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.