Q2 2026 Banca Monte dei Paschi di Siena S.p.A. Earnings Call
Speaker #1: Tail that Monte Paschi has achieved, together with Mediobanca. And let me be clear: this is only the beginning of what that combination can do.
Speaker #3: One highway's jammed with broken heroes on a last chance power drive. Everybody's out on the run tonight, but there's no place left to hide.
Speaker #1: In the first 6 months of the year, we generated more than 1.1 billion euro in net profit. We expanded lending, we increased customer financial asset, and we strengthened capital.
Speaker #3: Together, windy, we can live with the sadness. I'll love you with all the magic in my soul. Oh, Sunday girl, I don't know when we're gonna get to that place where we really want to go and we'll walk in the sun.
Speaker #1: We continue to deliver strong, sustainable, and increasingly diversified performance thanks to a stronger franchise and more diversified business model and a greater ability to create value over time.
Speaker #1: Monte Paschi today is a strategic asset of the Italian economy. It is an important economic infrastructure of this country. It has systemic value. That systemic value depends on the integrity of the bank itself.
Speaker #3: But till this, chance like us, baby, we were born to run. Honey, chance like us, baby, we were born to run. Come on, Wendy, chance like us, baby, we were born to run.
Speaker #1: Let me put it simply: if you split a power station in two, each part may still stand, but you risk losing power. You reduce the capacity to deliver energy where it is needed.
Speaker #1: Banking works the same way. Monte Paschi is not just a collection of branches; it is a network of relationships, knowledge, and trust. Branches are not walls; they are antennas.
Speaker #1: Every day, they collect signals from the real economy. And they turn local savings into credit, credit into investments, investment into economic growth. If the system loses power, business receives less energy.
Speaker #3: In the day, we sweat it out on the streets of a runaway American dream. At night, we ride to mansions of glory and suicide machines.
Speaker #1: That is, less credit, slower and more expensive decisions, less support for the real economy. So the question is not only what Monte Paschi is worth today, it is what value our bank can generate for this country tomorrow.
Speaker #3: Sprung from cages on highway, man, cold wheel fuel and jacket and stepping out over the line. Oh, maybe they sound ripped the bones from your back at the death trap.
Speaker #1: But now, let's focus on the results achieved. What stands out in the second quarter is quality. Growth in earnings, growing commercial activity, growing client assets.
Speaker #3: It's a suicide rap, we gotta get out while we're young. 'Cause, chance like us, baby, we were born to run. Windy, let me in.
Speaker #1: And further strengthening of the capital. Net profit exceeded 600 million euro in the quarter, and 1.1 billion euro in the first half. Revenues increased, costs remained under control, capital strengthening to 16.3%.
Speaker #3: I want to be.
Speaker #1: Good morning. This is the conference call operator. Welcome, and thank you for joining the Banca Monte dei Paschi di Siena's second quarter and first half 2026 presentation.
Speaker #1: Customer asset at 300 billion euro. And continued growth across all measured business lines. The most important message is that performance is becoming a broader and more diversified, driven by strength of the franchise as a whole.
Speaker #1: As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone.
Speaker #1: Profitability continues to improve, quarter after quarter. Year after year. Second quarter, net profit exceeded 600 million euro. More than 20% versus the first quarter.
Speaker #1: At this time, I would like to turn the conference over to Mr. Luigi Lovaglio, Chief Executive Officer. Please go ahead, sir.
Speaker #3: Thank you very much. Good morning, and thank you for joining us. The first task of 2026 confirms the quality of our transformational journey of growth.
Speaker #1: First half net profit exceeded 1.1 billion. This level of profitability is creating value today. But it is also creating strategic optionality for tomorrow. Moving to the next operating profit, net operating profit exceeded 1 billion in the quarter and 2 billion euro in the first half.
Speaker #3: We are presenting today the evidence of the industrial scale that Monte Paschi has achieved together with Mediobanca. And let me be clear, this is only the beginning of what that combination can do.
Speaker #3: In the first six months of the year, we generated more than $1.1 billion in net profit. We expanded lending, increased customer financial assets, and strengthened capital.
Speaker #1: Growth reached 11.8% quarter on quarter and 8.2 year on year. This is one of the cleanest indicators of the quality of the business. It shows that growth is being generated by the core franchise.
Speaker #3: We continue to deliver strong, sustainable, and increasingly diversified performance, thanks to a stronger franchise and a more diversified business model, as well as a greater ability to create value over time.
Speaker #1: So, stronger revenue, a better business mix, disciplined cost, and controlled risks. Now, let me show the how this translates into operating leverage. Second quarter, gross operating profit reached almost 1.2 billion euro.
Speaker #3: Monte Paschi today is a strategic asset of the Italian economy. It is an important economic infrastructure for this country. It has systemic value. That systemic value depends on the integrity of the bank itself.
Speaker #1: Up 8.7% quarter on quarter and 11.4% year on year. This reflects a strong combination of revenues acceleration and cost discipline. Revenues increased during the quarter, supported by excellent fee performance.
Speaker #3: Let me put it simply: if you split a power station in two, each part may still stand, but you risk losing power. You reduce the capacity to deliver energy where it is needed.
Speaker #1: At the same time, operating costs remained under control. As a result, the cost-income ratio improved further to 42%. This is a positive JAWS. And positive JAWS are one of the key indicators of execution quality.
Speaker #3: Banking works the same way. Monte Paschi is not just a collection of branches; it is a network of relationships, knowledge, and trust. Branches are not walls.
Speaker #1: Let me now take you to the first half view of the gross operating profit. The first half picture confirms the same trend. Revenues increased 4.1% year on year, operating costs declined 0.7%, gross operating profit increased 8% to 2.3 billion euro.
Speaker #3: They are antennas. Every day, they collect signals from the real economy, and they turn local savings into credit, credit into investments, and investment into economic growth.
Speaker #3: If the system loses power, businesses receive less energy. That is, less credit, slower and more expensive decisions, less support for the real economy. So the question is not only what Monte Paschi is worth today, it is what value our bank can generate for this country tomorrow.
Speaker #1: And the cost-income ratio improved by 2 percentage points to 43%. The message is straightforward: we are delivering profitable growth while maintaining cost discipline. Our capability in execution is the key driver of value creation.
Speaker #1: Let me now move to the two main revenue pillars, starting with the net interest income and then fees. Net interest income remains remarkably resilient.
Speaker #3: But now, let's focus on the results achieved. What stands out in the second quarter is quality: growth in earnings, growing commercial activity, and growing client assets.
Speaker #1: Approximately 2.1 billion euro in the first half. And increased to 1.06 billion in the second quarter. Growth in volume, effective management of commercial spreads.
Speaker #3: And further strengthening of the capital. Net profit exceeded $600 million in the quarter, and $1.1 billion in the first half. Revenues increased, costs remained under control, capital strengthening to 16.3%.
Speaker #1: These factors confirm that the bank is able to protect margins while supporting lending growth. At the same time, we enjoy an increasing contribution from fees and capital-light businesses.
Speaker #3: Customer assets at $300 billion, and continued growth across all measured business lines. The most important message is that performance is becoming broader and more diversified.
Speaker #1: And it is visible in the next slide. If there is one area that best illustrates the evolution of our business model, it is fees.
Speaker #3: Driven by the strength of the franchise as a whole, profitability continues to improve quarter after quarter, year after year. Second quarter net profit exceeded $600 million, more than 20% versus the first quarter.
Speaker #1: The income is becoming an increasingly powerful growth engine. Quarterly fees reached 617 million euro and increased of 8.4% quarter on quarter and 9% year on year.
Speaker #1: Growth was driven by wealth management, advisory activity, and commercial banking fees. This is exactly the trajectory we outline when presenting our strategic plan and execution continues to validate that strategy.
Speaker #3: First-half net profit exceeded $1.1 billion. This level of profitability is creating value today, but it is also creating strategic optionality for tomorrow. Moving to the next operating profit.
Speaker #1: Looking at the first half as a whole, fees increased to almost 1.3 billion euro. Growth reached 3.6 year on year. The direction is clear: more diversification, more recurring revenues, more resilience.
Speaker #3: Net operating profit exceeded $1 billion in the quarter and $2 billion in the first half. Growth reached 11.8% quarter on quarter and 8.2% year on year.
Speaker #1: It is the result of client relationship and advisory expertise and demonstrates the value of our group distribution platform, combining synergically major banka and Monte Paschi capabilities.
Speaker #3: This is one of the clearest indicators of the quality of the business. It shows that growth is being generated by the core franchise. So, stronger revenue, a better business mix, disciplined costs, and controlled risks.
Speaker #1: Let's now look at what is sits behind this terms of commercial in terms of commercial momentum. Commercial performance remained exceptionally strong. Customer financial assets reached 300 billion euro, wealth management gross inflow exceeded 6 billion euro.
Speaker #3: Now, let me show how this translates into operating leverage. Second quarter gross operating profit reached almost $1.2 billion, up 8.7% quarter on quarter and 11.4% year on year.
Speaker #1: Mortgage production increased strongly, consumer finance continued to expand. What these numbers really represent is trust. Trust from outsource, from business, from communities. And trust remained one of the most valuable assets a bank can have.
Speaker #3: This reflects a strong combination of revenue acceleration and cost discipline. Revenues increased during the quarter, supported by excellent fee performance. At the same time, operating costs remained under control.
Speaker #3: As a result, the cost-income ratio improved further to 42%. This is a positive jaws. And positive jaws are one of the key indicators of execution quality.
Speaker #1: Monte Paschi is not a simply collection of assets. It is a network of relationship, knowledge, and trust built over generations. Customer loans continue to expand.
Speaker #3: Let me now take you to the first-half view of the gross operating profit. The first-half picture confirms the same trend. Revenues increased 4.1% year on year.
Speaker #1: Reaching 131 billion up 1.8% quarter on quarter and up 5.6% year on year. Growth was broad-based, retail banking, consumer finance, corporate investment banking. We continue gaining market share in businesses where relationships matter most.
Speaker #3: Operating costs declined by 0.7%. Gross operating profit increased by 8% to $2.3 billion. The cost-income ratio improved by 2 percentage points to 43%. The message is straightforward.
Speaker #3: We are delivering profitable growth while maintaining cost discipline. Our capability in execution is the key driver of value creation. Let me now move to the two main revenue pillars, starting with net interest income and then fees.
Speaker #1: This is an important because loan growth remained one of the clearest indicators of relevance within the real economy. Commercial direct saving reached 107 billion euro.
Speaker #1: Up on year and up sequentially. The important point is that customer balances remain stable despite a highly competitive environment. That stability provides funding strength.
Speaker #3: Net interest income remains remarkably resilient at approximately $2.1 billion in the first half, and increased to $1.06 billion in the second quarter. Growth in volume affects management of commercial spreads.
Speaker #1: Funding strength supports lending growth and lending growth supports economy. And consequently, earnings generation. This is our franchise value is created over time. Now, let's move to Android funding.
Speaker #3: This factor confirms that the bank is able to protect margins while supporting lending growth. At the same time, we enjoy an increasing contribution from fees and capital-light businesses.
Speaker #1: And direct funding reached 193 billion. Growth exceeded 9% year on year. Asset under management increased more than 10%. Asset under custody also continued to expand.
Speaker #3: And it is visible in the next slide. If there is one area that best illustrates the evolution of our business model, it is fees.
Speaker #1: This is one of the strongest indicators of our strategic evolution. The group is becoming increasingly diversified, increasing wealth management oriented, and increasingly focused on recurring customer revenues.
Speaker #3: The income is becoming an increasingly powerful growth engine. Quarterly fees reached $617 million and increased by 8.4% quarter on quarter and 9% year on year.
Speaker #1: This trend improves earning quality, improves resilience, and strengthens valuation fundamentals. Because high-quality assets generate long-term value creation. Let me now turn to costs. Second quarter operating costs were 867 million euro.
Speaker #3: Growth was driven by wealth management advisory activity and commercial banking fees. This is exactly the trajectory we outlined when presenting our strategic plan, and execution continues to validate that strategy.
Speaker #1: Down by 2.2% compared with the same quarter last year. The dynamic quarter on quarter is 1.1 up, almost absorbing inflation, labor contract renewal impact, and higher variable remuneration accruals linked to performance.
Speaker #3: Looking at the first half as a whole, fees increased to almost $1.3 billion. Growth reached 3.6% year on year. The direction is clear: more diversification, more recurring revenues, more resilience.
Speaker #1: Let me look at now at the first half cost evolution. In the old first half operating costs declined by 0.7% year on year. To 1.7 billion.
Speaker #3: It is the result of client relationship and advisory expertise, and demonstrates the value of our group distribution platform, combining synergistically major banca and Monte Paschi capabilities.
Speaker #1: This may appear straightforward. In reality, it is a significant achievement. We absorbed inflation. We absorbed labor contract renewals. We continue investing in strategic initiative and yet total operating costs still decline.
Speaker #3: Let's now look at what sits behind these terms in terms of commercial momentum. Commercial performance remained exceptionally strong. Customer financial assets reached $300 billion.
Speaker #1: The key takeaway is execution. Revenue growth is important, but sustainable shareholder value is created when revenues grow is accompanied by cost discipline. That combination is visible throughout our results.
Speaker #3: Wealth management gross inflow exceeded $6 billion. Mortgage production increased strongly. Consumer finance continued to expand. What these numbers really represent is trust—trust from households, from businesses, from communities.
Speaker #1: Turning to asset quality, as you can see, asset quality remains very solid. Cost and risk remain fully under control and fully aligned with our business plan trajectory.
Speaker #3: And trust remains one of the most valuable assets a bank can have. Monte Paschi is not simply a collection of assets. It is a network of relationships, knowledge, and trust built over generations.
Speaker #1: Empty ratio both gross and net remain at the best levels. And this reflects quality of our underwriting and quality of our risk management framework.
Speaker #1: Liquidity remains exceptionally strong. Counterbalancing capacity stands at almost 50 billion. The LCR increased to 169% and the NSFR remains at the level of 122%.
Speaker #3: Customer loans continue to expand, reaching $131 billion, up 1.8% quarter on quarter and up 5.6% year on year. Growth was broad-based: retail banking, consumer finance, and corporate investment banking.
Speaker #1: During the quarter we successfully completed additional wealth-safe funding transaction, including senior recovered bond issuances. The group continues to retain significant flexibility. Now capital. Capital remains one of the strongest differentiators of the group.
Speaker #3: We are businesses where relationships matter most. This is important because loan growth remained one of the clearest indicators of relevance within the real economy.
Speaker #3: Commercial direct saving reached $107 billion, up year on year and up sequentially. The important point is that customer balance remains stable despite a highly competitive environment.
Speaker #1: Our fully loaded courtier one 16.3%. An increase of 40 basis points during the quarter. Our capital buffer remains among the strongest in the sector.
Speaker #3: That stability provides funding strength. Funding strength supports lending growth, and lending growth supports the economy, and consequently, earnings generation. This is how our franchise value is created over time.
Speaker #1: Close to 680 basis point above regulatory requirement. Capital strength gives us three advantages. Flexibility to support growth. Flexibility to reward shareholders. And flexibility to evaluate strategic opportunities.
Speaker #3: Now, let's move to 100 Funding. 100 Funding reached $193 billion. Growth exceeded 9% year-on-year. Assets under management increased more than 10%. Assets under custody also continued to expand.
Speaker #1: In the current strategic contest, our capital position is one of the reasons why Monte Paschi can assess every strategic development from a position of strength.
Speaker #3: This is one of the strongest indicators of our strategic evolution. The Group is becoming increasingly diversified, more wealth management oriented, and increasingly focused on recurring customer revenues.
Speaker #1: Now, purchase price allocation. This slide provides an update on the purchase price allocation process related to Mediobanca. The process was substantially completed during the second quarter.
Speaker #3: This trend improves earnings quality, enhances resilience, and strengthens valuation fundamentals because high-quality assets generate long-term value creation. Let me now turn to costs. Second quarter operating costs were $867 million, down by 2.2% compared with the same quarter last year.
Speaker #1: The final allocation identified intangible assets including brand, value, customer relationship, and core deposits. Following the completion of the process, goodwill stands at approximately 2.2 billion euro.
Speaker #3: The dynamic quarter on quarter is 1.1% up, almost absorbing inflation. Labor contract renewal impact, and higher variable remuneration accruals linked to performance. Let me look now at the first half cost evolution.
Speaker #1: This milestone provides greater visibility and represents another important step in the integration journey. The journey that continues to progress according to plan. Let me briefly comment on Mediobanca's first half performance.
Speaker #3: In the first half, operating costs declined by 0.7% year on year, to €1.7 billion. This may appear straightforward, but in reality, it is a significant achievement.
Speaker #1: Mediobanca delivered a strong set of results. Confirming that the quality and the resilience of the franchise. Revenues increased to almost 2 billion euro. Net profit exceeded 710 million euro.
Speaker #3: We absorbed inflation. We absorbed labor contract renewals. We continue investing in strategic initiatives and yet total operating costs still declined. The key takeaway is execution.
Speaker #1: And return on tangible equity reached approximately 15%. Supported by record performances in corporate investment banking and consumer finance. The second quarter was particularly strong with revenues above 1 billion euro and net profit of almost 390 million euro.
Speaker #3: Revenue growth is important, but sustainable shareholder value is created when revenue growth is accompanied by cost discipline. That combination is visible throughout our results.
Speaker #3: Turning to asset quality, as you can see, asset quality remains very solid. Cost and risk remain fully under control and are fully aligned with our business plan trajectory.
Speaker #1: Growth was supported by multiple business engines including corporate investment banking, consumer finance, and insurance. While maintaining strong capital, excellent asset quality, and consistent ratio below 40%.
Speaker #3: MP ratio, both gross and net, remain at the best levels. This reflects the quality of our underwriting and the quality of our risk management framework.
Speaker #1: The wealth management franchise continued to stabilize during the quarter. Asset under management increased net outflows reduced significantly compared with the first quarter. I strongly believe that this is a strong signal how important and strong a powerful is a combination between Mediobanca and Monte Paschi.
Speaker #3: Liquidity remains exceptionally strong. Counterbalancing capacity stands at almost $50 billion. The LCR increased to 169% and the NSFR remains at the level of 122%.
Speaker #1: And I strongly believe that the trend that Montebanca is presenting will further improve providing even higher contribution to the total profitability of the group.
Speaker #3: During the quarter, we successfully completed additional wealth-safe funding transactions, including senior recovered bond issuances. The Group continues to retain significant flexibility. Our capital remains one of the strongest differentiators of the Group.
Speaker #1: Let me now show why the combined business mix is strategically important. This slide makes the evaluation logic of the group more explicit. Today our revenues basis supported by multiple high quality business line with significant weight of asset gathering and wealth management businesses.
Speaker #3: Our fully-loaded CET1 ratio increased to 16.3%, an increase of 40 basis points during the quarter. Our capital buffer remains among the strongest in the sector.
Speaker #1: This diversification is increasingly valuable and strengthens earnings sustainability. We are building a business model that is more balanced, more scalable, and better positioned for long-term value creation.
Speaker #3: Close to 680 basis points above regulatory requirements. Capital strength gives us three advantages: flexibility to support growth, flexibility to reward shareholders, and flexibility to evaluate strategic opportunities.
Speaker #1: This continue growth evolution supports a step up in earnings quality and over time a rerating of the group's valuation profile. This is precisely the direction outlined in our strategic plan.
Speaker #3: In the current strategic contest, our capital position is one of the reasons why Monte Paschi can assess every strategic development from a position of strength.
Speaker #1: Let me spend a moment on integration execution remains exactly where it should be. On track and on time. Over the last few months, we have moved from planning to implementation across all major work streams.
Speaker #3: Now, purchase price allocation. This slide provides an update on the purchase price allocation process related to Mediobanca. The process was substantially completed during the second quarter.
Speaker #1: We have completed the key corporate steps submitted the core regulatory filings and continue to work closely with the competent authorities as we target regulatory approvals during the third quarter.
Speaker #1: And the effectiveness of the reorganization in the fourth quarter. At the same time, business transformation initiatives are already being implemented. Client coverage models have been defined.
Speaker #3: The final allocation identified intangible assets including brand value, customer relationships, and core deposits. Following the completion of the process, goodwill stands at approximately €2.2 billion.
Speaker #3: This milestone provides greater visibility and represents another important step in the integration journey—a journey that continues to progress according to plan. Let me briefly comment on Mediobanca's first half performance.
Speaker #1: Commercial cooperation between networks and product factory is progressing. And the future operating model is taking shape. The integration of platform data and security infrastructure is progressing according to plan and remains fully aligned with our day one objectives.
Speaker #1: Equally important we have secured all the legal regulatory and compliance foundation required for a successful integration. The integration is really becoming an operational reality.
Speaker #3: Mediobanca delivered a strong set of results, confirming the quality and resilience of the franchise. Revenues increased to almost €2 billion. Net profit exceeded €710 million.
Speaker #1: And unlocking the full value of the combination. Let me conclude this section with what ultimately matters most. Value creation. Synergies progressing ahead of schedule giving comfort to deliver results even above the target of 2026.
Speaker #3: And return on tangible equity reached approximately 15%, supported by record performances in Corporate Investment Banking and Consumer Finance. The second quarter was particularly strong, with revenues above €1 billion and net profit of almost €390 million.
Speaker #1: On the revenue side, we are already seeing tangible results mainly from increasing collaboration between corporate investment banking by executing together with Monte Paschi joint leading lending and advisory transaction.
Speaker #3: Growth was supported by multiple business engines, including corporate investment banking, consumer finance, and insurance, while maintaining strong capital, excellent asset quality, and a consistent ratio below 40%.
Speaker #3: The wealth management franchise continued to stabilize during the quarter. Assets under management increased, and net outflows reduced significantly compared with the first quarter. I strongly believe that this is a strong signal of how important, strong, and powerful the combination between Mediobanca and Monte Paschi is.
Speaker #1: Distribution of Mediobanca certificate and asset management products launch of lending products factories distribution. On the cost side, the group is capturing benefits from optimizing procurement and shared supplier agreements.
Speaker #1: Launching joint tenders and removing duplication like in provider or facility contracts. On the funding side, we continue to benefit from issuance executed at higher spreads leveraging the scale and the strength of the combined group.
Speaker #3: And I strongly believe that the trend that Montebanca is presenting will further improve, providing an even higher contribution to the total profitability of the group.
Speaker #3: Let me now show why the combined business mix is strategically important. This slide makes the evaluation logic of the group more explicit. Today, our revenue base is supported by multiple high-quality business lines, with significant weight in asset gathering and wealth management businesses.
Speaker #1: Let me now address the offer announced by Intesa Sanpaolo. As already communicated by the board, the preliminary observations published on 16 July remain fully valid.
Speaker #3: This diversification is increasingly valuable, and this strengthens earnings sustainability. We are building a business model that is more balanced, more scalable, and better positioned for long-term value creation.
Speaker #1: The Intesa Sanpaolo does not currently appear to fully compensate Monte Paschi shareholders for control synergies and franchise value. While exposing them to execution and regulatory risks.
Speaker #3: This continued growth and evolution supports a step up in earnings quality, and over time, a rerating of the Group's valuation profile. This is precisely the direction outlined in our strategic plan.
Speaker #1: While conversely Monte Paschi plus Mediobanca strategy as a strong industrial rationale. And the clear execution profile. Which among other things envisages significant value creation and cumulative shareholder distribution of 16 billion euro over the planned period.
Speaker #3: Let me spend a moment on integration. Execution remains exactly where it should be: on track and on time. Over the last few months, we have moved from planning to implementation across all major work streams.
Speaker #1: I have consistently supported banking consolidation. Scale matters investment capacity matters technology matters. But scale should strengthen players. Not reduce diversity. Consolidation should ultimately be evaluated through industrial logic and value creation not fragmentation.
Speaker #3: We have completed the key corporate steps, submitted the core regulatory filings, and continue to work closely with the competent authorities as we target regulatory approvals during the third quarter.
Speaker #3: And the effectiveness of the reorganization in the fourth quarter. At the same time, business transformation initiatives are already being implemented. Client coverage models have been defined.
Speaker #3: Commercial cooperation between networks and the product factory is progressing, and the future operating model is taking shape. The integration platform, data, and security infrastructure are progressing according to plan and remain fully aligned with our day-one objectives.
Speaker #1: Competition remains a fundamental source of innovation customer service and resilient and competition survives because there is a plurality of players. A national champion should strengthen the country's competitive fabric.
Speaker #3: Equally important, we have secured all the legal, regulatory, and compliance foundations required for a successful integration. The integration is really becoming an operational reality.
Speaker #1: Not reduce it. Otherwise the crown may become larger but the kingdom becomes smaller. That's why the board with the support of his advisor will continue to conduct his assessment independently and rigorously.
Speaker #3: And brings us closer to unlocking the full value of the combination. Let me conclude this section with what ultimately matters most: value creation. Synergies are progressing ahead of schedule, giving comfort that we can deliver a result even above the target for 2026.
Speaker #1: The objective is clear. To identify the optimal path that maximize value for Monte Paschi stakeholder while preserving the integrity of the franchise. Let me conclude with three final observation.
Speaker #3: On the revenue side, we are already seeing tangible results, mainly from increasing collaboration between Corporate Investment Banking by executing together with Monte Paschi joint leading lending and advisory transactions.
Speaker #1: The first half confirms the strengths of our operating performance. Net profit exceeded 1.1 billion euro. Profit before tax approached 2 billion euro. Double digit growth dynamic year on year.
Speaker #3: Distribution of Mediobanca certificate and asset management products, launch of lending product factories distribution. On the cost side, the group is capturing benefits from optimizing procurement and shared supplier agreements.
Speaker #1: Commercial momentum remain strong. Capital continued to grow. And asset quality remain excellent. The integration with Mediobanca continues to validate its industrial rationale. Execution is progressing according to the plan.
Speaker #3: Launching joint tenders and removing duplication, like info provider or facility contracts. On the funding side, we continue to benefit from issuance executed at higher spreads, leveraging the scale and the strength of the combined group.
Speaker #1: Synergies are materialized. Making us comfortable to exceed our original target. Our confidence in the future continues to increase and the visibility provided by current performance allows us to rise our guidance for 2026 profit before tax to 3.6 billion euro.
Speaker #3: Let me now address the offer announced by Intesa Sanpaolo. As already communicated by the Board, the preliminary observations published on July 16 remain fully valid.
Speaker #1: Finally I would like to say that like in the Odyssea poem which now has become a must see movie some routes close and others open.
Speaker #3: The board's preliminary view is that Intesa Sanpaolo does not currently appear to fully compensate Monte Paschi shareholders for control synergies and franchise value, while exposing them to execution and regulatory risks.
Speaker #1: From our safe harbor we will continue our own journey. Fully committed to exploring every strategic option that can create long term value for our stakeholders.
Speaker #1: Thank you I'm now happy to take your question. Thank you sir. Excuse me this is the course conference operator. We will now begin the question and answer session.
Speaker #3: Conversely, the Monte Paschi plus Mediobanca strategy has a strong industrial rationale and a clear execution profile, which, among other things, envisages significant value creation and cumulative shareholder distribution of €16 billion over the planned period.
Speaker #1: Anyone who wishes to ask a question may press star and one on their touchstone telephone. To remove your question press star and two. The first question comes from Sophie.
Speaker #1: Petersons of Goldman Sachs.
Speaker #3: I have consistently supported banking consolidation. Scale matters. Investment capacity matters. Technology matters. But scale should strengthen players, not reduce diversity. Consolidation should ultimately be evaluated through industrial logic and value creation, not fragmentation.
Speaker #2: Yes thanks a lot for taking my question. So my first question would be on on the strategic options that that you're evaluating. Could you maybe elaborate a little bit more here also what the timetable is how long it would take to get the EGM approval or or do call sorry an EGM so if you could kind of discuss the strategic options would it also would you also consider selling the general estate and and yeah what what are you kind of thinking about.
Speaker #2: And then my second question would be on on dividends how should we think about potential interim dividend paid in in the like or announced with the third quarter do you still consider interim dividends or is this kind of off the table.
Speaker #2: Thank you.
Speaker #3: Okay so I I just take the question regarding the strategic option. So I believe the real question is which strategic strategic path best unlocks the value.
Speaker #3: And I believe the best outcome is the one that delivers full value and carries forward what we have built rather than fragmented it. So as you know building the best strategic option is much like assembling a mosaic.
Speaker #3: For a long time the pieces kept moving then one by one the picture come. Into focus. So we are fully committed to explore any opportunity.
Speaker #3: With the clear direction to optimize the value for our shareholders.
Speaker #4: Good morning. On the timetable it takes 30 days to call an EGM. So we are we will be on time anyway. As regards in the interim the question on interim dividend the assessment will be done in the contest of the analysis of the strategic options.
Speaker #4: That as the CEO said we will carry up following a rigorous approach and aimed at maximizing long term value for all stakeholders.
Speaker #2: Okay thank you. And and EGM just on the according the EGM you haven't you haven't done it yet right.
Speaker #4: We haven't called an EGM yet. As as said there will be anyway an EGM that will be called for the integration so for the merger with the Mediobanca.
Speaker #4: That is expected based on the current timetable to be convened in the first half of September. So the notice will be issued in the first half of September.
Speaker #2: Okay thank you.
Speaker #1: The next question is from Luis Pratas of Autonomous.
Speaker #5: Hi good morning everyone. Thank you for taking my questions. My first one is on the on the general estate. You know there has been plenty of speculation about a sale of this stake.
Speaker #5: I wanted to ask you how strategic is the general estate for you. How much capital do you think you could release if there was a sale?
Speaker #5: And instead of a sale could you consider distributing the stake in kind to your own shareholders? And then my second question is again on on defensive actions.
Speaker #5: In this case related with the Banco BPM. So you know the last Friday we have Banco BPM board of directors terminating the major of discussions with Monte Paschi I wanted to ask you whether you could provide extra color on what went wrong for no agreement to be reached.
Speaker #5: And whether investors should now close this this chapter with Banco BPM or could you become a bit more aggressive and still pursue Banco BPM in a takeover offer as speculated in the price.
Speaker #5: Thank you.
Speaker #3: Okay thank you. Thank you for raising the this topic about. Generale. So I describe the stake in generale as a nice to have. Because it represents an important source of value and strategic optionality for Monte Paschi and Mediobanca group.
Speaker #3: I have to say that it also seems to be regarded as a particularly relevant nice to have by a number of other market participants.
Speaker #3: Any future decision will be assessed in the interest of Monte Paschi shareholder. Taking into account the value of the stake the capital and the regulatory implication market condition and the group's industrial strategy.
Speaker #3: As far as BAMI so I would separate the two points. The decision to discontinue the consultation was taken and communicated by Banco BPM board of directors.
Speaker #3: It is not for Monte Paschi to comment on the counterparty's internal decision making process. What I can say that we didn't approach this opportunity as detectors.
For a time, the piece is kept moving. Then, one by one, the picture comes into focus.
so,
Speaker #3: We analyze with convention because we saw the potential to create a leading Italian banking and financial group capable to delivering significant value for the shareholder of both banks.
We are fully committed to exploring any opportunity.
with the
clear direction to optimize the value of our shareholders.
Speaker #3: As Banco BPM itself acknowledge the industrial rationale was significant. However the discussion didn't progress to a stage where structural evaluation times could be fully discussed.
Speaker #3: And assessed. Banco BPM choose to discontinue the consultation before that point. So we respect the decision and we move. Forward accordingly. On the second question I don't honestly think investor should think in terms of chapter being closed or open.
Good morning, uh, on the 10th, 30 days to call an egm. So we are, uh, we will be on time. Anyway, uh, as regards, the, the question on interim dividend. Uh, the assessment will be done in the contest, uh, of the analysis of the strategy options. Uh, that, uh, as the SEO said, we will carry out following a regrows approach and aimed at maximizing long-term value for our stakeholders
Okay, thank you. And, um, just on the recording—the EGM—you haven't, uh, you haven't done it yet, right?
Speaker #3: Today there is no transaction under discussion with Banco if strategic opportunities arise because our focus is not on pushing transaction. Our focus in creating value for Monte Paschi shareholders.
We haven't called any gem yet. As said there will be any way, uh, any gem that will be called for the integration. Uh uh, so for the merger with the medio Banker that is expected uh based on uh the current in table to be convened uh in the first half uh of September. So they notice will be issued in the first half of September.
Okay.
Speaker #3: So as I said the strategic opportunities arise we will assess them with the same discipline. We always have industrial rationale value creation capital efficiency execution certainty regulatory feasibility.
Uh, good morning, everyone. Thank you for taking my questions.
Speaker #3: And and perhaps there is where this is practically where a maritime analogy is useful. No as I mentioned before like the Odyssea poem some routes close and others open.
Uh, my first one is on the, on the Generalist. You know, there has been plenty of speculation about a sale of this. Uh, strike—I wanted to ask you, how strategic is the Generalist for you?
How much capital do you think you could release if there was a sale?
And instead of a sale, could you consider distributing the stake in kind to your own shareholders?
Speaker #3: And I have to say that every experience navigators knows that winds can change. Sometimes the carry you towards new destination. Sometimes they bring you back to ports from which you had previously sailed away.
Uh, and then my second question is again on, um, on the sensitive actions, in this case related a bit to Banco BPM.
Speaker #3: So our responsibility is not to predict the wind because it's quite difficult. But to be ready to capture it whenever it serves the interest of our shareholders.
Speaker #5: On the capital treatment of generale currently in our regulatory capital. Around four billion euro is goodwill. Which is currently deducted pro rata. Then following the merger with Mediobanca will be fully deducted.
Uh, so, you know, last Friday we had Banco BPM's board of directors terminating the majority of discussions with MPS. I wanted to ask whether you could provide extra color on what went wrong for no agreement to be reached, and whether investors should now close this chapter with Banco BPM, or could you become a bit more aggressive and still pursue Banco BPM in a takeover offer, as speculated in the press? Thank you.
Okay, thank you. Thank you for raising this topic, uh, about generality.
So I describe the stake in general as a nice-to-have.
Speaker #5: Around two point five billion is deducted. So on top. And the rest to get to our carrying value which is currently six point nine billion euros is risk weighted assets at one hundred fifty percent.
because it represents an important source of value and strategic optionality for, uh,
Multi Group.
I have to say that it also seems to be regarded as a particularly relevant 'nice to have' by a number of other market participants.
Any future decision will be assessed in your interest regarding multi-share orders.
Speaker #1: The next question is from Lorenzo Giacometti of Intermonte.
Speaker #2: Yes good morning. Thank you for taking my questions. I have three. So the first one is on fees. rose eight point four percent quarter on quarter.
They can go into account: the value of the stake, the capital, and the regulatory implications, market conditions, and the group's industrial strategy.
As far as.
Balmy.
Uh,
Speaker #2: With the release that was flagging a few large larger CIB transactions. So I was wondering how much of this quarter's fee level is one of deal driven versus a sustainable run rate.
So, uh, I would, uh, separate the two points.
The decision to discontinue the consultation was taken and communicated by the Bank of BPM board of directors.
Speaker #2: And what's the underlying recurring fee trajectory. For the remaining part of the year. And the second one is on trading. Which was I mean pretty pretty strong for for the first half.
It is not for me to comment on the Contra parties' internal decision-making process.
What I can say is that we didn't approach this opportunity as the factors.
Speaker #2: I was wondering if you can give us some color about the yeah again the trajectory on of this second half of 2026. And the third one is again on on the strategic options.
We analyze.
Speaker #2: So can you be a little bit more specific on what what is options actually are on the perimeter you're looking at. And on the potential time frame of the potential decisions.
Group capable of delivering significant value for the shareholders and banks.
As Bank of BPM itself acknowledges, the industrial was significant.
Speaker #2: And if a credible combination I mean were to present itself what are the two or three non negotiable conditions the board would require before engaging.
However, the discussion didn't progress to a stage.
where,
Speaker #2: Thank you.
Structure evaluation times could be fully.
Discussed and assess.
Bank of BPM.
Choose to discontinue the consultation before that point.
So, we respect the decision, and we move forward accordingly.
On the second question, I don't honestly think investors...
Speaker #3: Okay so I will take the the the question regarding fees and then the other two strategic question right on option and what is not negotiable on.
You should think in terms of a chapter being closed or open.
Today, there is no transaction under discussion with Banco.
if strategic opportunities.
Speaker #3: As you said right. Okay let's start from the fees. I think as I mentioned during our my presentation this is a key pillar of our strategic plan.
Arise. Because
Our focus is not on pushing transactions. Our focus is on creating value for...
Um, multi-party shareholders.
Speaker #3: We strongly believe that we have a huge potential in terms of network franchise. So both institutions in this quarter there was a particular high performance from Mediobanca.
so,
As I said, as strategic opportunities arise, we will assess them with the same discipline we always have.
Industrial evaluation, capital efficiency, execution, certainty, regulatory feasibility.
Speaker #3: From some transaction connected with performed by corporate investment banking. Ideally believe that despite this was an important transaction so we can consider as exceptional one my view on the potential Mediobanca is that their we can really aim at getting significant higher contribution going forward.
And perhaps that is where—
this is practically where
A maritime analogy you’ll know, as I mentioned before.
like,
The Odyssey appointment: some roots are closed and others open.
And they have to say that these are heavily experienced navigators.
Knows that wins can change.
Speaker #3: So what we can consider as exceptional one according to me can be considered like recurrent in a very short period of time. The combination of Mediobanca with Monte Paschi is a very successful strong industrial powerful combination.
Sometimes they carry you towards new destinations.
Sometimes they bring you back to ports from which you had previously sailed away.
So our responsibility is not to predict the wind, because it's quite difficult, but to be ready to capture it whenever it serves the interests of our shareholders.
Speaker #3: So having said that in terms of guidelines as we were already mentioned in the previous presentation we believe the fees and commission will keep having a positive trend as usual in the third quarter.
On, uh, the capital, uh, treatment of a general currently, uh, in our, uh,
Speaker #3: We're going to have our all period. But I believe that also quarter on quarter year on year we will show a positive dynamic. And we are fully focused on getting this trend in a growing mood considering that the synergies that we plan to realize with Mediobanca are really reaching a level that make us thinking there can be even above the target we set in our business plan.
Regulatory capital, uh, around, uh, €4 billion is goodwill, uh, which is currently deducted. Uh, then, following the merger with MU Bank, will be fed around €2.5 billion is, uh, uh, deducted, so on top, and the rest, uh,
To get to our carrying value, which is currently €6.9 billion, is risked assets at 250%.
Speaker #3: So positive trend thanks to the strengths of the two franchises. Now I think on strategic option I already mentioned it's quite difficult to now to go deeper in what was the key message we passed during the presentation.
The next question is from Lorenzo Jachti of Inter Me.
Speaker #3: As we were discussing and during the board in July and also recently and I think is quite well described what is considered by the board important in our press release I want just additionally to mention that we are looking for strategic option that will generate significant value for our shareholder for all stakeholder aiming at preserving the integrity of our institution.
Yes, good morning. Thank you for taking my questions. Uh, yeah, 3. So the first 1 is on fees, uh basically the fees Rose 8.4% Quarter on quarter with the release. Uh uh that was flagging, a few large larger, CIB transactions. So I was wondering how much of this quarters of fee level is 1 of The Driven versus a sustainable run rate and what's the underlying
Speaker #3: And I think this is one of the most important aspect in the direction that the board expressed with the communication on the 16th of July.
For the remaining part of the year and the second 1 is on trading which was, I mean, pretty, pretty strong for for the first half. I was wondering if you can give us some color about the yeah. Again, the trajectory on of the second half of 2026 and the third 1 is again on on the Strategic options. Uh, so um, can you be a little bit more specific on what? Uh, what is options actually are on the 3 meter you're looking at and on the potential time frame of the potential decisions and if a credible combination I mean were to present itself. What are the 2 or 3 non-negotiable conditions the board would require before engaging thank you.
Speaker #3: But not because we believe and there is a sense of tradition on that. Just because I strongly and personally believe that breaking up a network we are not increasing value.
Okay, so I will take the question regarding fees, and then, uh...
the other 2 strategic, uh,
Speaker #3: Not only for stakeholders but also for the economy of the country. And that's why we are fully committed in looking for solution that will generate additional value for all stakeholders.
question right on option and
What is not negotiable, as you said, right? Okay, let's start from the fees. I think, as I mentioned during my presentation, this is a key pillar of our strategic plan.
Speaker #3: And the integrity of the network for us is an important driver of this target.
We strongly believe that we have significant potential in terms of network.
franchise or both, uh,
Uh, institutions.
Speaker #1: On trading yeah on trading is slightly more difficult to forecast compared to an AI and fees. First and second quarter were particularly good. Having said that we still expect a relevant contribution also for the next quarters.
In this quarter, there was a particular
uh,
High performance from MedU, banca from Saint. Transaction connected with, uh, performed by Corporate Investment Banking.
Speaker #1: Thanks to our activity. Which is mainly client driven and also to the expertise of our markets people both at Mediobanca and Monte Paschi in structuring solutions for our clients.
I really believe that, despite this, it was an important transaction, so we can consider it as exceptional, one-off.
My view on the potential Mediobanca is.
uh, that, uh,
There, we can really.
Speaker #2: Okay thank you. On on synergies as as you said I mean synergies may prove even higher than than your seven hundred million target. But do you have like any color about how much higher were yeah may may they prove or or not.
Aim at getting significantly higher contribution.
Going forward.
So, what we can consider as exceptional, according to me, and be considered...
Like recurrent.
In a very short period of time.
The combination of Medio Bank with Monte Paschi is a very successful, strong industrial.
Speaker #2: Thanks.
Powerful combination.
So,
Speaker #3: This is a moving target. I have to say because every day we are enjoying a strong cooperation between the teams. And so I can say just based on what we are observing in terms of trend at least we can have a growth compared to the original target of other one hundred million euro.
Having said that, in terms of, uh,
Guidelines, as we already mentioned.
In the previous presentation, we believe that fees and commissions will keep having a positive trend as usual. In the third quarter, we are going to have our full period, but I believe there's also quarter on quarter, year on year, we will show a positive dynamic.
And we are fully focused on getting this trend growing.
Speaker #3: But that's as I said is something that we are going to explore and I believe can be a target that will make us thinking more and more about how powerful is our combination.
...mood, considering that the synergies that we plan to realize with Mediobanca are really...
reaching a level that, uh, makes us
thinking that can be even above the target we set in our
Speaker #1: Okay thank you very much.
Business plan.
Speaker #4: As a reminder if you wish to register for a question please press R and 1 on your touch tone telephone. The next question is a follow up from Luis Pratas of Autonomous.
So, positive trend, thanks to the strength of the two, French.
now, uh,
Speaker #2: Hi there. Hi there again. I I I have another question in case you decide to make an extraordinary distribution. I wanted to ask you you know what's the timeline there and for instance can it be approved quite swiftly by the by the ECB and if I'm not mistaken your management target in the business plan is thirteen percent.
I think on the strategic option, I already mentioned it's quite difficult now to...
Go deeper in, what was?
The message.
We passed during the presentation.
As.
Speaker #2: But you you never actually issued like any eighty ones for instance. So what level can you go down if you wanted to make an excess capital distribution tomorrow.
We were discussing and communicating during the Board in July and also recently, and I think it is quite well.
described.
What?
Is considered by the board.
Speaker #2: Thank you.
Important in our press release.
I just want to additionally mention what we are looking for.
Strategic option that will.
Generate significant value.
For our.
Shareholder for all stakeholder.
Aiming at preserving.
The integrity.
Speaker #1: So I start from the last question. Our common equity tier one ratio appetite is thirteen percent. So I think in general terms we all said that this is a reasonable level to a comfortable level to run the business.
...of our institution. And I think this is one of the most important aspects.
in the direction that the Board expressed with the
the communication on the 16th of July, but not because
Speaker #1: Then on your question to eighty one we might fill in the bucket quite easily I think we have a queue of investors that would love to subscribe our potential eighty ones.
We believe, and uh, there is a sense of, uh,
tradition on that, just because
Speaker #1: On the timeline as mentioned you need to to call for a general shoulders meeting which takes thirty days and so we think we are fully on time to potentially distribute if the assessment of strategic options will lead us there.
I strongly and personally believe that breaking up a network, we are not increasing value.
Not only.
But also for the economy of the country.
And that's why we are fully committed to looking for solutions that will
generate additional value.
Speaker #1: An extraordinary dividend.
For all stakeholders.
Speaker #2: I'm sorry just another follow up. But in terms of the ECB how much time does it take for them to analyze that possibility. Thank you.
And, uh, the integrity of the network, for us, is an important driver of this target.
Speaker #1: We think that the timetable would be in line with let's say the time of the offer which is outstanding.
On uh trading. Uh yeah on trading is slightly more difficult to forecast compared to when I in fees first and second quarter uh uh where particularly good uh Amy said that uh we still expect the relevant contribution also for the next quarters.
Speaker #2: Thank you.
Speaker #4: The next question comes from Hugo Cruz of KBW.
Thanks uh to our activity which is uh uh mainly client driven and also to the expertise of our markets. People both at Medio bank and multi in structure in solutions for our clients
Okay, thank you.
Speaker #5: Hi hello. Thanks for the time. I have a few questions so first of all Danish compromise I think it was fifty basis points not including your targets.
Speaker #5: Do you still expect to get that benefit and what do you think you can do with the capital released by the implementation of Danish compromise.
Speaker #5: Could it be distributed second the DT absorption I'm not sure so you know the guidance was half a billion a year do you you know I think you probably done three hundred million roughly in the first half so can you update us on the timing of this do do you think you can actually absorb them faster.
On synergies as, um, as you said. Um, I mean, synergies may prove even higher than than your 700 million Target. But do you have, like, any color about, uh, how much higher, uh, where, um, um, yeah, may may be approved or not.
Thanks.
This is a moving target, I have to say, because every day we are enjoying, uh, strong cooperation between the teams.
and so,
Speaker #5: And if you could give some guidance there. And then the third question on you know you gave the PBT guidance which is very helpful which is after restructuring costs.
I can say, just based on what we are observing, uh...
In terms of trend, at least.
We can have a grow.
Speaker #5: Is that still you're still assuming three hundred million of restructuring costs or or or is it different for this year. And could you give us guidance for the OPEX before restructuring costs for the full year.
Compared to the digital target of another €100 million.
As I said, this is something that we are going to explore.
Speaker #5: It would be very helpful. Thank you.
And, uh, I believe it can be a target that will make—
Us. Uh, thinking.
Uh, more and more about how powerful our combination is.
Okay, thank you very much.
As a reminder, if you wish to register for a question, please press star and 1 on your touchtone telephone.
The next question is a follow-up from Louise Prattas of Autonomous.
Speaker #1: So on the Danish compromise we have an outstanding question to the ABA so waiting for for the answer. As you know let's say the Danish compromise per se should not lead to regulatory arbitrage even said that we think that in case it is extended to the consolidated group I we think that would be distributable.
Hey there, hi there again. Uh, I—I—I have another question. In case you decide to make an extraordinary distribution, I wanted to ask you, you know, what's the timeline there? Uh, and for instance, can it be approved quite simply by the ECB?
If I'm not mistaken, your management target in the business plan is 13%, but you never actually issued, like, any 81, for instance. So, what level could you go down to if you wanted to make an excess capital distribution tomorrow?
Thank you.
Speaker #1: Then second question on DT absorption yeah in the first half the absorption was around the utilization was around three hundred million euros actually the underlying business is doing particularly well.
Speaker #1: So compared to the guidance of around five hundred million euro per year we can we cannot exclude that there might be an acceleration. In the utilization third point on restructuring cost we are following let's say our business plan so the guidance is confirmed on operating cost we go on with our optimization activities and the synergies we with Mediobanka to offset as much as possible all the inflationary effects such as for example the renewal of the national labor contract.
So, um, I start from, uh, uh, the last question, uh, our uh, uh, communicate 1 ratio appetite is 13%. Uh, so I think, in general terms, we always said that that this is a reasonable level to, uh, a comfortable level to run the business. Uh, then on your question 281, uh,
Speaker #1: So yeah.
Speaker #5: Thank you.
Speaker #4: The next question is one one one Pablo Lopez of Santander.
Speaker #6: Yes good morning for taking my questions. Sorry if any of them has been already answered. Join a bit later. My first question is regarding the strategic options and how do you see the passivity rule if you see any any any limitation there.
We might fill in the bucket quite easily. Think we have a queue of investors that would love to subscribe our uh, potential 8 ones, uh, on the timeline, as mentioned, uh, we need to to call for a general shoulders meeting uh, which takes 30 days. Uh, and so we think we are fully on time uh to potentially distribute if the assessment of the Junctions will lead us there. Mr. D.
I'm sorry, just another follow-up, but in terms of TCB, how much time does it take for them to analyze that possibility? Thank you.
Speaker #6: My my second question is regarding a potential disposal of the stake of the the government and if you have any comment on this one.
Bowler.
uh, would be in line, uh, with, uh, let's say, uh, the time of, uh, the, uh,
Speaker #6: And lastly the third question is on commercial activity. If you have seen any increasing competition from the the the two large banks on corporates mainly and.
Offer, which is outstanding.
Speaker #6: Is and and in deposits customer deposits how you see the the evolution and and competition there as well. Thank you.
The next question comes from Hugo Cruise of KBW.
Um, hi, hello. Thanks for the time. I have a few questions. So, first of all, Danish Compromise—I think it was 50 basis points, not including your targets. Do you still expect to get that benefit, and what do you think you can do with the capital released by the implementation of the Danish Compromise? Could it be distributable?
Speaker #3: Okay let's start with strategic option because I'm I'm going again to to repeat that the what I said before the optimal outcome is whichever parts create the greatest long term value for our shareholder why.
Um, second the DT absorption.
Um, I'm not sure. So, you know, the guidance was also €1 billion a year due to, you know, I think you probably did €300 million roughly in the first half. So can you update us on the timing of this? Do you think?
Speaker #3: Serving the integrity of a our franchise. Now clearly we cannot comment on the stake of the government and the third question was regarding competition.
You can actually absorb them faster. And if you could give some guidance there,
And then the third question on, um,
Speaker #3: I think I was mentioning before we are gaining market share is a trend that is continuing quarter on quarter by quarter and I strongly believe that is a trend that as is based on sustainable achievement I think is a trend that we can preserve competition is strong as I mentioned also in terms of deposit among that as usual we have a double approach on retail for us is strategic and.
You know, you gave the PBT guidance, which is very helpful, which is after restructuring costs. Is that still—you're still assuming €300 million of restructuring costs, or is it different for this year? And could you give us guidance for the Opex before restructuring costs for the full year? That would be very helpful. Thank you.
Speaker #3: So we are using an approach that can also use and and leverage on prices while on corporate the is much more tactical so we like to have deposit when customer is working with us and providing additional business that can generate additional fees for us.
So uh, on the dash compromise, we have an outstanding question on uh uh to the ABA. Uh so uh waiting uh uh for uh for the answer. Um as you know uh let's say the Danish compromise per se should not lead to a regulatory. Arbitrage even said that uh we think uh that uh in case uh it is uh extended that to the Consolidated. Um,
Uh, group—uh, we think that would be distributable.
Speaker #3: So strong competition but we are strong as well. So we will keep our pace and trying to even overperform compared to the market. Sorry regarding the passivity I think is quite clear the general principle principle we have an.
Uh, then second question on the, the absorption. Yeah, in the first half, the absorption was around, um, due to utilization was around 300 million euros. Um, actually the underlying business is doing particularly well, uh, so compared to the guidance of around 500 million euro period. We can we cannot exclude that, uh, uh, there might be an acceleration, uh, in the utilization.
Speaker #3: Obligation to look for the best solution that can improve and maximize the value for our shareholder there are rules and we are fully respecting this rule and we will keep paying a lot of attention to that.
Third Point, uh, on, uh, researching cost, uh, we are following, uh, let's say our business plan. So the guidance, uh, is confirmed on operating cost, uh, we go on with our optimization activities and the synergies, uh, we, uh, with
MediaBank, uh, to, uh, offset as much as possible all, uh, the, um, inflationary effects, such as, for example, the renewal, uh, of the initial-level contract. So,
Speaker #3: But it's clear that we have a duty the duty is to look for the best solution for our all our stakeholders.
Yeah, thank you.
The next question is from Pablo Lopez of Santander.
Speaker #6: Okay thank you.
Speaker #4: The final question is a follow up from Luis Pratas of Autonomous.
Speaker #1: I I again on the three point six billion pre-tax profit guidance could you please provide a bit more detail on this guidance especially on the core lines so NII fees revenues costs cost of risk.
Uh, yes, uh, good morning for taking my questions. Uh, sorry is, uh, any of them has been already answered? Uh, join a bit later. Uh, my first question is regarding the Strategic options. Um, and how do you see the possibility? Uh, rule if you see any any, any limitation there? Um, my second question is regarding a potential. Disposal of the stake, the the government. And if you have any comments,
On this 1.
Speaker #1: Thank you.
Speaker #3: So we are already I think in the middle of the third quarter and looking at the results of the second quarter and the six months I think is quite easy to understand if we give this guideline how much will be the performance in the second part of the of of the year so what really we can say that we plan to have a growing trend in terms of operating income then it's clear that as Andrea was mentioning before also we want to pay attention to cost and so most to be almost in line even if on the fourth quarter we can have a a sort of seasonality so some cost will appear but anyway overall the trend of cost here on year will be almost in line but slightly higher but even better what we plan.
And lastly, the third question is on commercial activity. If you have seen any increasing competition from the two large banks or corporates mainly in the same, is...
And and in deposits.
Okay, let's start with strategic options, because I'm...
I'm going again.
To repeat that, what I said before: the optimal outcome is whichever path creates the greatest long-term value for our shareholders, while preserving the integrity of our franchise.
Now, clearly, we cannot comment on the stick.
Of the government.
And, uh, the third question was, uh,
Regarding the competition. I think.
I was mentioning before, um,
We are gaining market share, and this is a trend that is continuing quarter after quarter.
Speaker #3: So the cost of risk as we said will be in line with our guideline so it's easy to understand line by line what is the expected trend for the second half of the year.
And I strongly believe that is a trend that is based on.
Sustainable.
Uh, achievement, uh, I think it's a strength that we can preserve.
Speaker #4: Mr. Lovaglio that was the final question sir. Back to you for any closing remarks.
Competition is strong, as I mentioned. Also, in terms of deposits on that, as usual, we have...
A double approach on retail.
Speaker #3: Okay so thank you very much. I'm I'm thinking if I have to say see you in November or eventually earlier. Let's see. Thank you very much.
For us, it is strategic. And so, we are using an approach that, uh, can...
Also use.
And leverage on prices.
While on corporate, it is much more tactical. So we like to have deposit.
When a customer is working with us and providing additional, uh, business, that can...
generate additional fees for us.
There is strong competition, but we are strong as well. So we will keep our patience and continue to train to even over-perform compared to the market.
Sorry, regarding the possibility, I think it is, uh, quite...
Uh, clear, the general principle, principle.
uh,
We have an obligation to look for the best solution.
that can uh, uh,
Improve and maximize the value for our shareholders. There are rules, and we are fully respecting these rules, and we will keep, uh,
Paying a lot of attention to that.
uh,
But it's clear that we have a duty. The duty is...
to look for the
best solution for all of us, our stakeholders.
Okay, thank you.
The final question is a follow-up from Luis Pratas of Autonomous.
Hi again.
On the 3.
Million, uh, pre-tax profit guidance. Could you please provide a bit more detail on this guidance, especially on the core lines—so net interest income, fees, revenues, costs, and cost of risk? Thank you.
So we are already, I think, in the middle of the third quarter.
And looking at the results of the second quarter and the six months,
Uh, I think it's quite easy to understand if we give these guidelines.
How much will the performance be in the second?
part of the,
Of of the year.
So, what, uh, really we can say is that, uh,
We plan to see a growing trend.
In terms of operating income,
Vanna, it's clear that, as Andrea was mentioning before...
Also, we want to pay attention to cost.
and so,
Most to be almost in line.
Even if on the fourth quarter, we can have a
a sort of seasonality, so some costs will appear. But anyway, overall, the trend of costs—
Uh, year on year.
Uh,
It will be almost large in line, but slightly higher.
Even better. What we plan—so the cost of risk, as we said, will be in line with our guidelines. So it's easy to understand.
Line by line. Uh, what is the expected trend?
For the second half of the year.
That was the final question, sir. Back to you for any closing remarks.
Okay, so thank you very much.
I'm, I'm thinking, if I have to say see you,
In November.
Or eventually earlier.
Let's see. Thank you very much.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.
From your back-in-the-day trap.
Yes, maybe. We will see for the rest.
Of your friend. I want to guard your dreams and visions. Just wrap your legs around these rims and strap your hands. Drop my engines together. We could break this trap. When we're up, so we draw, baby, we'll never go there.
