Banco Bpm Societa Uns/Adr

Good evening, this is the Coruscall conference operator. Welcome and thank you for joining the Banco Bpm Group 9 months 2026 results presentation. As a reminder, all participants are in listen-only mode and 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. We kindly ask to limit yourself to two questions only. At this time, I would like to turn the conference over to Mr. Arne Riscassi, IR Manager of Banco BPM. Please go ahead, sir.

Good evening, everyone, and thank you for joining Banco BPM conference call to present the results for nine months, 2026. Banco BPM, the presentation will be hosted as usual by our CEO, Mr. Castagna, and our Joint General Manager, CFO, and Mr. Ginevra. Let me remind that all the documentation will be available on our website. It's already available on our website under the investor relations section. And now I hand over to Giuseppe.

Thank you, Arne. Good evening, everybody. Thanks for being with us. I am here to present a very good nine months results at the record level for profitability and shareholder remuneration. These are results based on long-term value creation and robust fundamentals, as you will see in a few minutes. Let's start from net profit. Let me talk of adjusted pre-tax net profit because, of course, you know there is some issue about accession. So, the first result is that in the nine months 26, we registered 80% of growth vis-à-vis nine months 25. and if we go back to 21 we have a 19% CAGR thanks to improved revenue mix of course you know very well our track record in fee income and product factory together with a reduced cost income and a very low cost risk The adjusted net income after a tax rate that for this year is 34% vis-à-vis the average 31% of the previous five years is in any case better than last year at 1.53 billion compared to 1.49 billion. These results, again, are driven by excellent commercial achievement, both in terms of customer loans, plus 4% year on year, on current count and deposit, again, plus 4%, and indirect funding, plus 7%, with a gross EMP ratio below 2 billion, at 1.9 billion, and a net EMP ratio at 1%. and a capital which is still well above 14%, at 14.27%. This brings us to a net income of 1.51 billion, which allows us to confirm both the guidance to above 1.95 billion for 26, The interim dividends confirm that 50 cents per share amount to 750 million with an increase of 8.7% vis-à-vis last year interim dividends which was 46 cents. Also the guidance for this year we can confirm is increased to above 1 euro. The total remuneration for our shareholder is increased as we anticipated in the presentation of six months from 6 to 7 billion, which leave us for the next 18 months to deliver 4 billion of remuneration for our shareholder, which means almost 20% of our current market cap. This of course is including the inaugural share buyback whose amounts will be determined following ECB approval. On page 7, let's check what is making the difference. It's a combination of increase of revenues through diversification, coupled with progress in efficiency in terms of cost income and reduced cost of risk. On the left part of the slide you can see how total revenues grew 2% year on year, having non-NII revenues growing from 49% to 50%, which amounts to 52% if we consider NII at full funding cost. In the last two years, following the acquisition of Anima, the non-NII revenues grew 39% versus last year, 4%. This allowed us to compensate the reduction in NII coming from the reduction of interest rates in the last two years from 2.6 billion to 2.3 billion. The excellent performance in non-NII revenues come from 650 million in the last two years coming from total non-NII revenues driven by the increase in product factory from 700 million to 1.19 billion which means 470 million of increase amount. The cost went down 2% year on year. The total cost income went down from 46 to 44% and also went down the cost of risk from 34 basis point of last year to 29 basis point of this year. The net MP ratio, as I was mentioning before, is down to 1%. Let's have a look to the commercial volumes momentum, which is doing very well, not only in core direct funding, where we are experiencing 4% of growth year on year, which is quite the natural pace of growth for our bank, coupled with indirect customer funding for 7%. which means 7 billion of net inflows coupled with only 1.5 billion of market effect due to the volatility of the market. But the good news is the increase and the growth in core performing customer loans which grew 3.7% and the new lending for this year in the first nine months amount to 21.3 billion of which 7.5 billion in the third quarter 26 which is plus 32 percent compared with third quarter 25. Asset quality. Again, it was mentioned the results of going down 2 billion. I have to mention that in the last 22 quarters, we were the only bank to have experienced a reduction in the MPE ratio, a constant reduction quarter by quarter, which is a sort of unique case amongst our competitors. in which the second best performer was able to reduce for seven times in a row the MPE ratio. This shows our attention to risk, to loan growth done with a lot of focus on quality and, as we'll see ahead, also on profitability. The net bed loan ratio is down to 0.3% and if we exclude the MPEs with state guarantees, the net bed loan ratios is before one basis point. this is also thanks to a very good default rate which is down to 0.71 percent together with the reduction also stage two loans which are down from 8.1 to 7.5 percent capital on page 10 again we want to show how in the last 21 months we were able not only to recover more than 240 basis points of negative impact due to the ANIM acquisition, coupled with more than 60 basis points of regulatory headwinds, notwithstanding that, and so starting from 12% after these two Edwins were able to recover up to 14.27% calculating assuming inclusion of retaining profit based on 80% payout. As you know, we were asked by ECB to not consider the inclusion of Interim Profit until they will authorize us to share buyback capability. So the stated Common Equity Tier 1 is now 13.8%. Let's go to the profit and loss on page 12. You can see both the quarter-on-quarter year-by-year and the year-to-date. Basically, both are growing between 1% and 2% in core revenues. Operating costs are Minus 2% both year-on-year and quarter-by-quarter, the pre-tax profits are up to 7.5% and of course for us is quite normal now to talk about pre-tax profit due to that the taxation that has been applied in the 26th and the recent maneuver of 27 which you know are not already known exactly in the impact they will do for this year and next year of course the taxes are increasing of 120 million in nine months leaving us with the net income stated of 1.5 10 1. 513 billion on 9 months and 453 million in Q3 compared with 450 of Q3 2025. Let's have a look at the growth that we had in terms of profit from pre-tax. As you can see, on a yearly basis, we were able to grow 164 million, mainly due to non-NII revenues for 90 million, reduced operating costs for almost 40 million, and total provision reduced for 35 million. The effect of the NII will be much more evident starting of course first in this fourth quarter but especially in 2027 and I will go again on this when we'll talk about NII. As you can see the growth is supported again by a combination of non-NII revenues growth with a cut in cost and lower provision in cost of risk. Let's go at NAI on page 13, an increase of 4.6% on a quarterly basis year on year, 0.9 in nine months for this year, which comes from an increase of the commercial spread, which is going up from 3.03 to 3.21, Mostly, basically, thanks to liability spread. As you can see, the asset spread is going down from 1.43 to 1.41, but this is not due to a negative repricing of the new loans, as we will see in a minute, but by the early reimbursement of loans with higher spread. The sensitivity is always around 150 million to say exactly now we are at around 160 million. This is due to the reducing of replicating portfolio down from 27 to 25 billion and the reduction of the indexed current account which now amount to 34% versus 37% of December 25. The contribution to the increase of NII came also from the reduction of the cost of new wholesale bonds issued this year. As you can see on the bottom right side of the page, you can check all the different classes of bonds issued by the bank, which from covered bonds 281 experienced always a big reduction not only in terms of the previous issue in 25 but of course especially if you compare it to the issue done in 24. Let's have a look to the lending volumes. Year-on-year, again, 3.7%, year-to-date is 2.5%. The main contributor to this increase are the non-financial corporates, which are up 4.5%, always with a very low risk profile due both to the footprint of our clients, 72%, in north of Italy, and also to the big part of loans secured. As you can see, 46% of our loans are secured, of which 23% with state guarantees. If we go to small business, this 46% increased to 62%. New lending, 7.5 billion in Q3, basically the same amount of Q2, but much higher of the 5.7 billion of Q3 2025. And as you can see on the bottom of the histogram, this is also coupled with an increase of spread applied. So we pass from 1.41 of spread in Q3 25 to 1.52 of spread in the asset spread for the new loans issued this year. This should bring soon to a recovery also on the total asset spread also because the increase in Oribor will most possibly not bring to early repayment during 2027. Net fees are up 5.6% year on year as far as investment product fees are concerned, which now represent 51% of total fees. If we go into details, you can see that on a yearly basis, the big contribution was brought by ANIMA contribution plus 40 million. and by the running fees, which grew 22 million on a yearly basis. Meanwhile, we have reduced contribution for only 6 million in the upfront fees, which I can anticipate will be fully recovered already in Q4 26. The investment product sales was 17.3 billion, slightly higher than 16.9 of last year, and this pace has been confirmed also by the October investment sales product in which we registered 2 billion of sales together with the sales of 1.1 billion of BTP. The same kind of increase and reduction you can see also on a yearly base quarter on quarter. Talking about other fees, we have basically still the final impact of eco bonus which are facing out by the end of this year, 13 million lower than last year. Meanwhile, we have a good increase in payment system, plus 16 million, together with good fees in trade finance, which almost offset the reduction in structural filings for lower volumes due to marginal interest rates. Let's have a look to our growth in the total customer financial asset. This is driven especially by a very good performance of our commercial network in which we grew 4.9% year-on-year and 2.2% year-to-date. On yearly basis, we were able to grow 11 billion, which are basically mostly represented by net inflows and increase of deposit for almost 5.5 billion. Meanwhile, queue on queue, we had a very good contribution for net inflows of almost 2 billion, but offset by negative market effect in last quarter for 1.6 billion. If we include Anima total customer financial asset, we grew to 395 billion, of which 208 are account for Anima, which register almost 5 billion of reduction, all entirely coming from market effect for 5.7 billion. The contribution of Anima, as I mentioned before, is still very good for the bank. We have a contribution to total revenues of 14% higher vis-à-vis last year and 22% in terms of net income. We mentioned the increase of product factories contribution. Let's have a look again of the last two years, basically comparing the acquisition before and after ANIM acquisition. As you can see, we have been able to reach almost 1.2 billion of contribution in 9 months 26. which is again 450 million plus vis-à-vis two years ago and 90 million plus vis-à-vis nine months 25 and now represent 26% of the total contribution to our revenues. As you can see the 1.191 These nine months has basically reached the target for 26. Meanwhile, we have another 90, 100 million to increase next year to match our target for 27. But again, 90 million is the usual pace of growth that we have been registering during 26. Let's talk about cost discipline. Very good result, minus 2%, driven by staff cost, minus 3%, mainly thanks to positive contribution from voluntary exit schemes. Meanwhile, we have basically uneven results in terms of other administrative expenses. and DNA with a reduction in terms of ASA and a small increase in terms of DNA due to the increase in investment for technology investment, IT investment. Page 19, some more detail on the good performance of cost of risk and reducing MPs. Here you have a bit more of detail about the different gross MP ratio, net MP ratio, and on the bottom side, the MP ratio excluding state guarantee, which amount in terms of net total MP ratio to 0.5% and again net bed loan ratio at 0.09%. So basically we don't have any more bed loans in terms of net bed loans. The results driven to a cost of risk which was reduced from 40 basis points fully at 25 to 29 basis points thanks to a reduction of default rate from 0.84 to 0.71 and an increase in cure rate from 5.64 to 7.32%. The consistency in continuing to reduce MPE and providing support with provision led us to increase the MPE ratio coverage ratio at 47.4% which increased to 58% for MPs and 80% by the loans in terms of MPs without considering state guarantees. I leave the floor to Edoardo for the financial results.