Mediobanca Spa

Good morning. Thank you for joining the call. Commenting the first quarter of this started year, I would like to highlight two main features. The first one has been accelerating investment in our physical and digital distribution platform. This is across the different business where we have accelerated recruiting, accelerated transformation in the digitalization of the group, both in wealth management, in CIB, and in consumer finance. These important investments that are going to underpin the growth in revenue beyond the actual triage plan were coupled with very strong commercial flow, record for the summer quarters, where we have had 2.6 billion of net new money, which is again double the best industry and the best industry level at 10% of TFA. 2.1 billion of net new loans in consumer finance, up 12%, and increased activity in CIB where we have announced 27 deals in the quarter, which is plus 36% year-on-year. So, basically, revenue and profitability of all banking business went up again after one year where we have hit record revenue and results for each of the business. So, Basically, we have had an increase of 6% in net profitability in wealth management, 20% in CIB, and 5% in consumer finance. The main feature was also the growth in fee, which is 30% up compared to a year ago, and this was driven by wealth management and CIB. We have had a spike in consumer finance NII, And this was the positive trend in NII, while the negative trend in NII, which also was intended because we have taken an industrial view about the need to invest and have more TFA, was a temporary drag in NII in wealth management and in CIB because of all-time low credit spread, we didn't want to stack up with loans for two or three years with very, I would say, low profitability in corporate lending and wait for better margin trends in the second half of the year. Efficiency was preserved with the cost income at 43%. And as I said, this notwithstanding heavy investment in recruitment, in opening up new branches in Germany, in mid-cap advisory, in digital channels empowerment in consumer finance. So this was, as I said, and will be a year of important investment. Asset quality confirmed and preserved very strong with 51 basis points within our guidance of 55 basis points of core and net profitability at 330 million, which is slightly lower than last year because of Some extra gains booked in general announced this year with a more normalized insurance contribution. Very strong capital generation with 70 basis points in the last three months and chat one, which is in the region of 15.4. We have just started today the share buyback for 385 million, having been authorized by our AGM and SSM. So if we look at the business, we have had an affirmation of the model of PIB where 600 million euro of liquidity events were gathered in the last three months. Recruitment was very strong with 33 new sales staff and ongoing repositioning in terms of larger portfolio and higher end customer base. Deposit promotion at $750 million was fueled by also the promo that we launched. And very important, this mix is improving fast. We have had 50% of the inflow of TFA in AUM with a very important and steep increase in house product. Last, we did a very important agreement with Adya in Polus, which is going to underpin the next growth of a special situation fund of Polus. In CIB, we continue to work on one end, make it more diversified, more international, more advisory-driven, and you see here important results in terms of growing fees driven by advisory, 63% of fee in the quarter were advisory-driven, much higher than a year ago. And this is coupled with a steady decrease of RWA absorption. We went down in density to 37%, and we have reduced by 18%, 20% the capital RWA intensity of CIB in just one year. Consumer finance super solid print in terms of new business, 2.1 billion of up 12%, and this is on the back of very important reinforcement in personal loan distribution, now as 80% distributed by our direct network, and 36% of the direct personal loan are now distributed digitally. So Compass continued to print an important increase and contribution in NII up 8%. Marginality was up and also net profit was up. So going to slide eight, we are working heavily as this was the main target of our plan to have a stronger industrial footprint, which is feeding high and sustainable growth. why we are investing so much in terms of recruitment and digital. This will create the opportunity with a lower RWA intensity of important capital creation and hence higher distribution to our shareholders. So we confirm our guidance of having in the region of 9 to 10 billion of net new money with strong enhancement in physical and digital platforms. We see RWA decreasing slightly with more selective profitable loan growth offset by optimization. We see basically moderate growth in banking business revenue with NII flat and with fees up double digit in wealth management in CIB. Cost income to stay at 44% on annual basis and core to stay within the 55 basis points of NII. um guidance that we have uh leveraging in part of the overlays abundant overlay dotation that we have growth in eps between six and eight percent material capital generation so higher than what we said previously to to to the market so in the region of 15.5 and 16 and with the growth in parallel growth in the shareholder remuneration cash payout plus any share buyback that will be considered at the end of the year. If we go to slide 10, we see the steep increase we are having in terms of TFA. Imagine that a year ago, just a year ago, we were at $90 billion. Now we are at $103 billion, so plus 16% and plus 4% in a quarter. So this is plus $4 billion. If you look on the right side of the slide, we see how fast Mediobanca Group is growing and is growing at the level that few groups in Italy are doing. Comparison stuck up very well with 10% of TFA. We rank among the best, if not the best, gatherer in Italy, notwithstanding our, I would say, young life in this sector, in this business, and this gives you the potential, the opportunity potential we have in front of us. Loan book was basically flat. In one year, we grew 2%. This quarter, we went down opportunistically 1%. This is on the back of a stronger, I would say, trajectory of consumer finance, a more moderate and selective origination in the rest of the businesses. RWA optimization is ongoing. You see that we have had another decrease of 1% Q on Q, and we are now at 47.4 in terms of overall RWA as opposed to 50.3 of a year ago. So the kind of revenue we are generating are more diversified, more fee-driven, and more international if we look at also what is happening in CIB. Every single business improves its revenue contribution, wealth management, CIB, and consumer. We have had insurance going down 20 million because of non-recurrent item of Generali, and we have had lower contribution of all day function because of decreasing interest rates. Overall, fee went up 29%, so the component of fee within the revenue is more important than a year ago. If we look at the fee, we look at basically quarter to quarter comparison. So first quarter normally is more seasonal. So we have had an important increase in fee in consumer, in wealth management from 108 to 124. This was spread among different components. for sure compared to one year management fee, but also advisory fee and upfront fee were important, while performance fee in our network is a minimal component, much less important component. Important trend also in increase in fee in CIB, where compared to a year ago, we have had a jump, even excluding ARMA consolidation, And we see this as a continuing trend of supporting element from CIB. Consumer finance was even positive in fee because thanks to the buy now, pay later, we are substituting fee from insurance product from fee from buy now, pay later. Altogether, they were up 7% year on year. we decided on NII to basically push on the profitable value-generated lending, which is the consumer one, and to invest money to get more TFA in wealth management, so having more deposits, which naturally have a cost, and on the other hand, to pause in the new loan production in a city because, as I said, low demand and very and all time low marginality are not there to push for important growth and generate a poor return. So the breakdown of the different components. So we have something like seven, eight million less than than than a year ago. So this is spread between the increase in volume and spread in consumer finance page 13. Then lower contribution from wealth management and CIB, we have a higher COF that is 10 million and other minor effect is giving us the trend divided in two pieces, as I said, consumer finance, pretty good, and basically wealth management supporting TFA. On the other end, CIB waiting for better production in terms of marginality. If you see loan yield when are basically aligned to the last quarter in the region of 6%, funding cost is not that different, deposit cost went up. Here, in the past, we have forecasted a lower deposit cost, but as I said, we took profit of very important money money motion event and tfa increase to fund this kind of trajectory cost as i said these are spread in grow the business and regulatory we are doing in in the last two years much more on grow the business you see consolidation of new entities like Arma Partners. This quarter is the first quarter of consolidation, or at least last year we didn't have the consolidation, so we started the second quarter. So this is the comparison with last year. 3 million to start the Germany subsidiary in mid-corporate activity advisory. The rest is an addition of new colleagues to expand the business. And then, of course, there are also digital and regulatory items within this kind of trend. Cost of risk remain well within our guidance, 15 basis points. We are seeing a trend that we have expected both in terms of slight increase in consumer finance driven mainly by the mix. the mix we are producing much more personal loan this personal loan have quite a nicer and better profitability but also they have an associated higher cost compared to other cost of risk compared to other product net net the profitability as you have seen is going up we have used a very low level overlay so 7 million And hence, we reach this level of 51 basis points of core. Gross MPL stays within where it was. We have a slightly less loan in this quarter. So you see this 2.6. Net MPL is 0.8. The coverage is staying where it used to be, so quite high. It's very important the trajectory in terms of capital release that the bank is doing. On page 18 you see that Overall, we have had a decrease of 6% of RWA trend, which is more notable is what is happening, as I told you, in CIB, where from 17.3, we went down to 14.2. So steep decrease aligned to the new vision of CIB, which is consuming much less capital and is producing better results. So divisional return on RWA is quite good. we have had only one decrease, which is generally driven by, on one end, exceptional gain of last year and increase in book value of the participation. Robust capital generation, better than expected. So basically we have generated 70 BIPs. So then we have had some RWA saving, in particular in consumer, and then the 70% cash payout. So this is underpinning our capital distribution and is leaving still a large buffer over requirement of MDA. We have progressed also in our sustainability activity in environment, in social and governance with the old NZPA target and transition plan published and product development. We have also had a publication of 2024 PRB report and CSR initiative, where we have renewed our partnership with Cometa. And lately, we have had our shareholder general meeting, which have approved a number of items which were on the agenda, even include, of course, the share buyback. If we go to the divisional results and basically we say what I can add compared to the start of the presentation, I think the overall 2.6 billion were pretty amazing in terms of net new money divided in three pieces. Private banking 0.9. This is on the back of liquidity events. 0.6, a very important initiative in private markets. We continue to have partnership with the most important operator to distribute a liquid product. We are also reinforcing the liquid product with the new management account format with advisory service. This will be available for clients in 2025. In Premier, we have had a strong recruitment, 30 professionals, and the repositioning, adding new private clients, upper end, and on the other end, cutting exposure to mass market, which is not anymore the mission of MediVanca Premier, is going fast. You see that basically we have increased in MediVanca Premier, you see on page 26, The quality of our network, we have up to 90 advisors compared to June 23, 60 bankers and 40 financial advisors, and this senior component of the distribution network now is 29% as opposed to 23% of more than a year ago. The same, so the TFA related to this senior advisor went up from 34% of June 23 up to 42% of last year. Mediobanca Premier has had very important and interesting net new money also in terms of managed assets. So with the great productivity in terms of net new money per banker and also a level of market share in terms of net-to-money, which is pretty high. So 10% of total net-to-money was raised by Mediabanca Premier. As I said, important agreement with Adia for Polus with a commitment, which is now giving the possibility to Polus to reach approximately 11 billion of AUM, 11 billion dollars including commitment. of which 5 billion in special seats strategy, and this is a partnership which will lead to further growth, even a new initiative of POLUS, and will give us the possibility to expand TFA further. So overall, the progression of wealth management is going as expected. even after more important investment in hiring and also in digitalization. And I think this is important because if we continue to invest heavily, as I said, we will have the possibility to grow faster in the future. CIB, here again, we are having the initiative of the new plan now ready to contribute, already contributing to the numbers. We see the different profile, as I said, of CIB is more advisory driven, is more centered on one end, sponsor driven activity, on the other on two main verticals. One is tech, ARMA contributing heavily and having a quite robust trend also for the future and energy transition, which is printing a number of transaction and will continue to do. This is also coupled with, stronger mid-cap franchise. In Italy, even stronger and now also having the possibility to have cross-border activity and capturing interesting market share in Germany. Markets activity now are almost, I would say, up and running, all of them. I would say BTP specialist, CO2 trading and certificate distribution in Switzerland. So basically, These are initiatives that are contributing to the revenue, which are up 30% year-on-year. Profit is up 20% year-on-year, while RWA is down 18% year-on-year. Last but not least, consumer finance. Here again, Compass surprised us in terms of ability to print very profitable loan mainly done through its own network, so having a different and much better profitability thanks to the ongoing investment. Again, if we keep on investing, if we keep on doing initiatives like Buy Now, Pay Later, buying FinTech, investing in systems and IT, we will have a stronger Compass in the future. which will be more able to print directly loans with different profitability and answer basically you see that between what we have done in the traditional network and the new network and the new initiative of a light which is the new international by now pay later ecosystem for credit solution we are getting the benefit of Important new customer acquisition, as I said already in other call, is 40% of total company's monthly new client. We are enlarging distribution at variable cost. Today we have 29,000 physical and online posts, which is 50,000, 15,000 more than June 23rd. And basically, the partnership with Nexi and the access to the Swiss market are also other option of growth that we are exploiting. So if you see the number in terms of new loans are quite interesting. Page 34 is the sense of making a plus 12% in a quarter, which is normally seasonal. And in fact, we have had Last year, 1.9 million of new loan. This year, we had 2.1. And this was coupled with average loan book yield up 80 basis points. And this gives you the sense of ability and strength of Compass to price the loan. So Compass was able to shift the higher cost of funding to customer over the last, I would say, 18 months. And now we have reached 7.2 percent of a loan book net profitability so as i said asset quality confirmed as healthy as expected we knew that going up in terms of personal loan would have meant also higher core net net as you see on page 36 this is yielding a much better profitability because the the i would say the new loan net of cost and cost of risk is giving a record quarter, first quarter record in terms of overall profitability of Compass with 102 million of net profitability. As I said, insurance contributed always solidly, albeit with a less important contribution because of normalized results due to lower non-operative results driven by less capital gain and FE valuation and some decrease in PNC operating income. Nonetheless, it's still quite a positive contribution. Holding function, nothing to add but the fact that, of course, having lower interest rates environment, we did lower NII. We had lower NII and results. Basically, reiterating the guidance that I've given at the start of the presentation, I think Mediobanca enjoys a quite interesting position in the new interest rates environment because even having an NII flat for 2025 and 2026, we enjoy quite a positive trend in fees, which we see having a double digit increase in 25 and 26. And this should lead as we know to the APS guidance of up six to 8% this year and targeting the APS target of the plan. So the business plan at 26 at the 1.8, which is also a good trend in terms of EPS compared to the system where we could see decrease in EPS and or in revenue driven by lower interest rates. Thank you very much, and now it's time for your questions.

Thank you. As a reminder, to ask a question, you will need to press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. We will now take our first question. Please stand by. And the first question comes in the line of Pamela Zuluaga from Morgan Stanley. Please go ahead, your line is now open.

Hello, good morning. Thank you very much for taking my questions and for the presentation. I have a first question around your campaign for the premier deposit gathering. When should we start seeing the payback of this? Can you give us some color on the benefit that you expect on NII and or fees? And what reassurances can you give us that this pressure on NII is indeed only a temporary effect? And the second question is on capital. You are expecting capital to close around 200 to 250 basis points above your 13.5% target. and you have said before that you might explore further distributions above the one billion buyback that's in the plan. I was wondering if we can have an idea of when we should expect you'll make a decision on this. Thank you.

Thank you, Pamela. Campaign of Mediobanca Premier. Campaign of Mediobanca Premier are campaign you can see also done by other many other competitors the i would say most of the competitors that compete with the with medibanka premiere they do it we have seen that basically we have a conversion of at least 50 percent of each campaign into managed assets or into of course sort of advisory driven asset no so This is a very powerful tool and of course is having a cost of NII. So the cost of NII and the NII in wealth management is not going to improve much in the coming quarter because we want to go on with possible campaign while the NII of the group is going to improve in the second half of the year. thanks to the basically more important contribution relative basis of Compass and some new print of loans incorporated. So the rest, as I said, 50% is converted into managed assets, 20% stays in liquidity. The pressure on fees in wealth management and in general, in wealth management, what we can say here is that we have to look at all the fees. For a bank like Mediobanca, which is also dealing with sophisticated clients, we have to see the overall spectrum fees. As you know, upfront fee became very important. and became very important for tourism because of the demand of the market, the client of Mediobanca and the fact that Mediobanca is manufacturing those kind of certificates. So we retain profitability in wealth management and we retain profitability in also CIB. When we look at management fee, we have to think that basically we have had we are having a journey to improve this management fee. This journey starts from a situation of asset allocation of MediBanca Premier, which is more driven by its history. Its history is more of a bank which was selling at the start more deposits and basic insurance. So the penetration of equity, a more rich product, was lower and it takes a bit of time to get back to certain other industry, I would say, benchmark, taking into consideration, Pamela, that we have had the BTP Valore campaign in the last two years. So while if you look at all revenue and all fees, we are going in the right direction, it takes a bit more time to bring the management ROA to the level we want because of basically history, if you want, starting point and trend of the BTP value in 2023, 2024. For the rest, we see positive improvement in the quarter to come compared to this quarter that has more seasonality. In terms of capital, we want to take a decision at the last part of the plan because We are still growing in terms of not only organically, but every single year we normally do or consider a transaction in terms of M&A. So we will take a definitive decision on capital, extra capital, taking also into consideration SSM recommendation in the last year of the plan.

Thank you very much.

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Antonio Reale from Bank of America. Please go ahead. Your line is now open.

Hi, good morning. It's Antonio from Bank of America. I have three questions, if I may. The first one is to do with the NII outlook for this year, which you've lowered guidance for. So can you just talk us through what are the drivers behind the change in NII guidance? Now, you're normally quite good at budgeting and giving us targets. So I wanted to extend what's driven the change. You've talked about higher cost of deposits. I suppose some of these campaigns were known. An interesting comment was on the lowest ever levels in corporate and mortgage spread. So I'm interested in understanding the moving parts. on the NII. The second question relates to your guidance for EPS growth this year which was confirmed at 6-8% growth for the year and I wonder if this confirmation of the EPS guide despite the lower NII was driven by cost control or by the prospects for more share by backs given that you've increased the CT1 ratio guidance so that's my second question and lastly on cost of risk in consumer finance now that's gone up to nearly 200 basis points in the quarter and if I adjust that for the overlays you've utilized in the division and that's the first time since 2021 so I'd like to hear what you're seeing on the ground from clients and what's driving this normalization in

in cost of risk is it higher defaults lower collections i mean you've talked about early risk indicators so i'm interested in your in your in your review thank you thank you anii as i said that here the components are i would say three the first quite positive that is going to stay and become even stronger is nii in consumer for two reasons if we continue to print this kind of loan and we add like 200, 300 million euro every quarter of outstanding loan. And in the meantime, we refinance the liability of Compass, which were done at higher cost because they were done when interest rates were higher. Over the next quarter, 2025 and 2026, we will have a better contribution. As Compass NII is much bigger than the other, this is a very important driving force. Then there are two that are tactical. Why we lower the guidance? Because tactically we saw that industrially and financially, it didn't make sense to do the opposite. So to basically not profit from a situation where we can increase tfa and then transform them into basically managed assets which is our main target today the second is that as you know corporate spread are where and still are at the lowest marginality now as we don't need to basically to add instead of having plus one or plus two in nii we are flat but in on the other hand if you look at the profitability and the return on the rock the return on allocated capital to this kind of corporate load or even mortgage you arrive to the conclusion that this kind of return not only for us but also for most of the bank are having a rock below cost of equity so why shouldn't should we you know persist in doing extra production or increased production of loan if the return are poor we don't need we prefer to pause it and to wait tactically for better quarters with better marginality also because as you know we are not mainly a lending bank you know in terms of corporate activity at least so the third element is as I said and attracting deposits and waiting for interest rates to go down will give us, I would say, the ammunition to convert easier this kind of deposits when interest rates are going down into Mediobank homemade products that are more sophisticated and giving better returns. So it was a tactical decision given by the situation of spreads and the possibility to grow AUM. Now, we forecast a flat NII in 2025. In 2026, we set flat. We need to see if COMPAS is so good. We can also revise better the guidance, but today we are cautious because we don't want to to sort out the guidance that we have to revise in 2026 for NII. Yes, you are right, 6% to 8% EPS is mainly done with more, I would say, attention or more efficient management of cost. Then we hope that some other revenue in the next few quarters, apart from fees and NII, can be better compared to this first quarter. For instance, generally, this quarter has had quite a low compared to last year's contribution. If we see only the guidance of Generali, we see that the coming quarter can be better. Coring consumer, we already guided on the fact that we should have basically been equal all the rest to the pre-COVID level sooner or later. What happened is that as we have printed more personal loan, this is a different mix. So I would say that today we are having the increase of cost of risk to the level that you mentioned, which is driven two-thirds by the mix, one-third by the going back to normality to the pre-COVID. Which is very important is that net-net, so net of risk cost of risk and net of general cost, we continue to have a return on this loan, which is in the region of 30%. And this is why we are doing this kind of production as opposed to other production like CIB in terms of which they yield in terms of return on allocated capital, much lower return.

Very clear. Thank you.

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Azura Guelfi from Citi. Please go ahead. Your line is now open.

Hi, good morning. Two questions for me. One is on cost. Can you give us a little bit more color of the initiative that you are taking up to have a little bit more efficiency on cost while still maintaining the growth of the company? The other one is on the marginality in wealth management. When we look just at the management, we see the marginality is more or less a flattish quarter on quarter. And can you give us an idea on how do you think this will develop over time? And also, if you can, some color on the marginality of the different line, like private banking versus wealth management and trend in there, versus also your peers, if you can compare it, because you are in a different phase versus the majority of the other insect companies that we look at. Thank you.

In terms of cost, yes. As we are looking to maintain the same cost income, we are having more discipline in all the basically items. This doesn't mean that we are pausing in terms of recruitment or in terms of upgrade in grow the business because we will do a bit less in terms of number of initiatives But the most important will be confirmed in terms of, as I said, expanding the physical and the digital infrastructure of the group. There can be other, I would say, elements of cost which we can trim and we are planning to trim. We have also some... level of pruning of certain activities that are less, I would say, strategic compared to the one that I mentioned, this will lead to maintain this guidance of 44%. I think it's important to look at management ROA, but on the other hand, we have to grow the business and we have to expand in terms of or revenue, then I think we were a bit optimistic when we forecasted the 90 basis point. It's more likely we stay in 83, 85, but not having, I would say, less buoyant growth in terms of revenue and in terms of expansion of network. Now, it's like if we, I shouldn't say we have to basically do a, a swap between growth and profitability because it's not as rude as this one but as we have this opportunity to grow more or to grow faster as you have seen we need to press on this and grow rather than look at you know maximizing the P&L of single quarter of a growing wealth management unit this is today more important to capture now we are repositioning a lot of financial advisor bankers wants to join us, we need to continue to grow rather than, I would say, maximizing single quarter bottom line, knowing that management ROA, as I said, is also a journey because we need to have our network and our customer, in particular in Premier, more keen to take more sophisticated product or less simple product as opposed to the past. So this is not something that is happening in one or two years, require at the end a bit more time.

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Giovanni Razzoli from Deutsche Bank. Please go ahead, your line is now open.

Good morning to everybody. Three questions on my side. The first one is on the NII, because as you mentioned, the performance of the NII was quite resilient across the business divisions, and most of the decrease was reflected into the holding function and the banking book, which seems to me it's a trend that is different from what we have seen seen other banks, which are actually in a context of lower rates, increasing the contribution of the holding functions. Is it due because you don't have any macro-edging in place? So basically, you do not benefit from this facility, which basically sees a higher contribution to NII when rates go down because the banks receive a fix and the pay float. So that's my first question. The second one is on the cost of risk guidance of 55 basis points for the full year. If you can share with us what amount of overlays do you think to release in this guidance? And the last one, on the 2026, you said that you will consider at that time the potential allocation of the excess capital. If I'm not mistaken, during the plan you mentioned 14.5% as a target of CT1. Is my understanding correct? Thank you.

Thank you for your question. In terms of an AI, maybe one reason is that we can do not much macro edge because of our situation of the bank. In general, the holding functions are making The ILM of the group when interest rates are going up, they make more NII. When the interest rates are going down, they make less NII. So we see more on holding financial rather than on the business. In core, our assumption is to use 85 million of overlays. staying with an important amount also for the last year. As opposed to the last question was on capital, I reiterate that we are having more capital. We need to see how much of this capital we will use in terms of organic growth, how much, if any, we will use in extra organic growth in the last year. I would say 18 months of the plan. Any decision on extra distribution will take in at the end of the plan, having in mind also the new plan, because as you know, basically the bank will not stop in three years or in 2026. So we'll have to have a notation of capital even for the next year. And then we reiterate that a decision will be taken at the end of the plan.

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Luigi de Bellis from Equita SAI. Please go ahead, your line is now open.

Hi, good morning. Two quick questions for me. The first one is on the CIB. So what do you expect for the next quarter in terms of pipeline for the different segments and fees trend? And the second question, more a general one on the industry. So how do you see the evolution of asset management consolidation in Italy and abroad after the BAMI move on Anima and if this will change something in your wealth management strategy? Thank you.

Thank you, Luigi. For fee in IB, we see improvement in next quarter driven by the number of deals we have announced. This is coming from, I would say, different sources. So I would say large, mid, ARMA, and ANSI is spread across the different geographies and I would say bucket of revenues. In general, we continue to see a positive trend in M&A. I would say also We expect a better acquisition finance in the second part of the year. Debt activity, as I said, debt capital market and advisory debt is pretty good. Today, margins of new loan origination are all-time low. So, as I said, there is no point in growing the book with this condition. IPO. And in general, equity capital market, in particularly primary, remains still subdued. We don't see a big recovery in IPO. But IPO always had very, very small impact or limited impact, as you know, in our number. In terms of asset management, if we speak about asset management, for sure, The latest transaction we have seen in Europe, which is the one announced in France during the summer and the last one in Italy, are clearly indicating that asset management, in particular when it comes to liquid solution, require very big size. The small operator in liquid are going to be under more, I would say, pressure and pressure on margin, pressure on ability to sell product. So name of the game in liquid solution is becoming much bigger. In alternative is also a matter of size, but you can have a place in the market if you have a specific tailor-made product. And this is something that honestly we are not going for because Our main driver is wealth management, is distribution, is not production. In production, we have our internal Mediobank SGR, which is working like other asset management company, manufacturing product and assembling third-party product. And we have in Polus and in other, like Ram, I would say boutiques that are covering specific asset class. we don't plan to grow in asset management doing an acquisition in something that is in liquid solution. While in wealth management, we continue to grow organically and we always look at opportunity if they can accelerate our rhythm of growth, which is already very, very big in net new money. So if we can add more distribution also through small investments Team uplift of M&A, we will look for that. But I think these are two different, quite different, I would say, activity asset management as opposed to wealth management. Thank you very much.

Thank you. We will now take our next question. Please stand by. And the next question comes from a line of Britta Schmidt from Autonomous Research. Please go ahead. Your line is now open.

Yeah, thank you for taking my question. Just a clarification on the capital and share buybacks, please. I mean, the capital guidance is going better, but it seems that you indicate that no new share buyback will be announced until the end of the business plan. So does that mean that possibly the $1 billion over the overall business plan is going to be dependent then on growth versus M&A? Should we read into this that you're perhaps leaning a little bit more towards M&A and wanting to keep the options open? and how would that impact the business plan target of the 180 EPS? Thank you.

Sorry, Britta, maybe I was not precise, but what I wanted to, we have to separate the last buyback contemplated by the plan as opposed to what is, what exceeds the 14.5%, which is a different chapter, no? I would say that for the last tranche of buyback, we will decide most likely at the end of the fourth quarter of this year, while basically on what is exceeding 14.4 at the end of the plan, so basically one year after. But, I mean, are two different decisions, and the last buyback of the plan today is something that is coherent with our number, but the formal decision and the decision has to be taken in the last quarter of this plan, of this financial year.

Thank you. Thank you. As there are no further questions, I would like to hand back to Mr. Alberto Nagel, CEO, for any closing remarks.

Thank you very much for your attention to your question. Let's hope to have you all in the next call on February 2025. Bye. Bye-bye.