Banca Monte dei Paschi di Siena

Good morning, this is the Coral School Conference Operator. Welcome and thank you for joining the NPS Group fourth quarter and full year 2025 preliminary results presentation. 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. At this time, I would like to turn the conference over to Mr. Luigi Lovaglio, Chief Executive Officer and General Manager. Please go ahead, sir.

Thank you. Good morning. Thank you for joining us for the presentation of our fourth quarter and full year 2025 financial results. Today is more than a quarterly presentation. It marks a milestone in our history. We are at the gateway to what Montepassi Group will become. A decisive turning point that sets the direction of the group for the years to come. It is the first time we stand here as Montepaschi plus Mediobanca with consolidated results that speaks clearly and proudly about what we are accomplishing together. What truly matters today is that we now have a tangible evidence, not forecasts, not expectations, that Montepaschi plus Mediobanca combination is grounded in a strong industrial rationale, strategic coherence, and the strength to create lasting value for our clients, our people, our shareholder, and for the entire economy as a whole. As Montepaschi was presenting another quarter and three years of strong, stand-alone results, Our business continues to perform solidly across all dimensions, particularly in fees and commission income, supported by robust commercial dynamics. We are offering one of the highest dividend yields in European banking, currently standing at 10%. All this provides a solid foundation on which to build the future of the Montepaschi Group, a leading competitive force in the banking landscape, thanks to the complementarity of the two platforms, Montepassi and Mediobanca, with a diversified, resilient, and customer-driven business mix. We are accelerating the integration process with Montepassi, moving forward a specialized business model that enhances the brand value, capabilities, and talents of both organizations, With Mediobank as legal entity focused on corporate investment banking and private banking activities, embracing a very ambitious and deserved path for growth and development. We confirmed that our target group structure would be fully aligned with our industrial project to maximize the value creation and integration level. We will present our business plan for the combination with Mediobanca on February 27, as we are finalizing the guidelines for the group's reorganization. This will allow us to build a powerful, profitable, and sustainable business model. Our clients will experience a group that blends proximity with capability, heritage with innovation, As the integration progresses, these benefits will become increasingly visible. Together with Mediobanca, we have the earning power, capital strength, and the balance sheet quality to invest in talent retention development with dedicated programs being designed and funded. Client service excellence, leveraging combined capabilities as a broader product and service platform. growth initiatives, systematic pursuing customer coverage opportunities, technology, investing to support all our businesses, sustained high shareholders returns, supported by strong earnings and capital generation. Turning now to the full year results, which underscore our ability to create sustainable value and deliver strong shareholders returns. Return. Full year 2025 net profit of the new combined group amounted to €3 billion before TPA's net income impact equal to around €300 million. Full year 2025, Montepaschi spent the loan net profit at €2,750,000, up by 17.7%. higher than last year, excluding the positive net tax in both .

Ladies and gentlemen please hold the line. The conference will resume shortly. Thank you. Mr. Lovaglio, you can go ahead.

Okay, thank you. I'm just recalling the full year 2025 net profit of the new combined group at 3 billion euro before PPI's net economic impact equal to 300 million. Full year 2025, Montepaschi's standalone net profit at 2 billion, 750 million, up by 17.7 year-on-year, excluding the positive net tax in both periods. Results were driven by solid operating performance with resilient revenues sustained by growing fees and effective management of both operating costs and cost of risk. The profit in the last quarter reached Euro 1,384 million, higher by 18.5% compared with the fourth quarter of 2024, excluding the positive net tax. Focusing on our standalone results, our strong performance is reflected in the net operating profit, which amounted to €1,860,000,000 in the 12 months, growing by 6.4% year-on-year, with resilient revenue sustained by strong plus 8.2% increase in fee income, cost well under control, improved cost of risk. Significant contribution to the results came from the fourth quarter net operating profit, which reached 1,472 million. It was higher by 15.3% plus 4.2 quarter on the quarter. Commercial performance remained very strong. Savings, inflows, mortgages, and consumer finance all confirm the resilience and the power of our franchise. Regarding asset quality, cost of risk has been reduced to 40 bps from 53 bps in 2024. Gross NP ratio at 3.5, lower by 1 percentage point compared to last year. Net NP ratio at 1.8. NP coverage reached 49.3% with an increase of 80 basis points year-on-year. Solid capital position at group level with quarter one ratio at 16.2%, including the impact on Mediobanca transaction, net of dividend to be proposed to the coming annual general meeting. The dividend ratio is equal to 0.86 euro per share for a total amount above 2.6 billion for a dividend yield of 10% at the top of the banking system. And now I would like to give a short update on the combination process with Mediobanca. The combination creates a new, strong, powerful player in the banking sector. thanks to the complementarity of the two platforms, leveraging the strength of both Montepaschi and Mediobanca. The target group structure is confirmed, fully aligned with the industrial rationale of the offer, aiming at maximize the value creation and achieve maximum integration in line with the regulatory requirements related to ECB authorization. with legal entity Mediobanca focused on corporate investment banking and private banking high level. The combination program is progressing at full speed with full involvement in the alignment of both teams. Bottom-up analysis confirmed that the outside-in estimate of 700 million synergies are there And I allow myself to say also with a potential upside. As anticipated, we will detail the corporate organization business plan and update the targets with our capital market day on February 27. We now move to the standalone results section for comparability. These P&L and balance sheet figures do not include Mediobanca. Now, just an explanation from the standalone to the combined group of full year 25 net profit. We are describing the main components. The waterfall explains the set components for the full year 25 group profit reported at the level of Euro 2.7 billion. Montepaschi standalone per tax profit is 1.7 billion, well above guidance. For quarter Mediobanca per tax profit at Euro 376 million, with Mediobanca P&L consolidation, we completed the full write-up of balance sheet DTAs with the net positive contribution of taxes amounted to Euro 461 million in the full year. With these three elements, we have reached a Euro 3 billion profit of the group. The slide also highlights PPA's economic impact, including an ECL booking on Mediobank as performing loans as customary under IFRS. Including these net effects, we have reported group net profit of €2,716,000,000. Now, let's move on to the usually discussed details of Montepaschi's standalone results. As I have already mentioned, full year 2025 net profit on Monte Pasquist and Delon reached Euro 2 billion 750 million, up by 17.7% year-on-year net of positive tax effects in both periods. The results were driven by a solid operating performance thanks to resilient revenues sustained by strong growth in fees, coupled with effective management of both operating costs and cost of risk. Fourth quarter contribution of Euro 1,384,000,000, including positive net tax from DTA right up, following tax consolidation with Mediobank. Net of debt tax effect for Q25 profit is up by 10.5%, versus for quarter 24, with quarterly dynamics affected by non-operating costs related to the transaction. Now, moving on the next slide, the net operating profit confirms the strength of our underlining engine. Full year 2025 amounted to $1,860,000,000, up by 6.4% year-on-year. The net operating profit in the fourth quarter amounted to €172 million, showing an increase of 15.3% compared to last year and 4.2% dynamics quarter-on-quarter, driven by strong fee income and solid base this quarter for a new strategic plan. Now let's move on to gross open profit. We reached €546 million in this quarter, up by 5.2% year-on-year and 2.8% quarter-on-quarter. Revenues increased by 2.4%. Despite the impact of the decreasing interest rate environment, thanks again to strong fees, while costs remain well under control. Full-year gross operating profit was $2,189,000,000, up by 1%, with revenues supported by fees and net interest income stabilization. Operating costs are up only by 0.8%, despite labor contract renewal. Full-year cost income remains stable at 46%. Commercial momentum remains a clear highlight and lays the foundation for the new business plan. Total commercial savings are $178 billion, up by 6.5% year-on-year. World management gross inflow are $17 billion, up by 17%. New retail mortgage are $6 billion, up by 81%. And the new consumer finance are at the level of $1.3 billion, up by 14%. Let's see now in net interest income evolution. In the fourth quarter, 25, net interest income is $544 million, flat quarter-on-quarter, signal of stabilization according to the guideline we gave in the last quarter. For year 25, net interest income was at the level of 2,182,000,000, down by 7.4% year-on-year, in line with expectations. Now, looking at the volumes, let's start with loans. Net customer loans to retail and small business reached practically €66 billion, increasing by €4 billion or plus 6.2% year-on-year. Growth is driven by strong commercial activity in key strategic segments, with important contributions also in Q4. Total commercial savings reached $178 billion, up by more than $10 billion since December 2024. The Q4-25 contribution was around $4 billion, again driven by all components. Quickly now about GOVIS. The banking book stands at $9.1 billion. Credit spread sensitivity increased. but the fair value through CI portfolio remains very low. The fair value through P&L decreased slightly quarter-on-quarter, reflecting market-making dynamics. Now let's move on to fees and commission income. Fees continue to be a key driver of our performance. For quarter, 25 fees are $401 million. up by 7.4% per year driven by wealth management fees, up about 14.8%. We also increased by 4.9 quarter-on-quarter with both wealth management and commercial banking contributing by 7 and 2% respectively. Full-year fees are at the level of $1,586,000,000, up by 8.2% year-on-year. Wealth management and advisory fees are up by 13.3%, and commercial banking fees are up by 3.5%. Again, this is a confirmation of how our network is powerful. Now let's move on to the operating costs, starting with the quarterly evolution. Q4-25 operating costs are at the level of $474 million down by 0.6 year-on-year. Non-HR costs fell by 7.8% year-on-year, more than offsetting HR cost pressure from contract renewal and variable remuneration. Quarterly dynamics reflect typical four-quarter seasonality. Full-year operating costs are at the level of $1,885,000,000, up only by 0.8% year-on-year. Again, HR costs are down by 5.7%, offsetting HR costs up by 4.3%. Now let's move on to asset quality. Asset quality continues to improve. Gross NP stock down to 2.9 billion. Gross NP ratio improved to 3.5 from 4.5 in December 24. Net NP ratio is at 1.8 from 2.4. Cost of risk is 56, 57 bps in Q4 and 40 bps for the full year 25, down from 53 bps in full year 24. MP coverage is 49.3, improving by 80 bps year-on-year. Now, founding liquidity again is showing the strength of our balance sheet. We have a very solid liquidity position, confirmed also in this quarter with the encumbered counterbalancing capacity above 30 billion. LCR at 168 and NSFR at the level of 133. Now, a quick and simple representation of the purchase price allocation. So, we are presenting here the main components. Provisional effects of PPA amount to approximately Euro 3.6 billion, of which 2.5 billion euro have already been included in the third quarter 2025 result. Goodwill is estimated at the level of 3 billion euro. The purchase price allocation process will be continued and it is expected to be finalized by the end of September 2026. Now capital. We have a very strong capital position, and this is confirmed also in this quarter, with a common equity tier one ratio fully loaded at the level of 16.2%, including a profit net of dividend proposed already reflecting the preliminary impact of the major bank transaction. The capital ratios are therefore strong with the large capital buffer compared to regulatory requirements that give us strategic flexibility going forward. The slide shows the main drivers of the quarterly dynamic and the conservative treatment of partial preliminary PPA effects. Now, let me spend a few words on MediBanca for quarter results. The fourth quarter, again, is a confirmation of the potential deriving from the combination. Net profit, Medibank was at the level of $301 million before one-offs, and $221 million reported for fair value adjustment and costs related to the OPS. Sound asset-driven business with total financial assets at the level of $115 billion, stable quarter-on-quarter. Revenues are up by 6% quarter-on-quarter, with fees rebounding plus 6% driven by world management. Cost income at the level of 47, including retention action costs and cost of risk, is 55 bps, quarter one at the level of 16.4. The dividend per share of 0.63 is proposed to be paid in April. Now, let's turn to the combined platform and the industrial rationale. This transaction is a very strong industrial rationale. We're confined to platforms that are not overlapping but genuinely complementary. Montepaschi brings a unique retail and commercial banking franchise. Mediobanca contributes best-in-class capabilities in consumer finance, wealth, investment banking, and asset management. Together, we create a structurally profitable and sustainable business model. The operating model is simple. and industry-driven. We leverage scale where it matters while preserving specialization and excellence in each business line. In retail and consumer finance, the logic is very clear. By combining Motepaschi's nationwide reach with Compass's leadership in consumer finance, We build a market-leading platform with superior growth and returns. Wealth management and private banking are a core value driver. Greater scale and stronger digital capabilities allow us to move up the value chain, attract high-network clients, and increase share of wallets. Asset-gathering platforms and private banking franchises work together in a fully integrated model. Corporate and investment banking is significantly strengthened. We offer clients a solid balance sheet and unique advisory expertise in Italy and also internationally through Messier Marie and Arma Partners. Insurance partnerships and asset management add stability and diversification. They reduce reliance on traditional banking revenues and improve the overall risk-return profile. The result is a well-balanced, resilient group, diversified across retail, corporate, wealth, and insurance, and well-positioned to deliver sustainable value through the cycle. On pro forma basis, the group is a world balance revenue mix. Retailer commercial banking around 30%, consumer finance 80%, asset gathering and management 21%, 9% SIP, and 14% insurance. This is supported by a radius based around 8 billion. Now about the combination program. We are moving at full speed to the combination. Our objective is clear. We want to reach the target operating model by the end of this year, 2026. We have almost completed the design of a comprehensive and disciplined integration plan. It covers all key business functions with dedicated teams, strong leadership, and clear accountability. The focus is on efficient execution while ensuring business continuity and minimal disruption. Phase one is now completed. We have finalized the agnostic and the design of the target business model and operating model. We are now entering in phase two. This phase is fully dedicated to complete the definition of the business target model and the corporate structure. The work done over the last few months give us some confidence in the delivery of 700 million of envisaged synergies. These synergies are concrete and actionable. We have identified more than 50 granular initiatives across business, cost, and funding. The integration plan is almost finalized, fully aligned with the ECB requirement, with clear milestones already set for the coming weeks. Execution so far has been solid. Things are working constructively. And this is the key message I want to underline. Synergies are not a promise. They are a program with initiative, milestone, and accountabilities already in motion. Let me conclude with what really matters. The fundamentals of this group are already very strong. In full year 25, Montepaschi, on a standalone basis, delivered a pre-tax profit of $1.7 billion, well above guidance. This is the result of outstanding commercial performance, with strong volume growth and high single-digit fee growth. This momentum does not stop here. We expect the strength to continue into 2026, with an acceleration of commercial dynamics and solid growth in fees and commissions. On a pro forma basis, this trend will support a year-on-year increase in group profit before tax. At the same time, we have confirmed the target group structure, a structure fully aligned with the industrial rationale of the offer, designed to maximize integration, and to maximize synergies. Medibank as legal entity will be focused on corporate and investment banking and high-end private banking, reinforcing clarity, specialization, and value creation. But this is not just about numbers. This is about a new way of doing banking. a group where Mediobanca's client relationships strengthened Montepaschi's lending engine, where excellence is not the sum of the parts but the multiplier, where clients experience the full breadth of our capabilities with simplicity, confidence, and trust, where two strong historic brands and franchises stand together as one Brother, more powerful and more ambitious than ever. This is only the beginning of what Montepasqui Group will become. A group we are shaping for the benefit of all our stakeholders. A group powered by almost 3 billion in earnings. A robust balance sheet with 16.2 capital strengths and by an integration advancing with discipline, speed, and purpose guided by a clear organization blueprint. All of this will be fully unveiled on February 27 when we will present the business plan for Montepaschi-Negobanca combination. To our employees, our clients, And our shareholders, gracias. Your commitment, your confidence, and your belief in this journey are the forces that make this transformation real. Our fundamentals are strong. Our strategy is client-focused. Our commitment and our ambition are very high. Together, we are not simply combining two banks. We are shaping a leading competitive force for Italy, one that creates value, strengthens talent, and stands on solid foundation for our employees, for our clients, and for the future. Thank you, and we are ready to take your questions.

Thank you. This is the Coruscant Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from the conference call in English from Antonio Reale, Bank of America. Please go ahead. Mr. Reale, we cannot hear you. Can you get closer to the receiver, please? Mr. Reale, we cannot hear you. Maybe your line is on mute. Please check your microphone, please. The next question is from Giovanni Razzoli, Deutsche Bank. Please go ahead.

Good morning to everybody. Thank you for taking my questions. The first one is on the CT1 ratio. If I'm not mistaken, the 16.2% includes only 40 million euros of restructuring costs out of a total of 600 million euros. And so my question is, can you still confirm about a 16% CT1 ratio in the coming years when all the restructuring costs will be booked? And Another question on the restructuring cost is relating to the phasing of those costs in the coming years. How does this phasing of restructuring costs align with the proposal of dividend per share of 0.86 cents, which I presume represents a starting point for the plan? So, in other words, how can you – expect to confirm if any 0.86 cents of dividend in the coming years when you are likely to record the restructuring cost. I understand that this is a kind of anticipation to the business plan, but if you can help us understanding how this is square with the overall picture of this CT1 and dividend. Thank you.

Good morning. Ciao. On your questions, actually, the integration cost, based on the latest estimates, are expected to be, for the next years, around still 500 million euros gross. So the net amount is around 350 million euros. So if you even factor them in, the capital ratio would still be around 16%. Then you have to take into consideration that the booking of the integration cost is strictly related to the announcement of the plan projections. So on the plan targets and initiatives, so this is why will happen for the planning bulk in 2026 for your last question on capital projections stated what i said on the impact of integration cost per se i would let's say postpone the answer to when we present the business plan which is, I would say, let me anticipate that this statement is valid for most of the forward-looking questions that we will tackle when we present the business plan on the 27th of February.

Thank you.

The next question is from Luis Manuel Grillo Pratas, Autonomous. Please go ahead.

Hey, good morning. Thank you very much for taking my questions. You comment on the presentation that you want a full integration of the two banks. I wanted to ask you what is the ideal corporate structure for you? Is it a scenario where you delist Mediabanker, owning 100%, but then you spin off a specialized entity for CIB and private banking? I'm asking this because for weeks there has been a lot of speculation on the press about alternative routes, such as refloating media bunker, keeping it listed. So any caller here would be very much appreciated. And then I wanted to ask you about the NII into four standalone. It came flat, whereas peers showed already some growth into 425. If I look at the individual drivers, loan volumes came 1% higher QNQ. The customer spread also expanded a few basis points to 2.8%. So I wanted to understand the Flatish Q4 figure, if there were, like, any one-offs there, and whether you could provide any guidance for NII in 2026 standalone, please. Thank you.

Okay, thank you. Thank you for the question. I think Andrea make a statement that clearly most of the information regarding key elements P&L and projection will be provided in 15 days with the presentation of the business plan. Having said that, I can just really confirm that we are focused regarding the structure and reorganization. We are focused on value creation. And in order to do it, we need to maximize the level of industrial synergies to be achieved. That's why we are confirming that the organization, the group, should respond to this objective. The guideline will be finalized together with Mediobanca in the coming weeks with the aim of reaching the final approval of the integration industrial plan by February 26. So I believe as no decision will be taken at the board yet, I really ask to be passionate and to wait for the presentation of the business plan in the next 15 days. About an 18 for thinking, I will ask Andrea.

Yeah, about net interest income, as mentioned also in our previous calls, starting from Q4 as actually it happened, we expected stabilization and then a pickup, a slight pickup in the next few quarters in 2026. In the fourth quarter, 25, yes, we have some benefits predicted. on wholesale cost of funding and also on commercial NII, there are actually, yes, some accounting, one of the impacts that led to the stable NII. But let's say the trend is expected to be a stable slash positive one in 26.

Thank you. Can I just do a very quick follow-up? Thank you very much for the answers so far. So in the scenario where you delist Mediobanca via a merger buying corporation, I would like to ask how the buyout price, the exchange ratio is defined. Do you need to pay the same exchange ratio that you pay during the offer, so 2.533, or can it be a different price, for instance, considering where Mediobanca trades compared to the alpha? Thank you.

Whatever I'm saying will be price sensitive, so I think it's better if we postpone at the right timing. Sorry for that.

Thank you.

The next question is from Noemi Peruk, Morgan Stanley. Please go ahead.

Good morning, and thank you for taking my questions. The first one is on tax rate. Which tax rate would you expect for 2026 for the group? And then if you could please update us on the trends of private bankers year to date, whether the exits have stopped or not. My third question is on the payment of an interim dividend in 2026. If you can share your thoughts on this. Thank you.

Okay, take the answer, Ryan. Okay, tax rate will be around 30%, 29, 30%, I believe, clearly, in line with what we planned originally in our projection for the OPS. Then, I think regarding Mediobanca, Right, bankers, right. I believe that some necessary action have already been taken to retain talented bankers that I believe are crucial for the business organization and grow. I know the new effort will be put in place in order to be even more effective. Honestly, we believe that the situation is something that we can consider absolutely under control. And I'm sure that the top measure MediBank will ensure prompt action in order even to invert this kind of trend. So as far as dividend, I believe as Andrea was mentioning, it's better if we disclose all the necessary information in the next presentation of the business plan two weeks from now.

Thanks.

The next question is from Hugo Cruz, KBW. Please go ahead.

Hello, thank you for the time. I have a few questions. So the PPA, you know, the full process will be completed by September. Should we expect any further impact on capital from finalizing this process? Perhaps it's something you can answer without kind of going into the business plan. And then ideally, if you could give guidance on PPA charge for future years, the annual recurrent charge. So that's one question. Second question, MREL, can you confirm if the plan is still to keep the combined entity as a single point of entry? And the third question on ECB funding is still 7% of liabilities. Can you remind us of the cost of this funding and if you can replace it with cheaper funding? Thank you.

So, thank you for your questions. So, on the first question, what actually remains to be done with regard to ECB The PPA is mainly related to the evaluation of intangibles like brands, customer relationships, et cetera. So we would not expect any material impacts on capital minimum. The relevant things to be assessed were done end of this year. As regards to the PPA charge going forward, Then it depends on the amortization schedule of the different essential abilities, but let's say on average you can assume around 100 million Euro per year for an average of 10 years. Then it will depend on the actual amortization of the different items. As regards the question on MREL, yes. We definitely still plan, stated at the formal decision, it's not on us, it's on the SRB, but anyway, that the group will be managed via a single point of entry approach, and these is also relevant for funding synergy. So definitely this is still an objective. Finally, the ECB funding. Yeah, I mean, as we further accelerate on our commercial deposits, yes, we will be able to replace the remaining ECB funding potentially with cheaper cost of funding.

Thank you very much.

The next question is from Andrea Lisi, Equita. Please go ahead.

Hi, thank you for taking my questions. The first one is on fees, particularly on wealth management fees that made really well in the last quarter, just to understand and to have a comparison of the contribution of performance fees in the fourth quarter, 25, and in the fourth quarter, 24. Then I want to ask you if the target of 700 million synergies could be realized also without a delisting of Mediobanca and in case of full integration of Mediobanca with MONTE, Just from a regulatory standpoint and timeframe, can you identify or clarify which are, in theory, the steps and the timeframe to arrive to the full integration? Thank you.

Hi. Maybe let me, before letting the CEO comment on the commercial performance on well-managed entities, Maybe just make a quick preamble that I think is relevant for the interpretation of our performance that was particularly good on fees. I would refer you to slide 39, so it is an annex of our presentation. where you see the recast of Mediobanca P&L on the basis of Montepaschi reclassified P&L. This is relevant because if you compare the fee number, you can see that the number under our classification is lower than the one you will find in the Mediobanca presentation because there are some reclassification to other items like cost, for example. So this is relevant for your future projections and also to compare with your previous targets. So this is the first point. Second point you have to take into consideration is instead when you consolidate, then part of the banking fees of Montepaschi, so which are the upfront fees we get on Compass funds, Contradistributional corpus products, which is, say, around 10 million euros, the score is slightly less. These are eluded because these are accrued in... in the future years. So you have to take into consideration these two items to better interpret the fee performance that is much better compared to whether you simply add the fees of the presentation of the passive-standalone and Mediobanker standalone as it was mentioned. shown yesterday. So you have to refer to our slide 39 to interpret the future. So sorry for the long preamble, but I think it's relevant for your future projections, but also to interpret our quarterly results. And then I'll let the CEO comment on the commercial performance.

Okay, let's start from... the key information that we are providing with these results. So, as we said, one-third of total revenues are coming from us. That's why it's quite important for us to exploit the potential of full synergies that can come from the combination of Mediobanca plus Montepaschi. Having said that clearly, on the side of fire banking high level, this kind of activity will be clearly concentrated and focused in Mediobanca legal entity with the strong brand that they have, the strong professional people there, and the long-lasting experience and the appreciation that they have on the market. If I remember well, recently they got also a special reward, Euromoney as the best private banker activity in Italy, right? So this is, again, a plus that we believe can further be developed by sharing their know-how also to the bulk of customer, of private banking customer we have in Montepaschi. And besides that, it's clearly that, as we were seeing in the documents of our public offer, it's clear that you will extract the maximum level of synergies by optimizing the full integration. But anyway, also without the full integration, we can get synergies. It's clear that the goal is to generate the maximum level of synergies and value for our stakeholders. That's why we are in the process to finalize the best structure that can fit with this goal. And we provide to the market the complete set of information during the business plan presentation.

Thank you.

The next question is from Antonio Reale, Bank of America. Please go ahead.

I'm going to try again. Sorry about earlier. It's Antonio from Bank of America. Two questions from my side. Some of them have been addressed already, but I'm going to ask you a market question. Ex-dividend, Montepaschi is trading now on 8 euros on my screen, and I think you said not long ago on previous occasions that you think the shares are undervalued. Now, I think you still believe that, and that probably makes two of us. My question is how can you convince the market that it's wrong on Montepaschi? What do you think the market is getting wrong? That's my first question. My second one is can you help us frame the moving parts from here on sort of what's affecting your capital? going forward, both positively and negatively. I know you've talked about PPAs, but sort of DTAs, restructuring charge, trying to get a sense of the magnitude of your excess capital here. You might have already answered this, but sort of is staying above 16% a target also in the outer years? Thank you.

I think what is important and normally is what we're trying to do is to convince the market with results. We are keeping the liver sustainable, continuously growing results in what is the part that is showing the sustainability of these results that are fees and commission. We are one of the most powerful network in Italy. And this proven by this capability to keep in growing high quality streams of revenues that are presented by what management product and fees related to this kind of business. We are a bank that is providing the group who will be capable to provide one of the highest dividend yield. We have a strong position of capital. Thanks also, as we were mentioning, the write-up of DTAs. We can count on additional support to the quarter one of around 500 million per year for the next six years. So we have capital. We can give evidence of capability to provide high remuneration while keeping a strong position. And keeping a strong position of capital will give us the opportunity to exploit and capture all the opportunity that will come to the market to further enlarge our business scope and to further have possibility to reward our shareholders. So I'm sure that the market will recognize the work that we are doing, the quality of our results, and we will see the precision of our evaluation that I agree with you is absolutely underestimated today.

Thank you. Antonio, on the capital moving parts, let's say in qualitative terms, you have the business evolution, so the net income relevant to the growth or anyway movements that are relevant to produce that P&L. We mentioned the one-off integration costs that are expected to be around 500 million euros gross on tax. We mentioned the PPA charge for the next 10 years. The COO has just mentioned the 500 million euros for the next 10 years on average positive contribution. from the DTA utilization, and then you will have the dividend roughly. So these are the moving parts. Then, of course, it depends on the relevant projections, on which we will comment on the 27th of February.

The next question is from Hugo Cruz, KBW. Please go ahead.

Hi, sorry, just wanted to follow up, because you mentioned the integration charges, but what split should we assume between Mediobanca standalone and Montepaschi standalone for those charges? Thank you.

Actually, this is a second-level details question. Let us answer on the 27th of February. I should go too much into detail now to answer this question, so that would be ahead of our business presentation. Sorry.

No worries. Thank you.

The next question is a follow-up from Luis Manuel Grillo Pratas, Autonomous. Please go ahead.

Just a quick follow-up. You mentioned a retention policy at Mediabank. Can you give us any color on the expected cost of this policy and like any yearly evidence that is working, you know, essentially stopping the exit of private bankers? Thank you.

As I mentioned, Mediabank was already in put in place some actions of retention. I believe that at the current stage there are not a significant level of expenses. That's why we count on a broader action in order to retain the talent people that currently is in MediBanca. That's why I think A component of this cost will be considered among the split that we are going to provide in the business plan. So it's better not to anticipate out of the context that we are going to explain in connection also with the expectation of growing and further potential private banker to join the as well.

Thank you.

Mr. Lovaglio, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

So, thank you very much. I think we fixed this important data that is this that we're going to have on 26, so it would be a pleasure to answer four questions. I apologize if today we postpone some answer, but I'm sure you will also appreciate what we are going to disclose, because this project that we are going to represent through business plan to the plan of integration is one of the most attractive projects for the banking sector. and opportunity to reward those stakeholders, and you will see that what we are going to present will be fully answering and responding to this high level of targets we fixed to ourselves. Thank you very much. I'll see you in two weeks from now.

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