Banco Bpm Societa Ord

Good evening, this is the Coruscall Conference Operator. Welcome and thank you for joining the Banco BPM Group first quarter 2026 results presentation. As a reminder, all participants are in a 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. Arne Riscassi, I are manager of Banco Bpm. Please go ahead, sir.

Good afternoon. Thanks for joining the conference call. Q1 results will be presented by our CEO, Giuseppe Castagna, and our joint general manager and CFO, Eduardo Ginevra. Let me remind, as usual, to limit, please, yourself to two questions maximum. Now let me hand over to Mr. Castagna. Thank you.

Thank you, Arne. Thank you, everybody, all the people which joined our conference call. We are happy to present a very strong set of numbers for Q1 26, a solid start, I would say a compelling business model in action because we are following exactly the path that we presented last year with our updated business plan in February 25. Profitability grew to 480 million of net income, Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord from the development of the product factories. As you can see, in 2025, we had the contribution, average contribution per quarter of 377 million. Now, in the first quarter, it's 406 million. And the target, the quarterly target for this year was 400 million. So we are already above the target. Let's only have in mind that when we started the plan, the contribution from product factories was slightly above 200 million in 2023, of course always as a quarterly average, and 242 million in 2024. So a significant enhancement already in line with the trajectory of 2027 in which we envisage to reach 430 million per quarter. but also since ANIM injection of course there was a significant improvement of the organic performance If we go to the pre-tax results of Q1, we have a bettering of almost 90 million, coming off of these from higher non-NII revenues, particularly commission and contribution from product factory, and the remaining 50% coming from lower operating cost, almost 23 million, and lower provision for over 30 million. So a significant progress vis-à-vis our target. On page six is a quick reminder of the most important voices in terms of revenues, cost and cost of risk. Revenues grew more than 100 million, always on the quarterly average of 2024. Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord We also confirm the enhanced efficiency in cost management in which we were able to reduce cost income from 47% to 44% in two years and from 46% comparing to last year. We also registered a sharp decline in total provision going down from 137 million of quarterly average in 24 to 78 million for Q1 26 and last year was 100 million the quarterly average for 25. The cost of risk has been reduced from 46 basis points to 32 basis points. And talking about effective credit management, we see here the evolution that we had, of course, in particular starting the first year of our merger, but following this path, we have been able to further reduce Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord And if we go to net MP ratio, we are down from 1.5% to 1.1% in the last 12 months. If we see the net MP ratio without excluding the MPAE guaranteed from the state, we are down to 0.6%. and if we consider only the net bed loan excluding the state guarantee, we are down to 0.1%. This is the demonstration that we have been changing the quality of our portfolio since the pandemic. We have here showed that since 2021 the average default rate year by year was below 1% with the record 0.68% in the first quarter of 2026. We really believe that this is a demonstration that our portfolio is a very solid quality. also the stage 2 loans were down in one year from almost 9% to 7.5% On page 8, I will just say that we have been able, we're able to maintain to 13.6 the common equity tier one. But again, we will go more into detail at the end of the presentation on capital. And vis-a-vis the SREP requirement, we have an MDA buffer above 400 basis points. Let me remind that, as I was mentioning before, we will see that if we consider the figure at 30 April 26, considering the recovering of the fair value of other comprehensive income, we are almost at 14% of common equity at year one. Some key highlights about the profit and loss. We have a comparison with year-on-year and Q-on-Q. Good results in terms of net interest income. Even, of course, with a slight reduction Q-on-Q, the effect is completely offset by the two days less effect of Q1-26 vis-à-vis Q4-25, which account for a lower $17 million. Meanwhile, of course, the comparison with Q1-25 is impacted by Euribor, which was 50 basis points higher vis-à-vis Q1-26. Good increase instead, plus 3% Q&Q in net fees and commission and the solid contribution coming also from income from associates as well as income from insurance. Core revenues were in line with last Q25 and slightly below year on year. Net financial result was better than last Q25 25 million positive versus 49 negative in Q425 thanks both to the effect of better results from NFR and reduce the impact of cost of certificates. Thanks to that, we have a total revenues which increase almost 4% Q and Q with a reduction of 2% year on year. operating costs down 3.7% on a quarterly base and 2% on a yearly basis, mainly due to reduction of cost of personnel, but with a good tarnish also of administrative cost. Pre-provision income is 10% above Q and Q and 2% negative year on year. after total provision, which were down 50% on last Q25 and almost 3% on Q125, we have again profit from pre-tax profit, which is 25% better Q and Q. Then we have the increase of the impact coming from the new taxation which made the contribution paid for taxes as much higher as 278 million compared with 185 million of Q4 and 262 million of Q1-25 leading to a net profit above 500 million 15% higher than December 25 and 6% lower than Q1 2020. Let me remind, of course, that Q125 is a proforma which includes the contribution of ANIMA, which instead was not present in Q125 because, as you know, started to be consolidated in Q225. So it's just a proforma to compare the same perimeter. final result, net result, as I mentioned, is 480 million, which is 15% above last quarter. We have also, on the right side of the page, showed the positive progression that we registered since the acquisition of Anima, comparing the last four quarters, and as you can see, both in total revenues cost income, non-loss provision, and pre-tax profit, we are always registering a bettering of the result with some very positive outcome. Going very quickly on some of the items, NII again was down 2.1%. vis-à-vis Q4-25, but the 70 million effect would have offset completely this reduction. Meanwhile, we have a reduction of 30 million, but with a new highboard, which was a 50 basis point above the current highboard. and I had full funding costs were basically at the same level in all the three quarters we are examining. On the right side, you see the evolution of the drivers of net interest income leading to 751 million. mainly due to the day effect. Meanwhile, you can see that we had good results from the commercial spread almost in line with the Q3 and Q4 2025 at almost 2.90% of asset spread. Basically, half of them coming from asset spread Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord 150 million with the replicating portfolio, which is slightly above our guidance of 25 billion, but is due only to the anticipation of some manoeuvre, which is going to expire during the second part of the year. Meanwhile, the index, our current account, remains stable at 37%. A good news is coming from lending activity, although, as you know, the macroeconomic does not bring to support the decision of investing for our entrepreneurs. We were able to register 1 billion of increase in stock of lending, almost completely coming from Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord the part of non-financial corporates related to small business. As you see, the more smaller the counterpart, the more increase the securing packaging that we take for granting loans. If you go to the state guarantee secured loans, we see that we go from a total of 19% growing to 26% for non-financial corporates, which for the small business increase up to 41%. If we couple this 41% with the collateralized loans, we go up to 63% of secured loans. for small companies. Let's have a look on page 13 on the total net fees and income from insurance. Let me say that we managed to reclassify for all the quarter we showed in this page and all the number that you will see in our enclosed slides. that the cost related to synthetic securitization are now reclassified to other operating item and are not anymore into the net fees and commission. But this is, of course, pro forma for all the quarter we examination. And talking of that, you can see how the strong contribution from net fees and insurance make the quarter contribution passing from 630 million to 750 million with also an increase from 687 million to 710 million talking only of contribution from fees. The vast majority of this contribution is coming from investment product fees which grew 8% Q&Q split above contribution coming from anime from upfront fees and from running fees. As usual, the Q1 bring a strong contribution also from upfront fees, but is a sort of seasonality effect. The investment product placement was as much stronger as the Q125. Let me remember the Q125 was the strongest quarter in terms of contribution from investment product fees due to the special effort that our network was doing during the first months of the starting of the hostile offer from Unicredit. So we managed to confirm that the capability of the network also without any kind of menaces is very trained to perform very good results. apart from the 6.7 billion of investment product place and we managed also to sell to our clients 1 billion in March of BTP issue. In terms of other fees contribution, we have a reduction of 2% Q&Q mainly driven by two items. The first one is the termination of the eco bonus scheme, the fiscal credit discount that the banks managed to perform both in 24 and 25 and now is not anymore there, even though the fiscal effect is still giving advantage to the bank, but not in terms of more commission. The real reduction was coming, although from the lending activity, in particular from the specialized lending activity, the structure of finance activity, which in the first quarter of 2025 was at a record level and now is at a more consistent level of 75 million. I would say that this is contributing to the specialized activities for 75 million. I would say that this would be more or less the contribution we expect also in the rest of the year, although we have experienced this growth in volume that we showed in the page before, demonstrating that there could be, depending on the geopolitical situation, also strong recovery if the situation is going to normalize Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord volumes of Banco BPM itself and in terms of ANIMA contribution due especially to the market effect, of course, coming from the reduction of the value in the first Q of 2026. As far as for ANIMA is concerned, there is also reduction coming from the termination of an agreement with Etica which was known since January 25 and is producing some effect in reduction of financial asset managed by Anima. Not to extend in that the contribution from Anima is bettering as you can see on the bottom right side of the slide ANIMA contributed to the BPM Group's PNL for 143 million of total revenues level plus 4.7% vis-à-vis Q1 2025 pro forma of course and 56 million in terms of net income level 23% higher than Q1 pro forma 25%. On page 15 we have the good results coming from the tenure of and rigorous cost discipline applied by the bank with a reduction of 3.7% in total operating cost, which is 4.7% from staff cost due especially to the savings coming from the solidarity fund exit, which were quite massive in Q4-25, and also a reduction of 1.8% Q&Q, related to ASA and DNA. Finally, on page 16, cost of risk is down to 32 basis points. As I mentioned, we managed to reduce the stock gross from 2.75 billion to 2.180 million, 21% year on year, with the ratio which has been reduced to 2.13 as a gross ratio and 1.13 as a net ratio. Remember that the net bed loan ratio is down to 0.34%. I don't repeat the fact if we exclude the loans guaranteed by the state, but as you remember, we are down as far as net bed loans to 0.1%. On the right side, some good number about cost of risk down from 40 basis points to 32%. Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord as total coverage and 240 basis points if we exclude MPE with state guarantee. Let me remind that bad loans excluding MPEs with state guarantee are covered up to 80%. So really without any further potential risk coming from this asset. I leave the word to Eduardo Ginevra for page 17. Thank you Giuseppe.

So a quick look at the financial components of this quarter. So the first Part that is illustrated in this slide is related to the evolution of our negative reserves on debt securities which on a net basis has been worsened by 30 million until from December to March due to the volatility that happened during the third month of the quarter. Now this amount is again almost aligned with the level as of year end. End of April, it was 300 million, 306 million. so very similar to 299 that we experienced three months ago. BPV went down, so the level of our absolute exposure to interest rates risk went down in the fair value of the comprehensive income portfolio from 2.4 to 2.6 million. This is only to a very limited extent represented by Italian government bonds, less than 700 million. Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord On the right part of this slide, net financial result improved significantly versus Q1 2025 from 15 to 25 million. This is due to the structural improvement of cost of certificates from 50 million in the first quarter last year to 27 million, mostly driven by the declining Euribor scenario. Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord then all of these elements translated into capital with the dynamic that is shown on page 18 so after accounting for the headwinds related to Basel III the starting point is 13.49 and after accounting for these nine basis points of headwinds 88 positive basis points came from the performance in the P&L of this quarter 75 basis points is the absorption of capital from dividends and 81 coupons only 19 basis points despite the strong volatility in the market have been absorbed by the reduction in reserves for value of the comprehensive income which as we said have been then reversed in April. DTAs contributed positively for 18 BPs and the rest, the various other elements, are negative for a modest amount of 3 BPs. 1759, which is the level of common equity at one ratio as at the end of March, would become almost 14%, 13.98% if you want to note the number, the exact number, if you consider fair value of the comprehensive income reserves on debt and equity holdings at the record date of April 2026, so at a pro forma level. MDA buffer is above 100 basis points and MRL buffers are at 469 basis points or 4.69 percentage points if you use as reference the total requirement, 437 is with reference to the subordination requirement. The final point to mention for this slide is that we still continue to have an amount of potential capital that is to be created during the plan horizon thanks to the contribution of reserves on fair value and comprehensive income and DTAs. According to our forecast, this translation of potential into actual capital would account during the planned horizon for 120 basis points, whilst overall, taking into account also the rest of capital to be created even out of the planned horizon beyond 2027, this amount is higher than 200 basis points. Now for the final remarks, let me leave the floor to Giuseppe.

Okay, so on page 20, some check about the guidance and the outlook for 2026. As you know, we have out the previous plan that we confirmed in 26 last year, just one year ago in February 25, which was above 1.9 billion for 26. Let me say that Q1 results are already in line. thanks to revenues already in line by line and overperformance in net fees and commission. As far as costs are concerned, we are instead well ahead in our plan trajectory, both in operating costs and in cost of risk. So although there is a higher impact from the tax Edwin, we can say that we have almost recovered all the gap generated by the taxation. As you may remember, we confirmed the guidance for 26 before tax. Now, I think we are in line to say that we are very confident to be able to reach the target for 26 already diseased. Let me say that for sure we confirm that the delivery of 1 euro of dividend per share is confirmed for 26, which at today's level corresponds to 8% of dividend yield. looking ahead to 2027 as you know we have a plan which terminates in 2027 we have a target of 2 billion 150 million also in this case we feel that we have not already reached like in 2026 but in a positive trajectory which give us a lot of confidence in terms of reaching the target for 2027 We just mentioned some of the key numbers here. The increase of non-NII revenues above 50%, which was the target, now is 53%. Still, we are not in full power with all our product factories. the net NP ratio which is down 0.5% vis-à-vis the target 27 and the availability of a buffer of a common equity tier one which is going to improve thanks to managerial action and RWA coupled with 120 points basis point where the other was mentioned in coming from DTA reduction So we are confident to overcome the 7.7 billion of cumulative net profit for the four years of the plan, reaching the promising trajectory leading to 2.150 million for 2027 and leaving us the room to going above the 6 billion of cumulative distribution target which we presented last year in February 2025. All the indicators are very good, both in terms of P&L and of capital strength, which of course can also enable us to overcome the distribution through new measures to decide at the end of this year. Thank you very much for your attention. I leave the floor for your Q&A session.

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 one under touchstone telephone. To remove your staff from the question queue, please press star and two. We kindly ask to use handsets when asking questions. Anyone who has a question may press star and one at this time. The first question is from Giovanni Razzoli, Deutsche Bank.

Good afternoon to everybody 2 questions on my side and the 1st, 1 is on your city 1 ratio of 13.6% which actually reach the 14% in April. You mentioned. So, it's a very, it's a very good level about my expectations. I was wondering whether. with this level of capital if this is confirmed going forward you can consider resuming to your share buyback plan that you have put on hold last year and connected to this I've seen that you know the lending grow was a little bit low one percent year on year on house when the corporate can you give us a guidance for the full year so that we can have also better understanding on how the CT1 ratio can evolve in terms of also risk weighted assets expansion. And the second question relates to the slide number 13, especially in terms of fees. In my view, the fees were pretty good, especially in terms of investment fees. There was a restatement as far as I understand, so you have changed the representation of the fees, removing the cost of the securitization from the fee income line. If you can share with us what was the impact in this quarter. It seems to me that this is a trend representation that is in line with other peers. So if you can also confirm this and regarding the investment fees, I was wondering if you can provide us also an indication on how is April evolving because the trend of the Q1 was very good. Thank you.

Thank you, Giovanni. So, of course, we are very happy to have in April 14%. Of course, this comes from the volatility of the market, but it's going back to the number we had at the end of the year. So we are quite confident that this could be the roadmap toward the end of the year. we are very happy because this was one of the questions that many brokers were asking about our common equity R1 strength I think that coming back to 14% as you may remember after overcome the denying of the Danish compromise bring us to the same level also having had the burden of the non-Danish compromise So very happy about that. Let, of course, terminate the years as we were saying also last year in order to consider what we can do about the excess of capital. On fees, of course, as you were mentioning, this restatement is in line with our main competitor. frankly speaking is not something related to the capability of selling products to our client so we decided it is a better represented into the other cost rather than into fees and commission and I confirm that average on the last five six quarter has been consistent in line with the 20 million thank you

The next question is from Manuela Meroni in Tiso San Paolo.

Good evening. First question on the NII. You say to expect an NII in line with the 2025 exit level. That means a little bit lower than 3.1 billion. I'm wondering if you can share with us the main moving parts in terms of volume, margins, and the contribution of the replicating portfolio. The second question is on consolidation. One of your competitors this morning said that Italy is a fragmented market and needs consolidation. So I'm wondering if you want to share with us what are your thoughts on the consolidation in Italy and the role that BPM can play in it. Thank you.

So, on replicating performance on NII, yes, we guided towards an overall level of NII which is similar to what we had in the last quarter of the year, bearing in mind the potential evolution of the underlying drivers. In particular, concerning volume with respect to Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Potential tailwinds coming from level of rates and in particular from the expectation of Central Bank hiking rates during the current quarter, during the current part of this year. Replicating portfolio, we have... Oops, I was about to fall down. We have a level of replicating portfolio which is at 28 billion, 3 billion above our target level. This is because we took the opportunities of the shape of the yield curve during the first quarter to anticipate some maturities of the replicating portfolio. keeping anyway the target level at the same 25 billion that we used to have since we approved the previous plan. So this means that over the rest of the year, we have maturities in this portfolio that we will not renew. So coming back to the level of 25 billion, other things equal. We may, of course, reconsider this policy, this strategy, depending on the evolution, not only of the absolute level of rates, but also the yield curve.

Okay, about consolidation. Of course, yes, we feel we are in the best place to catch the potential opportunity coming from an eventual consolidation, further consolidation of the market. We had a lot of consolidation last year. Some of them also related to our bank with the acquisition of Animate and the other acquisition of Montepaschi Mediobanca and Bperson. Of course, there could be room for something more. It's not only from one bank to decide exactly what to do. We think we are in a good position to understand where the market is would generate opportunity for us. For sure, we are in a strong position in terms of capability, having already realized a very good transaction years ago. We are now at plenty of our capability in terms of reaching the profitability we promised last year. Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord other product factory to join to our product factory in terms of distributors of our product factory. So it's difficult to say which one will materialize, which one will give the best opportunity for our shareholder. For sure, we are considering and studying all the situation in order to take advantage from potential availability from other counterparties.

The next question is from Delphine Lee, JP Morgan.

Yes, good evening. Thank you so much for taking my questions. My first one is just to go back on fees and commissions. So it looks like, I mean, the trends in Q4 and Q1 were definitely better Q and Q, but the year-on-year comparisons seem to be somewhat a little bit weaker than what we have seen with peers. if you could give us a bit of color, what you expect in the next few quarters in terms of strength on a performer basis, clearly after the year we have the classification. And then my second question is just to go back on on M&A. Previously, you were talking about the M&A options with Kari Parma with Monty Parsky. Is there is this still kind of priority for you? Is it something that you're actively looking? Bpm Societa Ord And if so, sort of, you know, what, what shape and form, you know, would you like to see and what would be your sort of, you know, kind of ideal scenario in terms of value creation? Thank you.

Thank you, Delphine. As far as the first question about fees, let me remember that last year Q1 was a record level and was driven, of course, also the peculiar situation we were experiencing. So the fact that we were able almost to replicate last year, the only difference is coming from fees on lending, as I was explaining before, which as a matter of fact is now recovering. So let's be positive about the possibility to make better results as we expect in terms of fees and commission. Let me also say that Q2, Q3 and Q4 last year were not that strong like Q1. I have only April of this year as comparison to last year and I can anticipate that April in terms of investment product growth Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord numbers once we have a common strategy also with anime with our bank insurance activity that was not the case last year so very important for us the contribution comes from that and the possibility to exploit at the most the full power of this product factory M&A we frankly speaking we don't have a priority priority comes from the market opportunity we are examining all the possibility basically I think we speak more about agricole and Bpm Societa Ord for Montepaschi with 3.7%. So I think this is the reason why everybody expect possibly these two transactions. To be a shareholder does not mean that the opportunity for doing an M&A are ideal. So let's wait and see. Let's understand what the other counterparty are willing to do. but I think that we are in a good position to take advantage from every opportunity as well as I mentioned before, opportunity arising from smaller M&A which can enhance the capability of our product factory.

Thank you very much.

The next question is from Ignacio Ulargui, BMP Paribas Exame.

Thanks very much for the presentation and for taking my question. I have just one question on costs. I mean, how should we expect costs going forward in the context of a very solid performance in 1Q? And could you consider at a given point in time using that excess capital and that potential capital progression to take any managerial action to improve costs further? Thank you.

So thank you, Ignacio. So the trajectory of COS is, as you correctly observed, positively oriented. We managed in this quarter to deliver savings versus end of last year in general versus the overall savings. last year trend because this has been the impact, the result of the cost management actions we undertook since the announcement of the plan with the redundancy program in the replacement of existing, of older cohorts with new ones for a lower rate, for a rate of replacement that is lower than one. In general, the trend for cost that we expect to experience can benefit from additional marginal efficiencies. Let me only observe that you are not only below the trajectory of the plan, but we expect to continue to stay below this trajectory. The only additional qualitative point I may add on that is that within this overall trend, we expect to replace part of the running costs with change costs, so investments and expenses that are implemented in order to modernize the infrastructure of the bank.

Thank you very much.

The next question is from Luis Manuel Grillo-Pratas, Autonomous.

Good afternoon. Thank you very much for taking my questions. My first one is on the 2026 guidance. For multiple results, we have seen the disclosure that there is some room for overperformance, especially in fees, costs and cost of risk. I would like to ask you what is holding you to provide a more positive guidance, whether it is just a more conservative view, whether it is the weaker macro given the geopolitical uncertainty, or maybe could you also think about recycling any of these better performance into investments for the future? Then my second question is also on the CT1 guidance of the 14% that you mentioned. Could you please break down the main OCI movements that you observed in April. In particular, it would be very helpful if you could provide some sensitivity to changes in sovereign spreads, as well as any movements to the Montepaschi share price. Thank you.

Thank you. This is Giuseppe speaking for the guidance. I think we have been quite clear on page 20. You have all the different items compared to the business plan on 26. Of course, before tax, we are much ahead, I would say, of what, not the guidance, but what we expected before knowing the impact or the new fiscal impact. Of course, we have still some prudent approach related to the recovery of almost 100 million we have to perform in order to match the 26 business plan. After one quarter, even though we have recovered almost Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord that is already bettering because in February we were not saying that we would have matched the plan after tax but only before tax. Now we are much more confident to be able to reach also the results absorbing almost 100 million of tax effect. For common equity, I leave the answer to Eduard.

Yes, if you go back to the track record of Montepaschi share price I believe it was around 7.4 if I'm not mistaken end of March and end of April it was around 9 this leads to 1.6 times 110 million which is more or less our number of shares but to long story short slightly more than 30 basis points is the improvement in April we have in the pro forma from Montepaschi slightly less than 10 basis points is the improvement we had in February of the comprehensive income reserve so that for very comprehensive government bonds reserves great thank you thank you very much and maybe can I just do a quick follow-up on the tax rate as well since you know it's a very important guidance point

So this quarter came in at 36% and it was a bit worse than the 33% guidance last quarter. So could you please clarify what's the tax rate guidance for the rest of the year? Thank you.

Yeah, I think this is slightly higher than what we expect to have overall during the year. So, of course, the tax rate in Italy has been impacted by, as Giuseppe was saying, the budget law approved end of 2025. We expect to stay in the region of 35%, 34% to 35% overall for the whole of the year.

Thank you very much.

So it's slightly higher because there are items that are less impactful in terms of taxes, such as, for example, Montepaschi dividend maturing in the second quarter, which is part of revenues, but is taxed before the distribution, so it doesn't impact on taxation.

The next question is from Elena Perini in Pisa, San Paolo.

Yes, thank you for taking my questions and good evening everyone. My question is about your stake in Anima because you are at 89.95% so you have several times mentioned the opportunity to reopen Anima's capital to other partners to also strengthen the distribution relationship. Is still your view at the moment and how this can potentially help other bigger M&A options for you? Thank you.

No, of course, as you were mentioning, there is a possibility to open and to widen the possibility of accommodating both other banks or distributors' interest in Anima or also potential M&As. So to have the company listed would help, of course, the value determination of the company, the possibility to have some step in in a way which would be a bit easier than if we delisted the company. but of course we will not keep it forever listed for sure so let's wait this situation in which everybody is talking about opportunity and I think in a couple of quarters we will make a decision about it. As you know we can also decide to make a merger to consolidate Anima without any other action on the market.

Thank you.

The next question is from Noemi, Morgan Stanley.

Good evening and thank you for taking my questions. I have just a few. So in Q1, what drove the deposit decline, especially on the side deposits? And in terms of common equity, I appreciate the guidance and the market as of April. But I was wondering if you could give us visibility also in perhaps other moving parts that could impact common equity that will impact by year end. And then a follow up on the cost side. if I'm not mistaken you have plenty of room to implement a further early retirement scheme on top of what you have agreed with the unions with Q4 so I was wondering where this initiative sits in your priority list and also in the context of meeting the net profit targets thank you

I wouldn't say that there is a decline in deposit. Frankly speaking, we are 400 million in March below December, which of course has also a seasonality. But let's have in mind that in March we placed 1 billion of BTP coming, of course, from current account. If I may say in April, we are already above the figure of December 25. As you know, this has been the growth in deposit has been a signal in our bank growing year by year. But of course, we cannot expect to have a 5 billion of increase in deposit every year like last year. we have in our plan slightly growth of one and a half to billion per year having in mind that of course with the growth of last year we are already where we thought to be able to be in 2027 so we are not you know spending interest rate in order to keep more volumes of deposit but because of our footprint we increase deposit in any case Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord

Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord Bpm Societa Ord additional improvements working on a number of levers. For example, we signed recently an additional agreement for 100 headcount of reduction that are expected to be implemented during the remaining part of this year, mostly between the first and second quarter. The rest, as I said, is to confirm the current trajectory and to remix in favor of more investments, more change, more modernization of the banks, of the bank.

Thank you.

The next question is from Hugo Cruz, KBW.

Hi, thank you for the time. I have three questions. first on loan growth. You know, it seems a bit weaker than some of what than the peers that have reported already. I was wondering if you could talk about your market share of new originations for the main segments, you know, raising mortgages, corporates, etc. Then a second question on an AI, you know, I understand you want to be cautious with a you know with the guidance overall given the macro incentives but what I heard from you about the NII it sounded like all the trends would imply an increase to the guidance because I think guidance implies kind of flat stress of the year but you're talking about volumes going up margin expansion etc so why are you not raising your guidance for NII for this year and then the third question is around if you could tell us the pace of the impact of DTA absorption on the C2N ratio during the rest of the year. You've done 18 basis points in Q1. I was wondering what should we assume in other quarters. Thank you.

Thank you, Hugo. Long road. We were much more prudent, I remember, when we presented our plan vis-à-vis our competitor. we are happy about 1 billion of long road to we have a target of 2 billion for this year so again we don't want to sacrifice margin for long road as you have seen in our presentation we are growing in all the segment taking advantage also from Bpm Societa Ord to increase the investment so I think it's good that we are so close to take advantage from any potential movement but we are still waiting for some good market environment bettering of the market environment in order to push on the long road having said that again for instance for mortgage we are applying some new product in order to offset the reduction we have experienced in the last quarter, but we are still growing year on year. On NAI, Ed Wilsman.

Yeah, in AI, we definitely are seeing positive signals and expect to have results delivering a positive trend versus the first quarter of this year. Bear in mind that we have mitigated on purpose our AI sensitivity to avoid excessive dependency on AI. so to avoid riding too much the waves when they go up but also going too much exposure to the downside risk so net net if some of these conditions prove to be even more favorable, then we could revise our guidance. But for the time being, we prefer to stick to the indication to stay consistent with the exit level of December.

The other question was on DTA.

Yeah, more or less we have an expectation for the rest of the year of capital creation coming from DTAs that is similar to the pace we experienced during this quarter and consistent also with what I said of the 120 basis points of capital creation expected from DTA and the comprehensive income during the remaining part of the plan rise.

Many thanks.

Gentlemen, that was the last question. There are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Okay. Thank you for being with us and I'm sure we'll see you around during our road show during the next days. Thank you again.