pretax profit of €700 million, up 20% year-on-year and the highest RoAC of our regions at 20.7% for the first 9 months. During the quarter, we acquired an 11.72% stake in Zaba, bringing our shareholding to just above 96%. Finally, Eastern Europe has made progress in developing its ESG product this quarter, including active participation in state programs and schemes to support the local economies. Let's turn to Slide 12. Given the extent of our transformation, the step change in our pre-provision profit, combined with our coverage prudence and the decisive actions already taken, we are confident we can face the uncertain future and deliver on UniCredit Unlocked in most expected future scenarios. We are realistic about the potential macroeconomic impacts on our footprint. Our assumptions remain conservative and sensitive to developments. In UniCredit Unlocked, we assumed an average annual cost of risk of around 30 to 35 basis points. This is about €1.7 billion per year. One lens through which we can look at the future is to consider those things that are incremental to our original UniCredit Unlocked plan that could provide us with a buffer or an offset to an increased cost of risk should the macroeconomic environment deteriorate. We call this our cost of risk absorption capacity. In a mild recession scenario, our transformed pre-provision profitability, healthy portfolio and the impact of rates increase mean that we would be able to absorb 30 basis points higher cost of risk or double what we had planned in UniCredit Unlocked without impacting our ability to reach our targets. Our significant overlays, combined with our NII benefit from higher rate environment and from TLTRO, subject to the ECB decision tomorrow, would give us an additional buffer of up to 60 basis points above UniCredit Unlocked, allowing us to absorb a cost of risk close to 3x that of a plan before impacting our ability to meet our targets in a more stress or extreme recession scenario. To be clear, that means that in a mild scenario, the first 3 levers would allow us to absorb the extra cost of risk. The next 3 levers or 2 levers, depending how you count, would be potentially a net benefit on the result of 2023. In the extreme recession, all the levers would play to maintain unchanged or to absorb a cost of risk that is 3x what we had in the plan. In the unlikely event on an even more -- in the unlikely event of an even more extreme recession scenario -- to our extreme recession scenario, we would then start theoretically eating into our organic capital generation and then our existing capital buffers, both of which our top tiers versus peers. This is why we are prudent and confident, vis-a-vis, the future. Let me turn you to Slide 13 and give you more detail. When we look at key differentiators between UniCredit of today and the one of the past, our step change in pre-provision profitability, quality and capital efficiency of our revenues and cost income ratio are key. This is a structural shift supported by alpha-driven actions as demonstrated by the key metrics in front of you. We have substantially increased the lapse absorbing capacity of our pre-provision profit. We are addressing LLP's volatility via preemptive overlays which are included in our LLPs above and beyond our specific provisions which are currently maxed out. Now to Slide 14. Our asset quality is superior due to years of proactive action. We have a high-quality loan portfolio to start with due to our consistent discipline in underwriting as evidenced by our 1% exposure to high-risk sectors, circa 80% investment-grade exposure and historically low default rates. NPEs have been reduced to 2.8% and are composed mostly by UTPs, so are better quality. We continue to provision conservatively above and beyond our specific provision and preemptively manage our new exposure with discipline. Let me now turn you to Slide 15. In addition, we have built in forward-looking overlays which we have also increased this quarter and now stand at €1.3 billion. That is circa 30 basis points of cost of risk for the year. We are complementing that with our step change in pre-provision profit and prudent measures which, together with other things, allow us to take up to 3x the provision plan for 2023. We have significant gearing to the rising rate environment regardless of the future monetary policy framework and ECB decisions. This provides us with meaningful tailwinds. We will continue being prudent and preparing for the anticipated future shock. Let me turn you to Slide 16. Finally, we also have an unmatched capital position with a step change best-in-class capital generation. In terms of pre-provision profit to RWAs, we have moved from the bottom to the top quartile of our peer group. Our organic capital generation continues to improve, is significantly above plan and constitutes another strong line of defense. We're no longer burdened by being structurally at a disadvantage on this metric and we are determined to continue to improve it. As I have said, we generated €4 billion net profit after AT1 and CASHES coupon in the first 9 months, excluding Russia, up 49% year-on-year. This was circa €3.8 billion, including Russia as the 2 numbers are now converging. Both were affected by the negative TLTRO impact this quarter. We will exceed our target annual organic capital generation of 150 basis points and expect to be over 200 basis points for the year. That is about €6 billion of organic capital generation this year, giving us an ample cushion to absorb exogenous shocks and protecting our ability to maintain a solid CET1 ratio post any shareholder distribution. With that, I will turn over to Stefano to go over the third quarter results in more detail.

Thank you, Andrea and good morning, everyone. Let's turn to Slide 18. Before I take you through the third quarter '22 results, please let me remind you that they are presenting, excluding Russia, consistently with the prior 2 quarters. My comments are based on a year-on-year comparison that is third quarter '22 versus third quarter '21, unless otherwise noted. As mentioned by Andrea before, this quarter our profit and loss was impacted by a €0.3 billion negative TLTRO accounting one-off which I will explain in detail later. As the ECB changed the deposit facility rate by 50 basis points in July and by 75 basis points in September. In third quarter '22, we produced an excellent net profit of €1.3 billion after cashes and additional Tier 1 coupons, delivering a double-digit return on tangible equity at 11.4%. Without the TLTRO one-off, the respective numbers are €1.6 billion net profit and 13.2% return on tangible equity. 9-month 2022 net profit at €4 billion, outperforming plan targets across all levers. This led to a 9-month 2022 return on tangible equity of 11.6% using our very high capitalization. Calculated with 13% capital ratio, the upper end of our capital target, this goes up to 13.2%. We delivered positive operating leverage with net revenue up 7% and costs down 3% year-on-year. This quarter with the impact of systemic charges that include about €65 million additional contribution for the Italian interband deposit protection fund Banca Carige [ph] Intervention. We also have the tax on extra bank profits in Hungary, about €40 million this quarter and a similar amount is expected in the first quarter '23. The tax rate in third quarter '22 is benefiting from the recognition of the tax shield linked to the cross-border LLPs for Russia, as mentioned in first quarter '22. Key recent financial events include repurchase of 54 million shares equal to 2.7% of share capital for an amount of €584 million of the first -- of the €1 billion second share buyback tranche for 2021. This is highly accretive for EPS as shares will be canceled. We took further steps to simplify and streamline. For our partnership with Allianz, we have signed a framework agreement and 2 share purchase agreements for Croatia to simplify our direct and indirect shareholdings in the country and unlock more value. We simplify the current bancassurance setup in Italy and increase our strategic flexibility by selling our entire stake in CMP Vita Assicura and increasing our shareholding in CNP UniCredit Vita at the same time. Let's now look at the profit and loss in more detail, starting with revenue on Slide 19. Our rain power commercial engine continues to deliver high-quality revenue. Net revenue reached €4.2 billion in third quarter '22, up 7% versus third quarter '21. This reflects strong net interest income growth and resilient asset quality in addition to higher trading results. In third quarter '22, we generated €4.5 billion revenue, up 5%, thanks to high net interest growth of 5% and trading up 60%. Excluding the negative TLTRO accounting one-off mentioned before, revenues are up 12% year-on-year. Please remember that as Yapi is no longer part of the group and not contributing any more to our dividend line, this is the main driver for about €150 million lower dividends in the first 9 months of this year compared to last year. Trading came in at €0.5 billion in third quarter '22 as we are helping our clients to protect their business outcome in this volatile environment. The lion's share is client-driven, supported by hedging activity and the fixed income, currency and commodities business which is up 83% year-on-year. A strong treasury results contributed as well. Let's turn to the next slide. Net interest income was €2.2 billion, down 3% quarter-on-quarter due to the €0.3 billion negative TLTRO accounting one-off. Net of this one-off, net interest is up 10%, driven by higher loan rates and the benefit of rising interest rates and the investment portfolio, more than compensating the negative implication on our funding and higher remuneration for client deposits. Average Euribor 3 months was up 84 points in the quarter. The one-off is linked to our accounting treatment of TLTRO. The accruals on TLTRO are computed using a weighted average rate that assumes a constant deposit rate for the remaining life. In the event of a rate hike, we need to recalculate the average of the new spot deposit rate until maturity, booking a negative one-off for prior periods where we have accrued more than the updated lifetime average. This negative one-off will be compensated by higher net interest contribution during the remaining life of TLTRO. Commercial activity was good with demand for credit still healthy in the quarter, in particular from larger corporates, while business with small-medium enterprises individuals is lowering. Average client loan volumes relevant for net interest are up €9 billion in the quarter across the group, in particular in Germany, Italy and Austria, while end-of-period loans are up billion. Loan volumes also benefit from €3.4 billion in new ESG lending in the quarter as we continue supporting our clients green transaction. Customer loan rates are up 23 basis points in the quarter, benefiting from higher interest rates across our regions. Higher interest rates drove the customer deposit rate 16 basis points higher quarter-on-quarter to 20 basis point customer average remuneration, negatively affecting the deposit contribution to net interest mainly in Germany, where access [indiscernible] was a key feature; and Central Europe, where rates were hiked faster. The customer deposit rate in Italy is only 3 basis points higher in the quarter, while we grew deposits by €1.4 billion at the same time. Average commercial deposit increased by €14 billion in the quarter, mainly driven by small medium enterprises and corporates. Let's take a closer look at our net interest outlook and sensitivity on the next slide, 21. Our incremental interest rate sensitivity contribution will help bolster revenue and offers upside to our net interest, providing an offset in the event of a macroeconomic slowdown. We have updated the managerial NII guidance and sensitivity in line with our base case mild recession scenario. Based on a 1.5% ECB deposit facility rate by year-end 2022 and remaining stable thereafter, we expect a positive incremental net interest income of about €1.2 billion for full year '22 compared to our strategic plan UniCredit Unlocked assumption. This is considered in our updated full year '22 net interest income guidance of at least €9.6 billion. The positive impact in full year '23 is expected to be at least €1.7 billion, thanks to the additional €0.5 billion or more contribution from rates increase and considering the discontinuation of the excess liquidity fee. Both the full year '22 and full year '23 net interest income increase from a 1.5% ECB deposit facility rate exclude the TLTRO benefit. TLTRO can have a further upside of up to €1 billion in full year '23 based on the current contractual conditions. Such an amount can be lower depending on any potential future changes of TLTRO and reserve remuneration conditions. Our market rate assumptions are more conservative versus the current forward rate. The net interest income sensitivity for a further ECB deposit facility rate increase of 100 basis points from 1.5% to 2.5% is about €0.5 billion per annum which also depends on how client behavior and competitive dynamics develop. Let's turn to Slide 22. Fees are down 2% year-on-year, supported by transactional fees activity, mostly compensating lower investment fees that were negatively impacted by lower market levels and elevated financial market volatility which affects client sentiment. While the third quarter is usually seasonally weaker, third quarter '21 showed a strong performance in fees following pandemic lockdowns and so we were up against a strong comparative period. Where there were robust first 9 months of €5.2 billion fees this year, up 3% compared to the first 9 months of last year. This demonstrates the benefit of having diversified fee streams that performed in a variety of conditions. Let's look at the component parts of fees year-on-year development more in details. Transactional fees were up 7%, thanks to card and payment fees driven by the client activity. The third quarter was the best in the payment acquiring business since 2019 in Italy. Financing fees were down 1%, notwithstanding that capital markets, specifically ECM and DCM were negatively impacted by volatility, loans and guarantees helped to stabilize fees and are key overall contributors. Investment fees were down 10%, as lower markets, combined with conservative client portfolio management, led to lower asset under management upfront fee, partly mitigated by better asset under custody fees, thanks to certificates placement. Certificates are a good example of our proactive measure to develop products to meet our clients' needs across market conditions while helping to protect our fee income. As highlighted before by Andrea, please consider that client risk management hedging revenues are booked in trading, as mentioned earlier. In third quarter '22, they stood at around €0.3 billion, up 64%. Let's turn to Slide 23; [indiscernible] structural actions, third quarter '22 costs came in at €2.3 billion, down 3% year-on-year, while inflation in our footprint was 8% in the first 9 months of this year. The reduction was driven by HR costs down 4% year-on-year, benefiting from lower FTEs, down 5% as we rationalized nonbusiness-related activities while maintaining hiring in key areas. But also lower non-HR costs, down 2%, driven by structural cost reduction initiative in all regions in particular, real estate from primarily in Germany operation and lower use of external consultants. Cost discipline is part of our DNA and that will not change. So you can expect us to do a good job in managing the impact of inflation. And these structural cost improvements will help us do so. Most of the additional UniCredit Unlocked FTE reduction have been mutually agreed supporting future HR cost dynamics. The trade union agreement in Germany is valid until May 2024. While the Italian will be renegotiated on a national level, mainly in first half of next year and we have good visibility on HR cost for full year '23. Non-HR cost action on consulting and real estate are sustainable and there are more to come. IT insourcing and optimizing our headquarter footprint in all countries play an important role. To limit inflationary pressure, we have fixed energy and gas prices for next year in our main countries. At the same time, we are also improving the use of digital which give us cost efficiency and we continue investing in our digital and data priorities. We have already realized 80% of the cost reduction ambition of our plan, UniCredit Unlocked. Our strategy is based on simplification and improving efficiency across the organization with the absolute cost reduction being driven more by nonbusiness-related efficiency. This is aimed to not impact our revenue generation capability. The result is significant operating leverage with a 9-month '22 cost/income ratio of 50%, an improvement of 4 percentage points versus the year before. Let's turn to Slide 24. Cost of risk, excluding Russia, is well contained and 20 basis points in the quarter as we used the quarter to further strengthen our overlay provision, protecting future profitability, continued positive development of our default rate led to low NPE inflows and repayments are driven by write-backs on NPAs. As mentioned by Andrea before, our overlay LLPs on performing loans have increased to around €1.3 billion, about €0.3 billion higher than the quarter before. As precautionary measure, we built additional overlays for retail clients in line of high inflation and for energy-intensive supply chain risks. The recent economic developments did not justify an IFRS 9 macro update before our next regular annual review in the fourth quarter, as the impact would not have been material. We updated our spillover analysis, confirming the soundness of our group risk profile which you can find in the annex. At the moment, early warning signals do not show a material deterioration of individual business in our different geographies. Please remember that consumer finance is only 4% of total group exposure of default and the average loan-to-value for the mortgage stock is at low 50%. Exposure to enterprises at high risk to energy cost and supply chain is at a relatively low level at around 1% of our [indiscernible] €454 billion total group exposure default. Small business at only circa 4% of group exposure default and highly secured at over 60% both expected loss on stock at 34 basis points and on new business at 26 basis points also confirming the credit quality of our performing portfolio and now discipline is ingrained in our organization. Let's turn to Slide 25. Our underlying asset quality remained robust and our NPE ratios are stable on a low level. NPE coverage ratio is broadly unchanged at 50%. Remember, we have a favorable mix of our NPE stock with high share of about 76% unlikely to pay and past due. NPE coverage does not include overlays on performing loans which come on top. With our strong asset quality and overlay LLPs, we are uniquely positioned to absorb macroeconomic effects both in a mild and severe recession scenario. Let's turn to Slide 26. In third quarter '22, our risk-weighted assets, excluding Russia, stood at €303 billion, up €4 billion quarter-on-quarter, driven by the €4 billion of regulatory headwinds as we are implementing DBA Guidelines worth €5 billion in the quarter which was slightly offset by €1 billion decrease from procyclicality. Regulatory headwinds in the fourth quarter '22 are expected to be around 25 basis points, an increase of €4 billion risk-weighted assets from loan growth was compensated by continued active portfolio management measures with a focus on reducing low-performing businesses and securitization. Risk-weighted assets related to our Russia participation has slightly decreased to €15 billion and for total Russia, including the cross-border exposure to €17 billion, down €1 billion quarter-on-quarter, mainly thanks to the ruble depreciation and further asset deleveraging. Net revenue to average risk-weighted assets at 5.7% in third quarter '22, up 0.6 percentage points year-on-year. Our business model is focused on capital-light profitable growth. Active portfolio management and efficient capital allocation remain a focus to manage risk-weighted assets and support organic capital generation. Let's turn to Slide 27. The CET1 ratio came in at a very strong 15.4%, down 32 basis points quarter-on-quarter for the deduction of the ongoing €1 billion share buyback while absorbing regulatory headwinds and accruing a €1.4 billion cash dividend in the first 9 months of the year, already higher than the cash dividend for full year '21. The volatility of the BTP had a limited impact of minus 4 basis points in the quarter, more than compensated by a positive 11 basis points impact from DBOs. Thanks to the rate movement. Our BTP sensitivity on capital is limited. A plus 10 basis point widening of BTP assets was spread is around 2 basis point impact on the fully loaded CET1 ratio. Organic capital generation was again excellent in the quarter with 42 basis points. In the 9 months '22, we generated 158 basis points already above the 150 basis point annual organic capital generation targeted in our plan. Before handing over to Andreas, I would like to highlight some specific items for Q4 '22. As expected, our IFRS 9 macroeconomic update for the LLP calculation will take place next quarter. The rationalization of the shareholding with CNP Assurance will have a positive difference of around 8 basis points on capital and around €200 million on net profit at closing. The group tax rate, excluding any potential tax loss carryforward DTA write-up is expected to be around 25%. As a reminder, next quarter, we will disclose the DTA write-up benefit. I will now hand back to Andrea.

Thank you, Stefano. For performance in the first 9 months of this year, together with a better visibility we have for the rest of the year leads us to upgrade our 2022 guidance. We now expect our net revenue, excluding Russia, to exceed €17.4 billion, our NII to be around €400 million higher than the previous guidance at over €9.6 billion and our total fees, excluding CRM, to be broadly in line with 2021. We expect to conclude the year with costs below €9.4 billion, an improvement versus our prior expectation of around €9.5 billion. The lower cost and the higher income mean that our cost income ratio will be around 51%, meaningfully lower than our previous target of 55%. For this year, given the low cost of risk in the first 9 months and despite continuing to build up our overlays, we are guiding to around 25 basis points cost of risk. For the planned period, our cost of risk, excluding Russia, is confirmed at 30 to 35 basis points. As a result of the above, we are now expecting a net profit for the year, excluding Russia, to be over €4.8 billion after CASHES and AT1 coupons. Finally, our CET1 ratio pro forma for 2022 distribution is expected to be above 14.5%, thanks to our increased organic capital generation. All of the above create a solid base for 2022 distribution in line or above 2022 -- 2021. As per the UniCredit Unlocked, subject, of course, to the Q4 outlook, regulatory and shareholders' approval. The composition of our distributions for 2022 which were affected by our guidance in Q1 2022 but our dividend was to be a proportion of the net income, excluding Russia, may be adjusted at the approval of full year results taking into consideration the performance of the overall group. We are only a few months away from delivering an extremely strong 2022, while continuing to strengthen our significant lines of defense for the future. Let's turn to Slide 30. For 2023, we expect NII to continue to be supported by rising interest rate as we continue a conservative approach to volume growth. Our fees could suffer from lower investment fees notwithstanding their greater diversification, especially when we consider CRM-related revenues that are currently booked in trading that we view as fees. Our cost are expected to be impacted by inflationary pressure with some offset from the management actions and front-loading of cost reduction plan so that we are committed for cost growth to lag revenue growth. On loan loss provisions, the outcome depends on the macro scenario outcome but we should be well placed to absorb thanks to our improved pre-provision profit, our significant overlays and other lines of defense, as described earlier. We will provide a more detailed update for 2023 with the next quarter. The impact of a severe recession would be meaningful but we continue to work to be able to honor the majority, if not all, of our 2024 UniCredit Unlocked targets supporting our distribution ambition. This is the outcome of our step change in profitability, our existing line of defense which we continue to strengthen and the proactive measures we have been taking. They all underpin predictable risk-adjusted returns supported by a very good and well-covered portfolio. Before we hand over for Q&A, I would like to close with a reminder of our key messages. UniCredit is a transformed bank with a uniting vision, a differentiating strategy and relentless focus on execution of our plan which is delivering a step change in risk-adjusted profitability. Both the third quarter and 9 months confirm our profitable growth trajectory, thanks to our relentless execution of our industrial plan. Our strong line of defense and conservatism embedded in our risk approach positions us well to face macro headwinds. Thank you very much for listening and I will now pass over to the moderator for Q&A.

[Operator Instructions] The first question is from Andrea Filtri with Mediobanca.

I guess I’ve got 2 questions. The first is we’ve been very clear in setting the scenarios and the outlook on NII and cost of risk. My question is what do you need to see to also change the business from targets that we have done for the 2022 guidance, given the upgraded NII guidance and the comfort that you show on cost of risk. And the second question is on what we call the [indiscernible]. What are your expectations on the ECB treatment of excess liquidity/TLTRO for banks or banking tax in Western Europe.

Apologies, Andrea. The second part of the first question I missed. Can you repeat it, please? You said something about scenarios and outlook on NII and cost and what we would need to see to?

To upgrade, as you have done for 2022, you upgraded your guidance, what would you need to see to upgrade also the business plan targets, given that you have got a lot more continents on your NII trajectory versus the plan and we’re also showing comfort on cost of risk guidance.

Okay. So let me start with the easy one. I don't think I can make any prediction from what will happen tomorrow. So let's see what happens tomorrow and we will revert with how that affects the TLTRO impact on our accounts going forward. As we said, we took the charge now. So worst that can happen is we are where we are. Going forward, depending on the decision tomorrow, we will upgrade -- we will update on what the impact from TLTRO given this accounting transfer into the future will be to our accounts. On the first question, I think at this point, we are a little bit flying like everybody else, i.e., we see no evidence of worsening of our cost of risk. We see no evidence of negative impacts on our franchise from the spillover effects and other things. But however, we do understand that as 2023 -- but however, we see a deceleration in economic growth. I mean take Italy 6.6% to half that. And we do see some stress, at least our indicators show some stress on families budgets and on SMEs budget, especially some the ones that are more struggling, hence, our initiatives in many countries. But they are not translated in cost of risk. So we, in a way, gave up to try and tell you what the right scenario is. And what we are trying to tell you is what we can absorb depending on the scenario that will hit us. At this point in time, what we're saying implicitly is if there is a mild scenario, so more or less flat growth next year. Because of our improved run rate on pre-provision profit, our cost of risk should not deviate very much and certainly less than what we will have in terms of positive tailwinds on our revenues, net of increase of cost that we could have, okay? So in that environment, the other buffers are on top and the other buffers are released. So the €1.3 billion overlays is not required in that scenario. So it may be released if the environment is clear. Secondly, the TLTRO depending on what it is, will come to bear. So in a mild recession scenario, our views for 2023 are actually quite positive because of this dynamic. In a more extreme scenario at minus 3%, we do feel that all the buffers we've gone through will be able to absorb the additional cost of risk. So the additional cost of risk is not going to be the factor that derail us. But we're still unclear on what will be exactly the interest rate scenario in such a scenario, i.e., if we start having a very negative GDP reduction, what happens to rates. We don't know. What happened to client behavior? We can expect but we don't know exactly. So all of these items are items whether we are going to look and factor in to determine what would happen if instead of being in a mild recession, we go in an extreme recession, still high inflation scenario. I hope it answers the question.

Banking tax.

Banking tax. Okay, sorry, banking tax. With respect to banking tax, we -- it depends on the markets. We have no reason at this point in time to anticipate one in any of the markets where we are -- where we haven't been hit by one already. And so that's what we have on this topic.

The next question is from Bret Ashmit with Autonomous Research.

I've got a question on the specific provisions. I think you mentioned that you've maxed out on specifics. Your guidance implies that there will be around €700 million of ex Russia provisions in Q4 which is a significant increase. How much of that do you expect there to be for IFRS 9? And how much of that is additional buffer build? And the second one is on the CASHES. With the current cash price, do you think that there's any interest in potentially buying back the securities, considering that the interest is going to increase?

Okay. Thank you. I’ll let Stefano integrate me on this. But – so I think that’s a very good question. So we start with a portfolio but I think has been run consistently very conservatively over the last not year, not 2 years but several years. And that, I think, is a key differentiator between banks, how it has been run. Secondly, as you know, we build specific provisions based on the evidence that we have and the model of reference that we take. And based on that evidence and that model of – and that scenario of reference – sorry, not model of reference, scenario of reference, the specific provision are maxed out, meaning there is no way to do more without having issues with accounting. So what we do is we create overlays above and beyond the coverage of our entire book. Two, be forward-looking and try to compensate for what may happen next year. So that overlay for us is that – so if we were to change the scenario of reference, obviously, the provision level would increase a specific provision level would increase but we would have our overlays to bridge the gap in part, in whole or more than proportionally. So this is a little bit how we look at that.

Integrating -- yes, integrating. So because you have -- you've asked in relation to the IFRS 9 macro. So a point in time in this moment, utilizing our mild and severe recession scenario, as I was highlighting before, we are not expecting a meaningful impact on LLP deriving from the update of the scenario. Then we need to show the evolution of geopolitical and microeconomic situation in the next months. As highlighted by Andrea, currently, the quality of the portfolio and the dynamic of the default rate, plus the coverage on the nonperforming portfolio as such that embedded in the guidance of around 25% cost of risk, we are also assuming an increased amount of overlays in Q4.

Sorry, on CASHES, at this point, we have no plans to talk about. But I take your point.

The next question is from Andrea Vercellone with BNP Paribas Exane.

My 2 questions are both TLTRO related. We -- obviously, we don't know what the ECB is going to do tomorrow. But I just wanted to know, operationally in a scenario whereby the ECB was basically zero, the carry that you make with the TLTRO or reduce it very significantly would you be inclined to just repay it or to invest some of it in other securities to preserve some of the carry? And the second one is a bit more specific and it’s numerical and relates to your guidance of €9.6 billion of NII for full year ‘22 or at least €9.6 million. This is numerical because it’s based on a specific scenario, 1.5% average ECB rate in Q4. This has allowed you to calculate already what the negative one-off for the TLTRO will be. So I would just like to know what you have embedded in your guidance for negative TLTRO related contribution in Q4. But also, I want to know the positive as well which is the additional carry that you will generate.

So Andrea, so let's start from the first question. So TLTRO 3 for us is not a matter of liquidity and funding. So if we look from a liquidity funding standpoint, considering the amount of liquid assets and deposit that we have in ECB, we can reimburse when there are more the condition to keep the instruments. Let's start from a second from the accounting treatment. So as mentioned by Andre as well, our accounting treatment is such that in future will have an effect that are in purely from an accounting treatment of around €500 million. What can happen? So as a matter of fact, we can have fundamentally a couple of situations. One is the change of the mandatory reserve remuneration, let's say, or so-called tiering. In such a case, there is no relevant change in the treatment from an accounting standpoint of the TLTRO. And so we will keep the TLTRO as it is. What will happen we will have a lower net interest income deriving from the investment of the liquidity. That will depend, if any, from the condition and the multiplier. While if there is a change of the condition of the liability, depending from the level of the change of the conditions clearly, we might take a decision in relation to the opportunity or not to keep the instrument. But I will not speculate more because, as a matter of fact, I will wait just a day and let's see tomorrow which will be the outcome of the ECB decision. With regards to the net interest income guidance of above €9.6 billion. I mean, first of all, it's important to remember everyone that this is the perimeter, excluding Russia. In relation to the TLTRO contribution in that number, you are right, considering that we are assuming as a base scenario, a level of rate of 1.5%. We're also assuming a negative one-off of around €100 million in Q4 as well based on the, let's say, current conditions and current accounting treatment. The overall contribution to the TLTRO embedded in the above €9.6 billion for the full year is above €350 million.

Sorry, I don’t understand it. What is the delta in Q4 associated to the TLTRO relative to what you had in Q3, not just the negative.

At the current condition is positive and it will be in the range of around €250 million.

The next question is from Chris Hallam with Goldman Sachs.

Two questions on overlays. First, Stefano, I think you mentioned this earlier in the Q&A but just to confirm, is it fair to still assume that the overlays number should move higher again in Q4 towards €1.5 billion? And second, now you have around 30 basis points of buffer. Could you provide any color in terms of how far into the severe recession scenario you’d need to be to start to utilize those overlays and how far the way we are from that as we look into 2023?

Okay. So in relation to cost of risk and severe scenario. As a matter of fact, there is a specific slide that it's important to have a look in order to combine the impact on our cost of risk in the mild scenario and severe scenario. So that is the slide 30 of the presentation. So as a matter of fact, you can see that is in that slide, you can see that in Unlocked, we are planning to have a cost of risk between €30 million and €35 million. What we are saying is in the mild recession scenario that is implying in our footprint, a GDP dynamic slightly above zero for next year. The cost of risk will be around €25 million this year and we are confirming the €30 million, €35 million [ph] that we have in the plan. If you look to the average in the period, '22, '24 will be better than the plan. Coming to the severe scenario. In the severe scenario, the GDP dynamic on our footprint will be more negative. So around minus 3 in our footprint. In such a scenario, we will start utilizing overlays. But as a matter of fact, the average LLP that we will have in the period 2022, 2024 [ph] will be in line or slightly above the average of the plan. also due to the fact that, as I was commenting, we will be utilizing the overlays that currently are 1.3 but we are expecting to increase during the course of in Q4.

The next question is from Ignacio Cerezo with UBS.

I’ve got a couple on funding in particular. If you can give us some color on how you expect deposit volumes to evolve in different geographies, you have loan-to-deposit ratios below 100%. You’ve grown actually the deposit base this quarter. So how do you think actually competitive dynamics will be in the main geographies? And then second, if you can remind us basically your whole wholesale funding issuance plan in the next 12, 18 months. How much you need to do on kind of instruments [ph]?

Okay. In relation to the deposit dynamic, we were -- I was commenting during the call. As a matter of fact, we had an increase in all the countries of the deposits. So the average deposit increase of around €14 billion during the last quarter. The pricing of the clients rate was up 20 basis points but it's important to differentiate country by country. So for example, in Germany, we were up 24% due to the effect of the excess liquidity fee. Because as a matter of fact, we have discontinued the application of the fee that was positively impacting the client rate. In Italy, for example, as I was commenting, the pass-through is still very low because we move just 3 basis points. That's an important element to be considered also for -- when you look to the net interest income sensitivity, what I was commenting before, in relation to the further contribution of the net interest income in '23 of plus €500 million, that is based on an increased level of beta sensitivity of the deposit. So the pass-through is calculated in a more conservative way in comparison to the historical average. So the historical average is having a bit of 30%, more or less, we have increased in such a scenario. Again, it's still early to be said and the incurred dynamic of the pass-through is not only lower than the 40% is also lower than the statistical that we have experienced when the rates were positive. So far so good. What we are expecting in terms of dynamic of the deposit is overall to have a dynamic of the deposit in the near future slightly better in terms of growth than the dynamic of the lending. So all in all, the loan-to-deposit ratio should not deteriorate in future. I have to say in all the country. The wholesale funding expectation for the near future. So it will be similar to what happened this year. So as a matter of fact, taking into consideration the good dynamic of risk-weighted asset and capital the portion of the plan related to TLAC, MREL will be contained. While the main focus of the funding plan will be related to a senior preferred issuances and certificates and obviously covered bonds. We are currently expecting to execute in a range of, let's say, around €4 billion, the amount of -- in a range between €2 billion and €4 billion the amount of subordinated bonds between 23% and 24%, including additional Tier 1 and Tier 2.

The next question is from Azzurra Guelfi with Citi.

Two questions from me. One is on the NII and just following on what Ignacio was asking before. I was more focused on the asset side? And how easy is to reprice, especially on the corporate side and maybe on the client are a little bit more sensitive to energy price and the current macroeconomic development on the asset side, if you have seen any difficulties in repricing? Or if you've seen any request for renegotiation that could impact in the future your asset quality there? And the second one is on your organic capital generation, it’s going very well. And even when I look at Slide 30, even in your severe recession -- in a more severe recession scenario, the operating capital generation would be above what you had into the original plan? Is it just linked to the interest rates environment? Or is something else in terms of capital optimization that you can think of. And in the -- if this capital organic generation continue to be stronger than expected. Could you rethink about the structure of your dividend distribution versus buyback versus cash dividend?

Let me maybe start and Stefano will follow up. So on organic capital generation, it's obviously linked to a number of factors. So it's very difficult to forecast what it will be in uncertain economic scenarios. Factor number 1 is the level of net income. Factor number 2 is the RWA dynamic. So what we're saying at the moment is that we are relatively confident that in most of the probable scenarios for recession or for stackflation [ph]. The cost of risk should either be covered by the buffers we have or actually the buffers we have could be released reducing further our cost of risk. So cost of risk within the scenario that we have discussed, we feel that by the end of this year, we will have relatively under control. That's a factor. The other factors, what will happen to our net revenue -- our gross revenues and what will happen to our cost and what will happen to our RWA. On the gross revenues, obviously, they depend, a, what is the dynamic of rates? So in the mild scenario, we can probably all assume that the rate environment will be, let's say, supportive as it is now. The more you have an extreme recession scenario, the less you can assume but the overall rates environment will be as supportive as it is now. So there is that as a question. But we cannot answer at the moment. The second question related to that is what will happen in fees. And while these scenarios are relatively negative all of them on investment fees, we are noticing that they are actually quite positive on protection fees, on transaction and payments and on client risk management. We keep on hammering this point because more than 70% of what we make in client risk management is margin which is exactly the same as if it was a distribution fee on an investment on an insurance policy or whatever. It's above and beyond a full hedge cost. So depending on the dynamics of those, you will have a dynamic on gross revenues. Secondly, you then go to the cost line. In the mild scenario with inflation remaining more or less at the levels that we have indicated, we think we can manage most of our cost, let's say, inflation with all the levers that we're using. If you go in a greater recession scenario, then the question is what happens to inflation because that can be beneficial to cost because the pressure goes down as opposed to what we have in the mild recession scenario but we don't know. So all of this to say what? And then you have RWAs and RWAs depends, a, on -- they depends on what business you're doing. So as we're doing, we are focusing on quality in NII, not on volume, on NII, RWA dynamics are relatively under control. And we continue to raise the efficiency of the back book by improving the profitability of the back book which also means purging out things that don't meet hurdle, okay? We will continue to do that. That will remain. The uncertainty on RWAs is what while staging an increased density. So given that we have rolled out -- we will have rolled out all EBA models by the end of this year and we are well in advance to the average well in advance. We don't think we have a lot of impact from that. We could have some impact from staging. But as I reminded at the beginning of the call, we already moved €26 billion in Q4 of last year ahead of what we expected to be a hit from Omicron and was converted into -- in 'are hit from the war'. So even on that, we have a relative buffer. So when you put all this together, we have a lot of moving averages. And depending when all those variables go, we can have one or another scenario. Suffice to say that at the moment, what I would say but in terms of what we control, I am much impressed with what this franchise is doing in terms of organic capital generation. And in terms of commercial activity and cost efficiency. So everything else being equal, I'm confident we are running ahead of UniCredit Unlocked plan but everything is not equal.

I’m integrating what Andrea just highlighted because if you look to the slide I was mentioning before, so the Slide 30, where we have the different bars. And you look which are the different components of the organic capital generation. So the difference between the recession, the mild is not really the risk-weighted assets. So for the reason mentioned by Andrea, our action on risk-weighted asset, the fact that in the severe recession, we will have less loans. Yes, we might have a little bit more risk-weighted assets but not so much. So the difference between, let’s say, the 2 cases is mainly revenue-driven, partially connected to different assumptions on fees and trading and also a more conservative assumption on net interest income. So in the severe, we’re assuming a more conservative rate scenario, okay? If that will not happen, meaning the rates will remain at 1.5% or similar level in compared with the mild, also in the recession case, we can have a better outcome. In relation to the pricing, it’s important to distinguish when you look to the client rate, I mean, the new business versus the stock. So on the stock, the average client rate of the stock is up 23 basis points. The average Euribor movement in the quarter is 84%. There is a delay in the repricing both on the liability side and on the asset side. What is currently happening is also differentiated by country. For example, on the new lending, if you look at the new client rate the front book pricing is higher than the back book pricing, both in Italy and Germany. By on just a credit spread component, Germany already repriced while in Italy, still not. So as a matter of fact, currently, there is a higher competition in Italy in relation to that, especially on the short-term lending within that, that situation will change over time but this is what we are seeing on the ground. In relation to the mix between cash dividend and share buyback I mean, as we communicated, we are calculating the actual dividend at 35% of the net profit, excluding Russia. So currently, what we are assuming in the calculation of the common equity ratio at year-end, we are assuming a buyback for the calculational pro forma of around a couple of billion but we’ll review the specific mix when we will have the final result at full year ‘22 and then we will communicate that accordingly.

With respect to that, I would like to underscore that the reason we tweaked the base of reference for our dividend is to protect cash dividends against the impact from Russia. It would be the most protected part of our distributions as the results of both the franchise with and without Russia are converging, that may change which is why we need to review the way we're going to do it. But it may stay as it is or it may change, we're just giving you a heads up.

The next question is from Delphine Lee with JPMorgan.

So my first question is on the interest, just going back to the interest rate activity slide 21. If you don't mind just sharing with us the deposit beta assumption that you have for the different stages of interest rates, in particular, the last -- the further 100 basis points from 1.5% to 2.5% deposit rate? And my second question is just on payout option. The ECB seems to be a bit more cautious in terms of payout. Do you think that it will have some kind of impact on your policies? Or is your – just your MDA buffer and CET1 ratio of 14.5%, so high that we don’t expect much changes and much impact.

So I'll start maybe with a second and then Stefano takes the first. So we we're not speculating on what could be but I think we have a productive dialogue with ECB, the ECB as all regulators is correctly concerned about what could be in the future as we are -- so at this point in time, we feel that the best way to support distributions is; a, to deliver on all the parameters of the plan that are supporting them which we are; and b, to further deliver on lines of defense, like all the, let's say, lines of defense that we've gone through in terms of overlays and other items in order to make sure that not only we defend this year but we are in a position of strength defending the years going forward. And therefore, when we look at confirming the distribution at the end of this year or in terms of the final year result in January, we will be able not only to point to what our performance has been in 2022 but also at how we face 2023 in terms of total capital, organic capital generation, buffers on cost of risks and a whole bunch of other things to show that we're capable and able to prudently navigate whatever the distribution that we choose to recommend.

So going to the first point. So on net interest income sensitivity by bucket of interest rates. So let's go back to our initial sensitivities. So for movement of rates between minus 50 and plus 50, okay? That is the first bucket. You remember, we have communicated that plus 100 our positive contribution to the net interest income would have been around €1 billion. Then we have communicated that for the further increase, let's say, for a further another 100 basis points, our sensitivity would have been reduced, let's say, to around €800 million progressively. If you sum up the first and the second, you are having to around, let's say, €1.8 billion, okay? And as a matter of fact, if you look in our plan, the rates were around minus 50. Now we're assuming plus 1.5. So the difference between the 2 is 200, okay? And if you look what we are communicating which is the translation effect of these rates increase in the net interest income for 2023 above €1.7 billion, okay? So it's just squaring with what we are communicating in relation to our net interest income sensitivity. Then let's pay attention to which is the debate of the deposit in relation to this calculation. Because as I was telling you that it will be a fundamental phenomenon to be a look at the statistical data of our deposits. So the portion of our deposit that we are considering [indiscernible] rates is around 30% statistically in the group. Let's move to the third bucket. So if the rates will be above 1.5%. So if the rates will be above 1.5%, what we have highlighted is that our sensitivity still there positive sensitivity around €500 million. So progressively down, so it's not a point in time short. It will go progressively down from €800 million to €500 million. And by the way, this is depending on the beta [ph] I was telling you before which is a beta assumption that we have in this 500 a little bit more than 40% okay? So what we are assuming there is an increase of more than 10 percentage points. That is an assumption. If that will not happen and the pass-through is lower. So the beta [ph] will be lower, our actual net interest income sensitivity can be even higher than €500 million.

The next question is from Benjie Creelan-Sandford with Jefferies. Benjie Creelan-Sandford: The first question was on loan growth outlook. So we had the latest ECB bank lending survey yesterday which were showing a corporate demand continues to surprise positively. But on the other hand, banks are increasingly tightening their credit conditions. So I just wanted to ask in terms of when you look across your business, what are you seeing? Do you think that there is bad demand out there in terms of what the company is really stretched for liquidity? Or is it more of good demand in the sense that inflation is higher costs are going up. So naturally, working capital needs – should also go up and therefore, lending can continue to surprise positively. And in terms of your own lending approach. Have you changed anything in terms of your risk tolerance or lending criteria at all in recent months? The second question was just a quick one on guaranteed loans. Can you just remind us of the level of guaranteed loans in government guaranteed loans in Italy and whether that is specifically factored into your provision guidance going forward?

So I will start from the second one. So the stock of guaranteed loans in Italy is around €25 billion. That is included in the overall riskiness assessment of the portfolio. So when I was highlighting before that our small business is highly secure. So over 60% that is clearly including all the guarantees and among the different guarantees also the state guarantee in Italy. All the cost of risk guidance, so both expected loss and cost of risk guidance is including also the benefit deriving from these guarantees. So when we are guiding around 25 basis points this year and in line with the plan for next year, we are also taking in consideration both in the mild and severe recession scenario of the benefit deriving from these guarantees. What we're seeing on the ground and which are the expectations. In general, what we are seeing is general deceleration, not incredibly important of the dynamic of lending towards individuals, still growing on the new production. In relative terms, is, for example, in Italy is more stable on the consumer financing side while where there is a reduction on mortgages. Not a surprise, meaning that similar to enterprises that are pausing in relation to financing fixed investment that is happening also on the retail side. On the enterprises, as we have mentioned, as a matter of fact, the need for working capital needs is there as a matter of fact. While less so for fixed investment. So -- but differentiating between large corporates or the dynamic of the lending of the large corporate in [indiscernible] was better than the dynamic of small middle enterprises at least in compared to what we have been seeing so far. In relation to the expectation, the expectation also in the mild scenario is that, on average, the system independently from the GDP dynamic of around zero can grow in terms of lending stock between 1.5% and 2 percentage points.

The next question is from Manuela Meroni with Intesa Sanpaolo.

I have a couple of questions remaining. The first one is on the NII in Russia. There will be a significant increase in the quarter. So I’m wondering if you can maybe elaborate on that. And you can confirm what is the run rate for Russia? And the second question is on the trading income. It’s been very strong in this quarter. You mentioned that part of this [indiscernible] to client activity. So could you please led to the contribution of client activity and trading income and what we can consider as a run rate for your trading income in the next quarter?

Okay. In relation to Russia, the net interest income dynamic of Russia this quarter was particularly good. As a matter of fact, this is due to the different level of dynamic of the rates that we can get on the deposit side in comparison with the lending side. So as a matter of fact, the rates in Russia are really high. And coming back to what I was telling you before, if you are properly managing the liability side, containing the pass-through to the deposit and propriety pricing on the asset side in such an interest rate environment, you can positively improve the net interest income. More specifically, if we look to figures, the net interest income contribution of Russia have been €240 million in this quarter that was up around €70 million, €80 million quarter-on-quarter. The trading result is still strong but we have a reduction in this quarter in comparison with the second quarter. In the case of the trading that is due to the volatility of currency and financial variable. The trading dynamic was strong, as we were anticipating before, especially due to the dynamic of the client risk management hedging revenues. That part is a markup. So as a matter of fact, it's not having a market risk. So it's fundamentally the markup of the hedging activity that we are doing with clients. In a way, it's like fees. But for accounting reason, we are putting that in the trading. That's why we don't think that it's better to consider this amount together with the other dynamic of the fees. Indeed, if you look at the contribution of that specific item that this quarter is €252 million and is up €50 million quarter-on-quarter and €100 million year-on-year. And if you adjust our fee dynamic, taking that into consideration, our third quarter '22 comparison with the third quarter '21 is plus 4%. And if you look at the 9 months '22, our fees taking into consideration also the client risk management part in comparison with the 9 months '21 were plus 5%. That's why we keep on repeating that we are diversified and it's important to have a look to the overall dynamic of the different products that we have and that we are distributing to our clients.

The next question is from Andrea Lisi with Equita.

Just a quick question on the NII for 2024. So after the TLTRO. If you can provide some color on that. So what should we take into account considering that your assumption on interest rate in terms of increasing benefit on NII for 2024, also factoring in the fact that GDP [indiscernible]; so you cannot use that say, for investing or through the ECB or [indiscernible]?

What we have communicated, you can consider already as a run rate. So what you can see at Page 21 of our presentation, you can consider that as a run rate. So when I was highlighting that we will have more than €0.5 billion translation effect in '23, then you can add that amount to the above €9.6 billion of -- guided for 2022. That dynamic is there for '24 as well. So you can add the 0.5% plus whichever consideration you would like to do in relation to the dynamic of rates. So if you look to a situation where in '24, we're expecting to have 2.5% in terms of rate. You should add to the 9.6%, both the first 500 and the second 500, okay? And then you're arriving to the '24. This is not taking -- that is purely a rate movement, okay? So it's not taking in consideration the potential effect there, I mean, from volumes because that is a different story. That is the pure rate effect. And repeating again, the TLTRO is just on top, okay? So it's something positive that we can have, depending on the final decision tomorrow of ECB. And it's a relevant point for 2023 only. The positive leverage of the group towards rates is relevant for '22, '23 and '24 independently from TLTRO.

There are no more questions at this time. The floor is back to you for any closing remarks.

So, thank you very much for your time and we will discuss with some of you bilaterally further. But thank you very much. Have a nice day.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.