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Good morning, ladies and gentlemen. Before I hand over to Ms. Magda Palczynska, Head of Investor Relations, a reminder that today's call is being recorded. Ma'am, you may begin.

Good morning, and welcome to Unicredit's fourth quarter and full year 2025 results conference call. Andrea Orchel, our CEO, will take you through the presentation. This will be followed by a Q&A session with Andrea and Stefano Porro, our CFO. Please limit yourself to two questions. Andrea, please go ahead.

Good morning and thank you for joining us. I'm proud to present our record fourth quarter result, crowning our best year ever and concluding five years of Unicredit Unlocked. Unicredit Unlocked was a transformation beyond what anyone thought possible. It released Unicredit's potential, taking us from laggard to leader among legacy banks, and set a new benchmark for banking. It allowed us to lead the way in all metrics, including profitable growth and distribution. It exceeded all the KPIs we set for ourselves and built an incredible momentum that sets us apart today. Some teams might see this achievement as a reason to pause and reflect, but not this team. This team is taking this momentum and using it to dramatically increase our aspirations, expand our vision, and supercharge the next phase of our profitable growth. While others are now following the path we carved with Unicredit Unlocked, we are determined to leap ahead. Today, we transition from Unicredit Unlocked to Unicredit Unlimited. If Unicredit Unlocked freed up our bank's potential, Unicredit Unlimited is about transcending the boundaries of legacy banks to continue to lead in the new competitive environment that includes fintechs and hyperscalers. Our people remain the linchpin across the two phases. They are dynamic, driven by excellence, and continuously upscaled. They are able to adapt to the changing needs of our clients and the environment, delivering faster decision, better service, and more creative solutions. We are an institution with the flexibility to navigate the unprecedented speed of technological change and the unpredictability of geopolitics. This is the start of a bold new era for our bank, one defined by unlimited possibility, bold ambition and fundamental rethinking of what a pan-European bank should be. We're doubling down on accelerating profitable growth and we're doubling down on our transformation, challenging every assumed limit of what Unicredit can be. This is necessary and it is urgent. FinTech and hyperscalers are not slowing down and technological development is only speeding up. It challenges us and redefines the boundaries we used to take for granted. But the work we have done in Unicrate Unlocked positioned us uniquely to go beyond these boundaries. We have the credibility, the ambition, the motivation, and the determination. We have the momentum and the strengths. We have a clear vision and a clear strategy. We have the proven ability to flex and adapt to manage change. The time has come to rewrite the rules of the game. This means fundamentally reimagining what a bank must look like. It means overhauling our inherited assumptions, outdated models, and artificial boundaries. It means not being bound by convention, but challenging them wherever they are found. It means recognizing that the greatest risks are not change and volatility, but remaining still and yielding to artificial limitation. Unicredit Unlimited is our commitment to move beyond those constraints, to think, to act, and build without limits. Unicredit Unlimited will provide a new blueprint that blends the strengths of a traditional banks, the agility of a FinTech, and the dynamism of a technology company to create a personalized offer that truly puts the client of today and the clients of tomorrow at the center of all that we do. It will enable us to continue to both grow profitably faster and generate capital more than any other bank in the market. This phase reflects our unlimited ambition for our clients, unlimited opportunities for our people, unlimited potential to deliver profitable growth and distribution for our shareholders, and the commitment to provide limitless opportunities for future generation of Europeans. Just as we set the transformation trajectory in the past with Unicredit Unlocked, now we are both accelerating our quality top-line growth and doubling down on transformation, leveraging modern technology and AI to push the boundaries of what is possible. With Unicredit Unlimited, we aim to exceed all expectations of what a bank can be and forge a new path for a new era of European banking. Our ambition has always been clear, to become the benchmark for banking and unlock our bank and our people's potential to deliver for all our stakeholders. From 21 to 25, we did exactly that. We maximized efficiency, both operational and capital, while reigniting quality top-line growth, delivering unmatched return on tangible equity and sector-leading distribution growth. We laid strong foundation for the future, leveraging a supportive risk and cost of risk environment. We have moved decisively to become the benchmark of a sector, delivering top tier net revenue growth, the best operational efficiency, market leading organic capital generation, and superior return on tangible equity. This outperformance is not theoretical. It is a testament to our ability to execute, to deliver what we promise, and to do so consistently, quarter after quarter, year after year. From 2026 to 2030, we will change gears, striving to transcend the boundaries of service, productivity, and efficiency that still constrain legacy banks. We will further accelerate our quality top line growth, capturing profitable market share across the right geographies, the right client segments, the right products. We're building on the last five years to deliver a decade of unmatched performance and returns. The pillars to reach this success remain unchanged. Quality top line growth, operational and capital efficiency, profitable bottom line growth outside organic capital generation underpinning growing distribution. Our outcome remains unmatched per share growth at high return on tangible equity and outsized sustainable distribution for the benefit of all our stakeholders. We aim to accelerate our quality top-line growth, growing net revenue at 5% annually to around $27.5 billion by 2028, and directionally aspire to exceed $29 billion by 2030. We will double down on transformation, leveraging technology and AI to reset the efficiency frontier. This will take our cost base down 1% annually to around 9.2 billion by 2028 and below 9 billion by 2030. This leads to best-in-class profitable growth as we aim to grow net profit at a 7% compounded annual growth rate to around $13 billion by 2028, increasing our return on tangible equity above 23% and directionally aspiring to reach $15 billion by 2030 with a return on tangible equity of 25%. For shareholders, this translates into unparalleled per share growth and a continuation of our market leading distribution story. With 80% ordinary payout and before complementing with excess capital deployment or return, we aim to deliver circa 30 billion in the next three years and 50 billion in the next five. This is in addition to the 9.5 billion related to full year 2025. We're in an enviable position of not having to compromise between being able to grow at the top of our sector and remunerating shareholders attractively also at the top of our sector. And we have excess capital available to accelerate our growth and distribution further should we choose to pursue M&A or returning it to shareholders if no better opportunity for deployment is found. These financial strengths and the structural advantage of our presence in 13 plus 1 market provides us with a unique advantage for inorganic growth. Any M&A will be approached with the same discipline applied to date. Three core elements underpin our superior equity story that intends to deliver a decade of outperformance with an unmatched combination of profitable growth and distribution. First, our winning proposition. We have proven our ability to relentlessly execute, transforming from lager to lever. We benefit from structural advantages that are hard to replicate and even harder to match. Second, strong momentum. Full year 25 was a year of record performance, achieved while absorbing more than one billion of headwinds from rates and 1.4 billion of front-loaded extraordinary charges to strengthen our future trajectory. Third, our winning strategy. Unicredit Unlimited is a plan designed to reset what best-in-class looks like. We will accelerate quality growth and redefine sector efficiency, pushing beyond traditional legacy boundaries. We have proven We have a proven and scalable transformation blueprint. This is enhanced by structural advantages combining attractive geographic footprint, best-in-class product offering, and a high-quality client franchise. This blueprint is rooted in group scale with local reach. We started by putting clients truly at the center, unifying the organization around one common vision, strategy, and culture. We empowered our banks and our people. We shrunk the center to what truly adds value and benefits from scale, ensuring our banks are as independent as possible within one clear group strategy and framework. This has created a bottom-up, execution-driven culture that is delivering exceptional results. We harness scale only where it genuinely creates advantage. Product factories, technology and data and AI, procurement, unlocking synergies and raising effectiveness across the group. This federal model enhances the entire system The group provides platforms, capabilities, and direction while empowered local bank deliver for clients and drive superior performance. Unicredit Unlocked was built around one core belief, that there was an unmatched potential inherent within our bank that needed to be unlocked by leveraging our structural advantages. First, our attractive geographic mix. We have the only truly pan-European bank with 13 banks plus one embedded across Europe with top three position in 90% of our markets. This gives us scale, diversification, stability, limited effects dispersion in our result, lower geopolitical concentration compared with other cross-border models, and it provides strategic optionality including M&A opportunities across 13 plus one markets. Second, our high-quality client mix. We have more than 20 million primary long-standing clients' relationships skewed towards private, affluent, and SMEs, where returns are structurally more attractive, driven by a higher ROC, cross-selling, and crossover ratio. Third, our targeted product mix. Our group product factories combined with our granular local reach provide a breadth and depth of offering that local competitors cannot match. All of this is brought together and leveraged by our people, continuously striving for excellence, raising standards every day, and turning strategy into delivery. Our structural advantages reinforce each of our three financial levers, delivering an unmatched combination of profitable growth and distribution. First, operational excellence. Our pan-European footprint is geographically close and increasingly integrated. We increasingly operate on shared platform, common infrastructure, and converging processes with common products, delivering unmatched efficiency. Second, capital excellence. We combine high-margin lending with capitalized products distribution, enabled by our unique product factories seamlessly connected to our distribution and a client mix skewed towards more profitable segments. This allows disciplined capital deployment at high ROAC, driving both profitable growth and capital generation. Through increasing internalization, we are retaining more value across the chain, including investment, insurance, and payments. Third, quality profitable growth. We're exposed to structurally higher growth in Central and Eastern Europe, with limited effects dispersion, and to a fiscal stimulus dynamics in Germany. Italy remains our core capital life growth engine, while Austria ensures resilience and further growth potential. Our federal network means we lead in cross-border solution, amplifying growth through cross-selling and upselling across market and products. This is why our outperformance is structural and gives us confidence in our superior growth and distribution over time. We have delivered top-tier net revenue growth and established ourselves as the leader in efficiency, organic capital generation, and return on tangible equity. We have outperformed peers in value creation, driven by strong share price performance and distribution growth, resulting in best-in-class shareholders' returns. The past five years demonstrate our consistent execution and outperformance, positioning us to extend this leadership into the next five, achieving a decade of outperformance. We have delivered a record fourth quarter and record full year, crowning 20 consecutive quarters of quality, profitable growth. This strong momentum is broad-based across all KPIs, delivering today while building for tomorrow. We are the benchmark, and we are entering 2026 with unmatched momentum. NII, fees and net insurance, cost, organic capital generation, net profit, and Rote all performed better than expected at the beginning of the year. The underlying engines remain strong. NII sequential growth for the first time since rates began to normalize. Fees and net insurance drawing ahead of expectation, supported by investment products and the internalization of life insurance. Cost, flat, entirely absorbing new perimeter, minus 1.8% without them. This allowed us to front-load more than $1.4 billion of extraordinary charges in hedging and integration costs so that future profitability is cleaner and stronger. As a result, net profit reached $10.6 billion in 2025, up 14%, with return on tangible equity increasing 1.5% to 19.2%, or, importantly, 22% when adjusted for excess capital compared to peers. Distribution increased 6% to $9.5 billion, crowning our best year ever. On a per share basis, we accelerated further with EPS up 20%, DPS up 31%, and tangible book value per share up 19%. Our revenue engine remains strong. NII proved more resilient than anticipated, fully absorbing over 1 billion of rate compression. Margins remain stable, supported by quality loan growth of 4 percent and discipline pass-through of 31 percent. We saw the first sequential NII increase since 2024, up 2 percent quarter on quarter, a clear sign that the trough is behind us. Fees and net insurance continued to grow, up 6%, driven by accelerating investment fees, supported by strong commercial momentum, internalization of life insurance in Italy, boosting net insurance income. Fees and net insurance also saw a sequential pickup in the quarter, up 1%, with their ratio to net revenue reaching a top-tier 36%, up 2 percentage points. Investments, including hedging costs, were down 14% as they were impacted by preemptive hedging costs in the quarter. Investment would have been up 60% without that. The contribution from equity investment is set to materially increase in 2026 as the impact from the equity consolidation of Commerzbank and Alpha fully materializes and hedging costs decrease. Trading and balances, excluding hedging costs, declined due to a positive one-off impact on balances in 24. They would have been up 2% excluding this. Overall, our top line remains well diversified and increasingly balanced, with NII stabilizing and growing, fees compounding, and investment poised to strengthen significantly. Our net revenue remains resilient, supported by a disciplined approach and a cost of risk that remains structurally low. Cost of risk stands at 15 basis points, continuing to benefit from strong write-backs and confirming the benign credit environment across our geographies. We have kept overlays unchanged at 1.7 billion, the highest in the industry, preserving a significant buffer to mitigate future pressure on cost of risk or to further support profitability. Asset quality remains sound, net NP ratio at 1.6%, low default rate at 1.3%, coverage broadly stable at 44%. This consistent quality across portfolio demonstrate prudent origination, robust underwriting, discipline, and tight monitoring. Together, these drivers sustain our net revenue through the cycle. Our operating performance was better than expected, with GOP down only 2%, 1% excluding one-off hedging cost. costs remain flat, whilst at the same time fully absorbing the integration of Vodeno Ion, Alfa Bank Romania, the internalization of life insurance, and the continued significant investment in technology and people. Excluding new perimeter, costs would have been down 1.8% this year. Our cost-income ratio remains the best in the peer group, supported by resilient revenues and strict cost control, and confirms our ability to deliver efficiency while continuing to invest. Even with rate headwinds and significant investment, we preserved sector-leading operating efficiency, reinforcing our competitive advantage. As a result, our cooperating performance is materially better than our expectation, with GOP resilient, revenue stabilizing, and the bank entering 2026 with a much stronger underlying run rate. This is efficiency with purpose, streamlining where it matters, investing where it counts, and ensuring that Unicredit continues to deliver sustainable, high-quality growth. We delivered record profitability, taking advantage of one-off gains, life insurance stake revaluation, Commerce Bank badwill recognition, favorable taxes, and higher than expected Russia contribution, together with strong momentum, to front-load more than $1.5 billion of integration and one-off hedging costs to strengthen our future trajectory. Net profit reached 10.6 billion, up 14%, return on tangible electricity exceeded 19, with return on tangible electricity at 13%, reaching 22%, up one percentage point, and best in class. Capital excellence continues. Organic capital generation was strong, yet again, broadly in line with net profit and complemented by other one-off levers. This allowed us to support $9.5 billion in dividends and share-by-backs and the equity consolidation of Commerce Bank that will significantly contribute to our future growth while keeping our capital position essentially stable. The decline of our CT1 from 59 to 14.7 was due to expected significant regulatory headwinds and additional taxes in Italy. On a pro forma basis, for the equity consolidation of 29.8% of Alfa Bank and the Danish compromise, our CT1 ratio shall increase to 14.8%, although with a timing mismatch. As such, net of regulatory headwind and Italian taxes, our CT1 ratio would have remained stable at over 59%, while supporting 9.5 billion in distribution and circa 3.5 billion from equity consolidation of Commerce Bank and Alfa. Italy confirms its leadership. outperforming peers across all KPIs and acting as the group capital light growth engine. In 25, our franchise gained strong momentum with loans and deposit growing 2.7 percent and 3.8 percent, respectively, expanding our market share in the targeted segment. These commercial strengths supported a resilient, top-line performance despite the challenging rates environment, which hit Italy above and beyond any other of our markets. Revenues were down only 3.1 percent. NII declined 7.8 percent, but excluding the impact of rates, grew 4 percent, giving us confidence in what we can achieve going forward. Indeed, NII shows a clear acceleration in the quarter, and we expect its sequential growth to consolidate further in the first half of 2026. Cost of risk remains stable at 27 basis points. Fees and net insurance continue to grow up 6.5%, supported by strong commercial momentum, with total financial asset excluding deposit up 12%. We continue to improve our efficiency while investing, with costs down 2 percent. All this translates into a ROAC of circa 27 percent, the best in the country. Germany confirms its leadership in efficiency and profitability in the country, remaining the group's resilient anchor. The franchise is also showing the first signs of acceleration, with loans up 1 percent, gaining market share in the targeted client segment. Revenues increased 2.1 percent despite the challenging rates environment. NII was up 0.6 percent, visibly accelerating in the quarter up 1.3 percent, giving us confidence in what we can achieve going forward. Cost of risk remained stable at 20 basis points. Fees and net insurance grew 4.4%, supported by strong commercial momentum, with total financial asset, excluding deposit, up 7%. Germany continues to deliver operational efficiency while investing, with costs down 4%. All this translates into a ROAC of 21.3%, the best in the country, despite substantial regulatory headwinds. Austria confirmed its leadership in efficiency and profitability relative to its peers in the country, remaining another group resilient anchor. The franchise is showing signs of acceleration, with both loans and deposits growing 3%, increasing market share profitably. Revenues declined 3% due to the challenging rates environment. NII was down 8. The trend clearly reversing in the fourth quarter, but was up 5.7% sequentially. Cost of risk remains low at five basis points. Fees and net insurance were up 1.8%, 6.3% excluding the disposal of card complete. supported by strong commercial momentum, with total financial asset excluding deposit up 6 percent. Austria continues to deliver operational efficiency with costs flat while investing. All this translates into flat net profit at a ROAC of 22.6 percent, the best in the region, fully absorbing NIA headwinds and a higher bank levy in the country. CEE confirmed its leadership in profitability and efficiency in the region, remaining the group's gross engine. The franchise shows strong acceleration with loans up 11% and deposits 7%, delivering on our ambition to grow profitable market share. Revenue rose 5.5%. NII was up 2.5%, showing strong sequential growth. Cost of risk remains low at 11 basis points. Fees and net insurance grew materially by 10.7%, supported by strong commercial momentum, with total financial asset excluding deposit up 20%. Central and Eastern Europe continues to deliver operational efficiency with a cost-income ratio at 34.6%, absorbing most of the impact of new parameters. All these translate into a ROAC of 27.4%. Client solution is our product factories that converts group scale into capital light, repeatable growth. They represent more than 90% of group fees and net insurance. It is central to how we strengthen client connection while improving the quality of our revenue mix. Client Solutions delivered $11.7 billion of net revenue, up 5%, and $8.2 billion of fees and net insurance, up 8%. Within that, investment continued to perform strongly, with net revenue up 9% to $2.5 billion, supported by the continued expansion of our offering and the strengths of distribution, including strong growth in one market. Insurance, now a meaningful growth pillar, was up 15% to $1.1 billion. The internalization of life insurance further strengthened our value retention and positioning. Advisory and financing solution net revenue grew 17% to $2.1 billion, reflecting our ability to leverage the franchise across markets and client segments. Client risk management delivered $2.3 billion net revenue, up 9% with very strong ROAC reinforcing the quality of client-driven activity. We're closing 2025 with record results and entering the new year with strong momentum and a stronger underlying run rate than expected. We beat start of the year expectation on all core operating lines. We were able to take $1.4 billion in extraordinary charges, which together with our overlays of $1.7 billion that remain intact and our excess capital greater than $4.5 billion further protect and strengthen our future trajectory. From first quarter of this year, we will implement an intra-revenue restatement. Total gross and net revenues are unchanged. This has no material impact on the underlying gross trends of NII and fees plus net insurance. What changes is the presentation of our result aimed at improving comparability versus peers, transparency, and predictability. Specifically, we will move commodities interest margin from trading to NII. certain certificate costs from NII to trading, securitization costs from fees and NII to balances, and bank insurance negative indemnities from balances to fees. The managerial reclassification of hedging costs from trading to investment remains unchanged. We believe this will make for a more clear and homogeneous aggregation of the drivers of our P&L. Unicredit Unlimited is predicated on going beyond traditional boundaries. It is about disrupting, about innovating, and rethinking how we grow and operate. Unicredit Unlimited is built on two pillars. First, unlimited acceleration. We intend to gain quality market share and grow revenues profitably faster than our peers through quality NII and fees and net insurance. This is further supported by the capital-like growth of the net income of our equity investment. Second, unlimited transformation. In parallel, we are determined to reset our efficiency frontier, not from a standing start, but by leveraging our leading position, the experience we have gained in the last five years getting there, and the new AI and technology tools that are now available. During the next three years, we aim to grow our top line at 5 percent CAGR, with net NII plus fees and net insurance excluding Russia at above 5 percent. Importantly, the earnings of our equity investment, net of henshin cost, should more than offset the impact of our Russia compression and substantially exceed it on a net profit basis. To deliver our ambition on net NII plus fees and net insurance, we intend to grow market share in a targeted and profitable way, as we have done in the past. Quality first, capital light, and with higher value per client. We aim to go deeper with the clients we already have and win new primary relationship that matters, focused on private, affluent, SMEs, and the large corporates we are closer to. We aim to maintain our NII ROAC at around 20 percent through disciplined, targeted, profitable lending, not volume for the sake of volume. We aim to increase the weight of fees and net insurance on net revenue towards circa 38 percent over time, improving the quality, resiliency, profitability, and capital generation of our earnings. Our equity investment growth over time is capital light. Our unlimited acceleration stand on four mutually reinforcing pillars. First, our people. They remain the engine of our success, delivering impact through a shared vision and winning culture, combined with relentless execution. Second, our factories. We continue to strengthen the connectivity between our product factories and our distribution that closely interprets our clients' needs while expanding our offering, internalizing more of the value chain, and scaling innovative solutions across geographies. Third, our channels. We leverage a superior omnichannel model, physical, remote, and digital, with AI elevating speed, accuracy, and personalization. And fourth, our digital and data. We are accelerating AI adoption across client service and advisory, technology, and operation, using it to deepen relationship, improve efficiency, increase speed, and unlock new value. This is how we turn scale and innovation into sustained competitive advantage. We continue to invest in our people, engaging them in the definition of our strategy and objective, providing them with personal growth opportunities, fostering a culture of ownership, empowering them, developing them through a corporate university now focusing on deepening skills in digital and in AI. and continuing to hire to drive growth. Our people have been essential to our success so far, and they are essential to achieve our ambition. Our product factories combine into a powerful engine of capital light, scalable growth. We continue to enhance their strengths and deepen their connection to the front line, ensuring that every capability we build translates directly into fulfilling client needs and hence direct commercial impact. We're expanding our product offering so we can meet evolving client needs across Europe with greater breadth and precision. We aim to grow our share of wallet in the right segment and geographies while improving cross-selling for international clients, leveraging our pan-European footprint. We will continue to internalize more of the value chain across key products. This allows us to retain more value, control quality end-to-end, and deliver an offering that few competitors can match. And we're embedding digital solutions across the entire platform. DealSync, SmartFactor, TradeFinanceGate, for example. We're turning innovation into a tangible uplift in client experience, revenue, and efficiency. Let's take a first example, investment. This model is already delivering. In asset management, we're transforming the role that a distributor can play by gradually capturing more of a value chain, internalizing the blocks in which we can add the greatest value. As such, we have created a new benchmark for what is possible in asset management, and we are not done. Our distinctive asset management platform, holding a leading market share across 13 plus 1 countries, now ranging from proprietary asset management to value-adding selection and repackaging of third-party mutual funds to proprietary capital-protected certificate and to unit-linked, in which we command a leadership in Italy with a 30% market share. Our one-market funds have grown from zero to more than $30 billion in three years, and we aim to more than double that amount by 2028 and triple it by 2030. At the same time, our internal value retention has increased from around 60 percent to above 80, and we target beyond 85 percent by 2028 on an increasing base. This transformation improves clients' experience and returns as it gives us full control and materially strengthens the economics of our business. And we are applying the same successful formula across other factories, including insurance, client risk management, and even payment, using internalization, innovation, and scale to create even more value. Our omnichallenge setup is one of our strong competitive advantages. We combine physical branches, remote AI, and people-supported advisory with digital platform into a single, seamless client experience. AI is enhancing every touchpoint, improving speed, accuracy, and personalization. Clients choose where, when, and how they interact with us, and we adapt. Our network includes 3,000-plus branches focused on high-value, personalized interaction. Unicredit Direct, providing flexible and tailored remote advisory. Digital and hybrid channels, key access point for every interaction of our client. This is an omnichannel model built for today's expectation while we develop tomorrow's opportunity. A case in point. Buddy is a tangible example that is transforming our client access, advisory, and banking services, and its innovative model is setting a new blueprint. It is more than a digital channel. It is a fully-fledged remote branch that offers clients a full product and service catalog digitally. with 24-7 access to AI or people-based support. It is seamlessly integrated with the rest of the branch network and channels and offer the tailored experience at a lower cost to serve. It has already reached 800,000 clients by the end of last year, with a trajectory towards 2 million by 2028, and we expect it to continue to grow at an accelerated pace after that. The buddy model is ready to be exported across all our 13 countries and beyond. Please do come and try it. We have several other pilots at different stages of development being experimented across the group in Poland, in Croatia, in Bulgaria, for example, but if successful, will be rolled out more broadly. We aim to be at the forefront of what can be achieved using technology, data, and AI in our sector. Their rollout is underpinning the improvement in client experience and productivity that supports our targeted gains in market share and ultimately the quality growth of our core revenue. We follow a clear ROI-driven approach, combining group-wide critical process-by-process redesign with a bottom-up use case development to maximize impact. We have unified our data and AI platform, enabling control and ability to scale custom solutions. Our AI platform already ensures approximately 35% lower time to delivery and 30% lower IT cost. We have multiple AI-driven solutions already in place, such as Uniask and DealSync, already driving tangible results. And we're just beginning. We're in the process of leveraging AI to reshape client engagement through AI-powered survey channels, next-generation virtual assistants, predictive analytics for tailored solutions, and smart recommendations for advisors. At the same time, We aim to further empower our people by giving them upgraded tools to enhance the quality of their work and their productivity while streamlining and automating manual processes. DealSync is a case-in-point example. DealSync is a tangible example of how technology and AI transform the service we can provide to clients, in this case, mostly SMEs. It is an AI-powered platform focused on matching and introducing SMEs among themselves and with investors and advisors that would otherwise not happen given their fragmentation. DealSync reduces marginal cost, expands access to capital markets, and creates new business opportunities for clients and for Unicredit. Already live across all Unicredit major markets, it has been recognized as an ABI innovation winner in 2025 and has already captured a market of over 4,000 SME deals opportunities since its launch one and a half years ago. We see digital asset as a structural shift, and we're moving decisively across asset tokenization and digital money, pioneering in many areas. On tokenization, we have completed two proof-of-concept initiatives in minibonds and structure notes showing how tokenization can simplify issuance, cut cost, and accelerate execution for clients. On digital money, we are a founding member of Kivalis, the European strategic systemic alternative to U.S. dollar-denominated stablecoins. We are also actively looking at other on-chain settlement instruments, as demonstrated by our participation in the ECB-led Pontes initiative. All of this positions us as an early leader in real-world asset tokenization and reflects tangible progress in a space where there is often far more hype than real execution. Our ambition is clear, to become Europe's reference point for tokenization, executed with a focused strategy and a defined roadmap. In the crypto space, our approach is more careful and neutral. We are offering interested clients access to public ETPs with underlying crypto with clear disclosure to inform on volatility and risks. We have also pioneered capital protector certificate with underlying cryptocurrencies, an innovative product that mitigates the downside risk of the asset class. The second pillar of Unicredit Unlimited is unlimited transformation. We're aiming to reset the sector efficiency frontier once again. Starting from a position of strengths, best in class capital and operational efficiency, with Unlimited, we shift gears again. We move from improvement within existing boundaries to transcending those boundaries, reinventing ourselves and using new technologies and AI to support that step. On capital efficiency, we aim to further increase our net revenue to RWA to 8.6% and move beyond that by 2030. On operational efficiency, we aim to decrease the cost base by 1% per year to around $9.2 billion in 2028, confident we will maintain that trajectory towards 2030 and beyond. We will do so while supporting growth and investing, staying at the forefront in the future as we have done in each of the last five years. We continue to sharpen our capital efficiency as we remain focused on growing NII while maintaining a 20% ROAC. and increase the weight of capital-light revenues, including the growth of the contribution from our equity investment in Commerce Bank and Alpha net of hedges. We will continue to execute securitization above the cost of equity, enhancing capital velocity and reinforcing the quality of our lending book. In practice, this means deploying capital only when return justified redirecting it to the right geographies, the right clients, and the right products, and maintaining our leadership in profitability, growth, and distribution. Over the past five years, we simplified and streamlined our bank, proving that even a large multi-country institution in Europe can become sharper, faster, and more efficient. That was a critical part of Unicredit Unlocked. It was about fixing what was inherited and building a model capable of outperforming peers. The next phase is fundamentally different. Unicredit Unlimited is not about incremental improvement. It is about rethinking the operating model at its core, and the key enablers of the ships are technology and AI. They allow us to go far beyond what manual processes or traditional structure can achieve. We are automating at scale, embedding AI into every critical workflow, accelerating execution across risk, compliance, finance, operation, and HR, removing friction, and eliminating repetitive tasks. With these tools, we can redirect capacity towards high value activities, faster, critical decision making, key value added steps in technology and operation, deeper client engagement, delivering stronger commercial impact. Value activities are how we reset the industry operation frontier. This isn't simply about efficiency, but about thriving in a competitive environment that is rapidly shifting, having the courage to lead the change of how the work itself is done. Vodeno is our next generation proprietary core banking platform, a cloud native modular infrastructure that accelerates implementation, improves flexibility, and reduce dependency on third party systems. It provides enhanced internal technical expertise powered by more than 200 specialists across engineering, technology, and data and AI. A sandbox to test entry in new market and segments, validating new features and products. A foundation to scale embedded finance and banking as a service. It enables us to deliver a faster and lower cost to implement and cost to serve. And once validated, solution can be expanded across group at speed. Over the last five years, with Unicredit unlocked, we have organically transformed this bank, driving the best total shareholder returns in the industry. With Unicredit Unlimited, we face an even more exciting and ambitious proposition that should result again in best-in-class total shareholder returns. Both Unlocked and Unlimited not only deliver for our shareholders, but greatly motivate our management and broader team alike. As such, M&A remains not a necessity, but an accelerator. executed only under our strict terms and only when it creates incremental value for our shareholders. We only execute when there is a clear strategic fit and the returns are superior to our share by backs. Our discipline has already been proven. That said, we do retain unique optionality across two strategic stake and 13 markets. Our winning proposition, strong momentum and forward-looking strategy, with its related granular, simple levers to execute it, leads to our ambition for Unicredit Unlimited. We aim to deliver, once again, the best combination of net profit growth at leading return on tangible equity and distributions within the European banking sector, supported by a dynamic, higher quality top line and a lower cost base, all resulting in achieving a decade of unmatched performance. We continue to believe that guiding our net revenue is more aligned on how we manage the business, as the combination of NII, net of the related LNPs, and fees and net insurance are interconnected in multiple ways and cannot be seen separately. All numbers that I will go through now are post the restatements I just described earlier. We aim to grow. net revenue at a 5% compounded annual growth rate, reaching sound 27.5% by 2028 and directly exceeding 29 billion by 2030 and beyond. In terms of gross levers, we aim to accelerate core revenues, net of LLPs, at 4% CAGR while absorbing Russia compression, 5% CAGR without it. Benefit from the contribution of our Commerce Bank and Alpha Investment Gross net of hedges that shall reach 1 billion by 28 and more than compensate Russia. Cost of risk should remain stable at 15 to 20 basis points. Overlay shall be used as required to support that expectation. we aim to reduce our costs by circa 1% per year net of investment and other headwinds to around 9.2 billion by 28 and below 9 billion by 2030, leading to a cost income ratio of circa 33% in 2028 and below 30 by 2030. As such, we aim to increase our net profit by 7% per year to circa 13 billion in 28 increasing our ROTE to above 23%. Such trajectory is directionally set to continue towards 2030 and beyond. As a reminder, we can rely on a combination of substantial unique buffers to defend that performance. 1.7 billion of overlays, more than 4.5 billion of excess capital, 1.4 billion front-loaded external recharges, 1 billion additional revenue from equity investment that are fully distributable. Our trajectory is underpinned by quality, profitable growth, operational excellence, and capital excellence. On the top line, we aim to grow more than the peer group, both in absolute term and in quality, with a stable and controlled cost of risk. On cost, we aim to reset the efficiency frontier, shifting transformation from simplification to reinvention. On capital, we aim to deliver the best combination of profitable NII and rising capital-light revenues. all while maintaining one of the strongest balance sheets in Europe. Together, this will result in EPS growth and return on tangible equity at the top of the peer group. Our distribution policy reflects our confidence in the sustainability and quality of our earnings. We confirm 80% ordinary distribution split between 50% dividend, 30% share buyback. The mechanical result is cumulative distribution of circa 30 billion over the next three years and 50 billion over the next five. This equates to a best-in-class distribution yield before considering any deployment or return of our more than 4.5 billion of excess capital evaluated yearly. The numbers above do not include the nine and a half billion of planned distribution for 2025. When you bring it all together, gross, efficiency, profitability, capital generation, and distribution, Unicredit stands apart. We deliver the best combination of return on tangible equity, EPS growth, and distribution yield among major European banks. Performance of this magnitude should be reflected in the premium valuation, providing further relative upside going forward. To conclude, Unicredit Unlocked transformed our bank, proving what disciplined execution, empowered, motivated people, and a unified operating model can achieve. Our performance confirms the effectiveness of our model, resilient, diversified, efficient, and relentlessly focused on value creation. We have delivered another record year with 20 consecutive quarters of quality profitable growth, and we're entering 2026 with an unmatched momentum. We now shift decisively from unlocked to unlimited, a new phase defined by greater ambition and a fundamental rethinking of how a European bank should operate. Unicredit Unlimited is designed to transcend legacy boundaries, pushing beyond traditional banking limits through disruptive change supported by technology and AI and continued convergence of our operating model. Our people remain the linchpin of getting us there. Our superior equity story speaks for itself. Market leading growth at best in class return on tangible equity and an unmatched distribution trajectory all achieved within Europe. We have M&A optionality that others do not and we will continue to exercise the same discipline. This bank was transformed once with Unicredit Unlocked, and we are determined to do it again with Unicredit Unlimited, delivering a decade of outperformance. Thank you very much, and we'll open to questions.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and 2. Anyone who has a question may press star and 1 at this time. In the interest of time, we ask that you please limit yourself to two questions and one quick clarification point per caller. We will pause for a moment as callers join the queue. The first question is from Ignacio Ulargui, BMP Paribas. Please go ahead.

for taking the questions. I will just make one in the interest of time. So, I mean, if I just look to the plan, I think one of the biggest changes is the loan growth that has been changing throughout the last couple of months. I just wanted to get a bit of sense of how that 5% growth will be distributed between regions and products. Andrea, you made a couple of comments about the most profitable segment. I just wanted to get a bit of a sense on how those mortgages SME and consumer interact on that basis. And also linked to that, what has changed really for the bank to move towards that stronger organic growth ambition? Thank you.

Okay, so I'll start with what has changed and then I'll move to loan growth and I'll pass it to Stefano. So what has changed? The momentum we see in our business, we closed 2024, indicating that we were shifting gear and moving to accelerating growth. During 2025, if you take away all the noise, we saw that crystallizing and crystallizing better than we expected. And therefore, that gave us more confidence. As we moved into the second part of the year and in the first quarter, we see a momentum on all of our operating indicators and AI, fees and net insurance cost to be better than we expected and strong. And that has given us the confidence on, let's say, doubling down on the acceleration of the top line. The second thing is during the course of 25, like many others, but especially ramping up into the end of the year, we have not only continued to look at how we could continue to improve ourselves, through change, through transforming the way we operate, but increasingly adopting AI and accelerating the move on new technologies into the bank. And this is just a question of acceleration. And as we did that, we witnessed that the time to achieve those improvement of that transformation was significantly faster, the impact greater, and therefore that we could apply what the team has been executing in terms of transformation over the last five years, but now we could attach it to tools that make the leap much greater on the same basis. So fundamentally, the entire processes that we would before redesign, much more efficient, now we can redesign them and totally convert them AI-based, and the leap is materially greater. So these two things occurred. This is combined with a realization, at least of mine and the management team, that we can no longer focus on competing among legacy banks. fintechs and hyperscalers are reality. They are entering Europe strongly in every market, and we need to have the ambition to transform a lot more to catch up on the operating side in order to reach 2030 as a bank or as an institution that can compete successfully not only with legacy banks, but also with fintechs and hyperscalers. And therefore, all of this together has given us the motivation, the tools, the drive, and we've been doing that for four years. We are putting it forward. So it's just a stepping up and a doubling down on the acceleration of the top line and on the transformation of our model. With respect to loan growth and growth in general, As you have seen, every single market region country in which we are, We are seeing a material improvement of momentum across loan volumes, across NII, and this is very important. We have succeeded to date and intend to continue to succeed to, yes, step up our growth, yes, take market share, but defend margins. This has been a constant for us. and it's not a constant that is going away. I keep on repeating that a billion of loan growth is worth a third of one basis points of decline in margin, and therefore going for volume and not margin is not a value-enhancing proposition. So we've seen that. And what is happening out there is that we have been very clear, and we've already done that increasingly in the last five years, but especially in the last two, we're targeting growth. In the same way we're targeting efficiency across the chain, we're targeting growth. Where are we targeting? In markets where we think the margins are better, our geography. So, for example, Central and Eastern Europe provides excellent opportunity to grow fast, at margins that are sustainable with a high profitability, we're doubling down on that. But even within countries, there are regions within Italy that grow faster than others, we're doubling down in those regions relative to others. We always try to sustain our margins, our return on tangible equity of that, and that is very important. Secondly, client segments. Client segments are not equal. The margins the profitability of large corporate, of medium corporate, of small corporates, of micro businesses, of private, affluent, and mass are not equal. And we are privileged to have 60% of our revenues already skewed in the, in inverted commas, most attractive segments of SME, including micro, affluent and private. We want to increase that, and in many of those segments, the competition is fragmented and fractured, especially the more fragmented segment, like small and micro businesses, and it allows us to gain shares in segments that are naturally higher margin, but with a competition that is less pressing. To do that is not as simple as saying, I'll do that. You need to have accredited models, which we have prepared for the last two and a half years. You need to have the people trained, which we have been hiring on the front end or recycling our own people to the front end for the last three years. You need to have the IT platform to be able to support them. You need to have the AI to personalize what we are offering. You need to have all of these things prepared to address them. We do. Then you have the products. And in the products, again, the margins on a mortgage in Italy, for example, are nowhere close to the margin. And all of this is net of cost of risk on a consumer loan. We have been saying for now four years that our focus is on margin, not volume, so we would take the volume hits in mortgages, not because we don't offer them, we do, but because we don't drive them. Well, we wanted to gain leadership in consumer credit, which is a critical pillar of supporting families in their spending. We now are a leader in consumer lending. Our cost of risk is below everybody else's, and the margin are multiple times what we would get in mortgage, and certainly multiple times above the cost of equity. We will continue to do that. Some competitors have noticed and are trying to imitate. Good luck. You need the models. You need the platforms. You need the people. You need the training. And you need to know how to do it. We've learned very well in the last four years. And this is a DNA of Unicredit that comes from the early 2000s. So we have it. Not many people do. That's an example in lending. But when you look at investment, it's the same thing. A money market funds does not have the same margin as a capital guaranteed certificate, as a unit linked, as a wrapped mutual fund on the one markets. They address different client needs. And if I may, as we discussed, the performance that I always get as an answer in fees and I have not been able to convey that it is connected because what has a higher margin, a current account, a zero remuneration, or a money market funds? I let you decide on the answer. And hence, we have massively outperformed in NII and its margin this year. and performed in line on volumes of fees. But all in all, we are ahead. And so we treat everything we do crossing geographies, clients, and products in this way. And we have developed platforms and factories that are now truly best in class, more modern, more AI-based, more dynamic in the responsiveness. But I'll pass to Stefan on the numbers for the loan growth, et cetera.

Yes, so products, retail, reiterated focus on consumer financing, as said Andrea, in relative terms, and this is for geographies like Italy, Central and Eastern Europe and Austria. On mortgages, lower loan growth in comparison to consumer financing in relative terms in the next three years. with a differentiated growth between Germany, Austria, and C in comparison to Italy for the reason highlighted by Andrea. Segments, more focus on getting market share in small business and small enterprises. However, we are expecting a higher growth than the past in the mid and large corporate segments, especially in Italy and in Germany. With regards to the geographical areas, let's start from the GDP assumptions, because that's very important for us. So our assumption in terms of GDP, considering our footprint, are for an higher GDP than the Eurozone one, so around 1.2% for 26%, increasing to around 1.7%, 1.8% for 27% and 28%. with an average inflation that is slightly higher than 2%. What I'm saying to you is this, because what we are expecting in light of the commercial action that we will put in place is a growth rate for the lending in line with the nominal GDP rate in C and in Austria, while higher than the nominal GDP rate in Italy and Germany.

Thank you very much.

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

Hi, thank you very much. Yeah, so a couple questions. One on OPEX target, which optically seems aggressive, but you talked a lot about the impact of technology on that. I was just wondering if you could give a bit more color, but on integration charges, if you have to book everything in the later years, and how do you expect the staff costs to evolve versus other admin and DNA? to reach that top X target. And then the question on the hedging, you're booking the one-off hedging costs in Q4. What does that mean exactly for the commerce and alpha hedges? Are you extending the hedges for longer? And also, should we continue to assume that these recurring hedging costs for those stakes are around 350 million a year? Thank you.

Yes, so in relation to OPEC's target and evolution of costs over time, let's start from 2025. So in 2025, if we're excluding change of the perimeter, the costs were down around 1.8%, both on an HR cost and non-HR cost. On the non-HR costs, we have been able, fundamentally via the reduction of the real estate costs, to more than compensate the increase of costs in IT and marketing. When we look to the future, the trend of costs will be driven by the reduction of the HR costs, so the average number of OFTs of the group will go down during the course of the next three years, and the connected HR costs. While in relation to the non-HR costs, while we will keep on focusing on further optimizing the real estate costs that are expected to go down, the other administrative expenses, especially the IT one, are not expected to go down, so are expected to be higher in light of the plan initiative that we have from an IT investment standpoint concerning all the specific actions that we have discussed before. In relation to the edging, we have lengthened the duration of our edging in Q4. It's a dynamic edging, so what we are expecting is to do that over the course of the next years as well. You need to expect a recurring cost of edging, so in our ambition we are including an in the contribution from the investment that Andrea commented before, the hedging costs are included and we are expecting to have an average hedging cost in the next three years of around 500 million per year with a lower cost in 2026 for the action that we have taken and a progressive higher cost for 2027 and 2028.

The next question is from Sophie Petersens, Goldman Sachs. Please go ahead.

Yeah, hi. Here is Sophie from Goldman Sachs. Thanks a lot for taking my question. So just going back to one of the first questions, and also at the start of the call, you said that the unlimited strategy is kind of fundamentally reimagining what the bank looks like in the next three to five years. Could you elaborate a little bit more on how you see the banking environment transforming in Europe over the next three to five years? How do you see the fintechs and hyperscalers entering the market? How do you see competition from these banks increasing? And how do you see the larger and smaller European banks performing in such an environment. And then the second question would be on M&A. I know you made quite a few comments throughout the presentation that you have the M&A optionality, but how should we think about M&A in the revenue guidance and what that could potentially mean? in terms of upside risk, and also if you could comment on your relationship with that generally. Thank you.

Okay.

So, let me start with the transformation, et cetera. So, I just think that it is, if you look at how we looked at the sector in 2020, exiting COVID, There were legacy banks that were getting back on their feet. There were various fintechs. There were hyperscalers. There was a relatively limited amount of competition. Over the last five years, it changed dramatically. First of all, if you take fintechs, a number of names come to mind. they are now not only curiosity, they are reality in many markets. Now, they tend to have lots of clients but few primary clients, but they are reality and they're growing fast and they're learning. If you take hyperscalers on what they offer clients in terms of financial services, it's the same. I would add to that that We now see, for example, US Bank entering quite aggressively in some of the European Union markets and non-European Union markets, leveraging the higher spending technology, leveraging the relative regulation, et cetera, to gain share in the places where it hurts. So I don't think, or I'm actually convinced that if you look at it five years from now, you don't have these, as we like to play with them, balkanized competitive environment with legacy bank on one side, fintech on another, hyperscaler on another, foreign banks on another. You have one. And clients are going to look at one. And you need to look at those competitors and say, what am I missing? I think in general, legacy banks are much better on trust, are much better on quality, on primary clients, are much better on multiple complex product and solution, are much better at human touch. They are much worse on all the operational setup behind, on the client experience and on the service. But the flip side is that, for example, fintechs and hyperscaler has exactly the opposite problem. They need to converge where we are on the client side and on the front end. We need to converge where they are. So if you look at transformation, you need to look at a situation where we defend the front end, the primary clients, the product, and everything else, providing our people with the tools, AI, technology, to improve a service. Otherwise, the clients will walk away. On the other hand, we need as an urgency to become much more efficient, much faster, much more dynamic than we are on our operating machine. I'll give you one order of magnitude. If you took us in Europe, in Italy in 2020, we probably were loosely defined about 50% of our people were at the front and 50% of our people were at the back. If you look at it three years from now, probably the back will be 25 and the front will be 75. So there is a massive recycling of skill set and of our colleagues from back to front as we render the entire machine much more automated, AI driven, et cetera, et cetera. But there is also more tool at the front to allow them to provide a better service to client. I honestly do not think that if you have that, clients would prefer to be 100% serviced by a chatbot rather than a human being. So I don't think this is the deaths of human being. I think this is a huge opportunity for legacy banks to take back the baton. So in that, this is what is inspiring everything we're doing internally. Every process is reviewed. The organization is reviewed. The way of working is reviewed. Nothing is sacred. And if we can do it faster, cheaper, better, without taking on the risk, we go for it. And I think that this bank demonstrates that we like to take those decisions, and we do thrive in change, and we're going to demonstrate that over the next five years. With respect to M&A, I think I mention it because it is a question I get all the time. I always hope that if I say it, I don't get any questions on it. But what I would say on M&A is Europe needs bigger banks. We're dwarfs vis-à-vis the U.S. and the other economic blocs. Also, bigger banks are necessary to fund the transformation that the European Union needs to undertake. Where is the money coming from? The gasoline comes from two places and two places only. Capital markets, we don't have them. And banks, we're dwarfs. So Europe needs that to fund all the ambition that we have. Point number one. Point number two, M&A done at the right terms and the right strategic fits can add significant value. It is usually, and I have done 35 years of that, no replacement for a bad strategy, a bad plan, and a bad execution on an organic basis. We have a great strategy, a great plan, and a great execution on an organic basis. We don't need to do it. Look at the net profit growth and at the distribution. We are privileged. We have more , we look at it. We will look at it in the same discipline fashion. As I said, we moved a little bit, as I was told to be too conservative, and we look to beat the share by back return. plus a margin and not 15% return on investment anymore to align to where the cost of equity for European banks have gone. But nothing changes. What is in our earnings? In our earnings there is zero deployment or return of excess capital and therefore zero acquisition. Obviously, very small bolt-on should be put in a stride on the circle of the numbers that we're giving you, but anything more significant should be added. I think in Central and Eastern Europe, you look at bolt-on that usually go from anywhere between 500 million and a billion and a half, so those are relevant for the excess capital. In larger markets, our three larger markets. They are not relevant for excess capital because anything that we would do there would require a capital raise and would need to be very well benchmarked against does that derail our plan, does that defocus our people or not, and secondly, do the return justified? And this is what we do. With respect to Generali, I think we speak to Generali regularly. They are one of our industrial partners. People forget that they provide most of our bank insurance products in Central and Eastern Europe. We distribute their asset management products within our network, so of course we talk to them. The rest is a little bit fantasies of people who need to create stories, but there is nothing else on that topic, not that I know of at this point. Thank you.

The next question is from Rita Schmidt, Autonomous Research. Please go ahead.

Yeah, good morning. Thank you for taking my questions. On the capital trajectory, I mean, previously you've guided or given us some sort of indication of what organic capital growth per annum can be in the plan. Could you maybe give us some thoughts on that, now that your volume target is more ambitious, and tell us what the RWA growth is that is in line, that is aligned with this plan? And then how do you think about the largest execution risks of this plan? Is it a weaker macro? Is it perhaps a risk that the cost benefit might be competed away and the AI benefit may be competed away or also the timing of AI deployment and regulation around that? Thank you.

Maybe I'll take the second and then I'll pass to Stefan of the first one. So the execution risk is obviously always a question of grades, but I think weaker macro affects us, but if you look at what has happened in the last five years, I don't think that is that significant. Obviously, within reason. But I think what would affect banks is, number one, if competition steps up at unreasonable levels and people to just grab volume to try and deliver growth that they otherwise don't have, stop dropping margin and become not realistic. Yes, possible. I see it difficult, particularly in this environment and particularly given the capital that people have in Europe to deploy in value destruction volumes. So I think the risk exists but is limited. Secondly, I think regulation is at the moment quite clear where it's going. It is still tightening. but it is fully embedded in the plan. I would have hoped that it stops tightening, given that we are where we are. But regardless, it is fully embedded in our plan, what we know today. I think the rest is the ability of our organization to not only continue to change as we have in the last five years, but step up that change. I'm very confident of what the team can do here. but the degree of change that one, you need to fathom taking a step back and looking at what is possible with modern technology and AI, and B, the decision that you need to take that completely disrupt the things that you're doing and how you have been accustomed to do them for a long time is tough. I think this team is uniquely positioned to do that, and there are a lot of indications that they are, but it is tough. And finally, we always talk about all this, but let's be very clear. For Unicredit, this cannot be done without taking control and dealing with the social impact. We have invested a lot in our university. It gave more than one million and a half of hours last year to our people. This should be stepped up and almost doubled as we bring people along and we upskill, reskill, and move them. But the disruption is there, and I think One thing is an Excel spreadsheet, another thing is doing this to people. So I think the organization needs to be given the time to absorb and do that recycling in a correct way. So these things, if you look at the numbers on the plan, we use a lot of circa, and we leave a lot of circa because if I take a spreadsheet and I look at all the things that we have identified that we can do better, Britta, I mean, the numbers are a lot better. But, time. how adoption, recycling, dealing with a social impact is going to delay, and correctly so, the implementation of what we do. And I cannot judge yet, and I do think that most CEOs cannot judge that, because a lot of these changes are new and we're not accustomed to dealing with them. So on the one hand, you want to accelerate, But then you immediately see the consequences and need to adjust for the consequences and manage them. So that, for me, that speed, we will see this year and next year. That would adjust the plan one way or the other. But at the moment, we are quite confident in the numbers we are aspiring to get, and they remain what they are. I'll pass you one second to Stefano.

organic capital generation we're expecting to have an organic capital generation at least equal to 80 percent of the net profit in the plan in order to support the distribution that we have communicated net profit you have the assumption risk weighted assets so we're expecting to have Long growth, and as a consequence of that, growth of the risk-weighted asset, let's say an average in the plan more than 10 billion per year. However, more than 10 billion capital efficiency actions per year, right? So that's why we are confident on the organic capital generation trend. Having said that, we do expect some effect that you need to take into consideration that will bring up the risk-weighted asset that are one, operational risk-resquited asset, the more we go up with the revenues, and we're expecting to go up with the revenues, the more we have risk-resquited assets, so around six billion in the next three years is important for you to take that into consideration. And then when we do the Danish compromise, you have the benefit from that, but that will increase the risk-resquited asset once we will do the Danish compromise, and it is around the six billion, okay? Then we have some model changes and regulatory impact. The Basel 4.1 are not material, let's say around 3 billion. Then it will depend on the fundamental review of the trading book in terms of also timing of that. But we are expecting also around, over the plan, around 10 billion of risk-weighted assets that have been from model changes. Everything taken into consideration. There is credit assets that are going to be higher already in 2026. We're expecting something more than $310 billion already during the course of 2026. Everything is factored in in our organic capital generation and distribution trajectory.

Thank you.

The next question is from Andrea Filtri, Mediobanca. Please go ahead.

Thank you for taking my question and I link to Britta's question. I calculate abundant generation of excess capital over the next years. Do you agree that growth at this point supersedes capital return as ROI or share buybacks is lower than organic profitability and most M&A transactions? Second question, as you look into 2030, How are you approaching the adoption of the digital euro, and how can you make it into an advantage for Unicredit? Finally, a clarification. You indicate a delay in the Danish compromise approval. Why is it taking so long versus prior similar cases? Thank you.

Robert Nussbaum- Okay, so excess capital and everything else.

I do believe that there has been, coming out of already 24 and now increasingly 26 to 30, one needs to combine, and our strategy is exactly doing that, profitable growth with distributions. We strongly believe that we've moved from maximizing the distribution to shareholders which by way we pioneered, into keep those distributions at what is still a very high level, because let's call them what they are, they are outsized, but trying to capture market share and growth opportunity in the outside world, because over time, an organization that does not grow for a long period of time dies. So we think there is plenty of opportunities in the market where they are for us to grow market share, but plenty of opportunities across client segment, across products. Every opportunity that we have to deploy capital profitably, we believe, will then mechanically enhance distribution going forward because we are committed to an ordinary, not total, ordinary distribution payout of 80%. So the more I grow, the more profitably, the more I have net profit, the more I distribute, as opposed to grow less, have lower net profit, and top up with excess capital. I think we've moved from that, and I think it's a lot more sustainable to have profitable growth at high Rote generate more ordinary distribution and deploy the capital to get there, and the returns, as you have indicated, Andrea, I agree with you, for now, they are much better than purely share by backs. The reason we are keeping share by backs in there is because I think it's a question of discipline. We need to be disciplined to return to our investors and to our shareholders what we don't use. So either we are good enough to use it at a profitability level that is above the one of the share we're back, or we owe the money back to them. And therefore, we will continue to do that. But if you like, psychologically, the emphasis is on profitable growth while maintaining this high level of distribution at 80% that we have achieved. rather than trying to maximize returns at decreasing returns for our shareholders. So this is what I would look at. The second thing, adoption of digital real. I would take a broader context, Andrea, and I know you have been discussed a lot about that. My broader context is, There are a lot of things changing in the digital assets, from digital assets to digital, to stablecoin, to digital euro, to all the blockchain supporting it, to the a settlement part with the European Central Bank, Pontes, which then will evolve further into something more blockchain-driven. We need to be central to that. We need to address that. So we recognize we are at the beginning, but we are leading most of the initiatives in Europe. across stablecoin, across tokenization of assets, across what the digital euro should look like and what it should do in order to disrupt, to not disrupt but help, and across also crypto, not because we necessarily want to push it, but if we have clients that want it, with the appropriate warning, we need to also respect that wish. I think this is very important. We talk a lot about sovereignty and the digital euro. Let me leave you with one concept that we have at Unicredit. What about the sovereignty on stablecoin? If you go to Asia, all settlements are on stablecoin, denominated in dollar. If you were to step up on tokenization of assets in Europe, all set on stablecoin denominated in dollar. So even before the digital euro, I see more a retail-directed thing at the moment. On all the corporate segments, we need euro-denominated stablecoin. This is what Kivalis is trying to do, and we're going to start deploying or rolling out in September of this year. With the Danish compromise approval, I think I will give you a broader answer because I am not controlling who should give that approval. I think given the fact that in the last year and a half maybe, year, year and a half, the Danish compromise has been used in increasing cases, and the perimeter that it has been applied to has been used in cases that, in my opinion, the regulator did not anticipate it would be used into, but then needed to go back and look at the regulation and look at everything that goes with it. There has been an attempt, and we're not the only bank that is waiting. There are three hours in the queue. We have the most significant. There has been an attempt to look at the entire framework and make sure the process that is followed and what the framework allows or not allows is well clear and justified for everybody. That is done now. So we have cleared that stage end of last year and we are told that it is only from now that the actual end of a stage, the actual physical Danish compromise is going to be evaluated so the clock in inverted commas started later because of all of that. I think futures will probably benefit from this framework, and it will be going back to being a little bit faster, but this is what we understand is the case.

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

Good morning, and thank you for taking my questions. The 2028 net revenue target is 3.6 billion higher than 2025. Could you please break down the absolute increase in NAI fees and investment post-restatement? And then I have a question on alpha. You both have been talking about the synergies that you can achieve with the current setup, so if possible, Could you please elaborate on the strategic and industrial pros and cons of a full takeover instead of the current set up, unless you would dismiss such scenario to cool? Thank you very much.

Okay, let me start with two things and then Stefano will complete. Firstly, I think some of you have asked how ambitious, how not ambitious, how many moving parts, et cetera, et cetera. Noemi, we believe that slicing and dicing, as is done on guidance, contrasts with the business, and we will no longer break down in any indication, aspiration, guidance, NII, from fees and net insurance. The reason we do that is because if you look at 2025, we guided at the beginning of the year that we would have an NII declining 7.5% to 8%. We finished the year at 5%. That was in large part due to great work by our people in managing the pass-through. As they managed the pass-through and they reduced the decline to circa 5%, they obviously had less growth in fees from investments because less market funds, less other things like that. In the same way as we had been pushing the last few years fees from investment, we reduced the growth and lost some market share in unit linked. These things are all connected. I push more capital guaranteed products, I have less asset management, I have different NII. The breaking of that down, which I know what they are, but prevents the network and the empowerment of our people in every single bank because it forced them into bracket and when the macro of the opportunity changes, there is immediately a worry that if they move on what is right, they're gonna miss consensus on one subset or other And therefore, you delay the right decision. And because we believe in empowerment, we'll keep them aggregated like that going forward, at least in terms of guidance. Obviously, when we report results, we will give you the numbers and we will explain why they are what they are. With respect to Alpha, I think Alpha has been a fantastic accident for me. I used to not believe in anything that was we're going to do a joint venture, we're going to do a partnership, et cetera, et cetera. In the past, one of my ex-CEOs was saying that the joint venture partnership were same bad different dreams and never ended up well. This is totally the opposite with Alpha. We started to help Alpha complete its privatization. and because we thought that the investment was worth it, obviously, and to support what we did in Romania. Since then, we stepped that up. The level of cooperation and the level of dialogue that we have between our factories here in Milan and Alfa is in certain cases greater than what we have with banks we own 100% of. There is a total embracing The two teams work extremely well together. There is a very good crystallization of the value we bring to them and the value they bring to us. And this is driving, not on my level or at the level of the executive board, but at the level of the operating team, a constant request and adjustment for new opportunities to cooperate among things. So there is no way, if I combine that with the positiveness with which not only Alpha but the entire Greece has welcomed us, that we are going to upset that in any way and anything we would do with them is only if both sides felt that there were more value to be created and better value to be created. And we are not at all stressing because the value that we are creating is quite high already. It also demonstrated that given the framework we have generated in our federal group, we can add significant value cross-border in a market where we're not. because we're not in Greece, and all the value that we're creating has nothing to do with a merger or anything else. That is inspiring us from other thing that we're doing. Now, obviously, in an integration, there are a number of other things that you can do that you cannot do in a partnership. There are substantial, let's call them cost advantages, in our procurement contracts, in our cost of IT, in our cost of AI because of our scale and where we are. There are other advantages, especially in the operating machine. There is the blueprint that we believe we have in, especially in retail. The advantages that we see in Alpha in corporate, there are a lot of things that at the moment we're trying to maximize without a merger, so it's a soft association. We are happy. There is something more that obviously only a merger can give, but it is certainly not something that we want to do. upsetting the current state of play. So we are very happy as partners. So for the time being, this is as it is. As you know, the alpha stakes does not absorb much capital, actually marginal, but it does deliver a lot of returns, not only through the consolidation, but also through the fees we book. And I'll leave you, maybe I'll leave Stefano comment on that. So I think, I know that everybody wants a process and a timeline and when we are going to do it. We may not do it ever and be very well connected one way or the other, or we may do it at some point because both sides feel it's the best for their people and their shareholders, but there is no plan whatsoever on it and it has never been discussed.

So first question, reclassification as a letter by Andrea specifically before. So the reclassification that we start doing from Q1 is neutral from the revenue standpoint. It's positive for net interest income 700. It's positive for fear around 100 million more. It's negative for the trade in 700. And it's negative for the balance around 200 million. Specifically in relation to the balance, do consider that there are the securitization costs. i.e. in the next three years, do consider that the sum of trading and balance will go down because we will have more cost for securitization for the reason that I told you before. So we will keep on executing important capital efficiency action, including securitization, so this will affect balance and the sum of trading and balance accordingly is assumed to go down during the course of the next three years. The other two important components are the net interest income plus fee and net insurance. If you are excluding Russia, what you are expecting is a compound growth rate in the next three years of more than five. And then you need to consider, as already commented before, that the contribution from the investment net of edge will more than offset Russia compression. However, the Russia compression on the top line, especially in 2026, will be material. In relation to alpha, the sum of what we're getting in terms of dividend equity contribution plus the business that we do, considering the capital absorption that we have, is bringing a return on equity capital that is over 15.

The next question is from Andrew Coombs, City. Please go ahead.

Good morning. Thank you for taking my questions. Firstly, on slide 51, you provide your forward rate assumptions. I think you've got one hike embedded into your plan in 2027. Can you just give us an indication of what the sensitivity of the revenues are in your plan should those rates either end up 25 basis points higher or 25 basis points lower? And then the second question, on provisions, you've obviously had a period of declining or stable MPEs. There is an ever so slight tick up in the gross MPEs this quarter, 2.6 to 2.7. The coverage ratio is edged down. Perhaps you can just give us a little bit more on the drivers of that during the quarter and what's embedded into your assumptions for the through the cycle cost of risk guidance going forward. Thank you.

So first one, yes, we're right, we're expecting in the next three year an average arrival around 2% for this year. 2.1 in 2027 and around 2.3 in 2028. There is an assumption of a rate cut at the end of 2027 for 25 basis points, just that one. The net interest income sensitivity plus minus 50 basis points is around 300 million in terms of impact to the revenue. meaning reduction of the rates 300 million less, otherwise it's 300 million more in case of rate increase. That's the sensitivity. In relation to the provision in the quarter, let's look. So the default rate of the portfolio was around 1.3% for the overall group. was 1.3 for Italy, was 1.4 for Austria and 1.5 for Russia, while it was around 1.1 for Germany. When we are looking at the overall trend of the portfolio, it is fundamentally stable in comparison to the previous year. In relation to the trend of the default rate in the following years, we are expecting a slight increase in default rates. This is what is embedded, but we are not expecting any significant, neither in the evolution of default rate, nor in the evolution of the MP ratio, meaning yes, we can have some slight adjustment like what happened during Q4, but nothing specific or problematic. The strategy of the group is the same, meaning a combination of ordinary workout management plus sales when necessary. Cost of risk, as commented, we're expecting a cost of risk from 15 to 20

including overlays if required the next question is from antonio real bank of america please go ahead morning everyone antonio from bank of america just a quick question on on the moving parts of your revenue line uh you've added another 10 billion or so to your replicating book this quarter which is um a big number you're now just over 200 billion And this is a clear tailwind to your net interest income growth. And you've talked about pursuing growth in loans and deposits without diluting margins. And I think we all understand what that means. So net of restatement, I'm trying to understand what does this all mean for your NAI growth here and how that squares up with the growth in fees insurance, given all the work you've done and are doing on product factories. Thank you.

Yes, so replicating portfolio, you mentioned replicating portfolio. Yes, we are currently over 200 billion of size of the replica on the edging. We're expecting to have a positive contribution from replica of around 400 million for each year in terms of contribution. We are expecting to have... a net interest income increase, a progressive increase of the net interest income when we look 26, 27, 28, especially considering the impact from Russia that, as I told you, is higher on the top line, and especially net interest income, as assumed, especially in 26.

Thank you.

The next question is from Daphne Lee, JP Morgan. Please go ahead.

Yes, good morning. Thank you for taking my questions. Just really to a quick one. Just on fees and commissions, if you could just tell us, you know, sort of what is your assumption on your current partnership with Amundi, which is, you know, maturing soon, and any impact, negative impact that you factored in already in your plan? Then the second question, you've talked a lot about how sort of AI is going to improve your operational efficiency. If I'm not mistaken, I sort of heard earlier in the presentation that AI has already reduced your IT costs by 30%. Just wondering sort of how much more do you expect on the cost side in terms of reduction from AI specifically? Thank you very much.

Okay. So, on a Monday, you all know that the contract that we had ends mid-27. And therefore, it ends mid-27. Until then, you have noticed that we have increased the volumes with other providers and with one market. Every time we do that, we pay them a penalty. And until, obviously, 27. And those penalties have been paid, and we have taken a provision on those penalties for most of those penalties that we anticipate for this year and half of next. So that's that. With respect to AI, look, it's very difficult to tell you. I think I will refer to same thing that everybody will tell you, if you take processes like large corporate credit process, if you take transaction monitoring, if you take KYC, if you take onboarding, if you take all of these very analysis or labor intensive processes, these processes, once they're redesigned, can be can be made more efficient not by, I mean, by very high percentage numbers, double digit percentage number. Obviously, not every process in the bank can be done that. So you need to do it, and as I said, in order to do that, first you need to redesign, then you need to determine how you're gonna absorb people, and then you need to do it. So this is why we continue to say circa. We took a, let's call it a number that we feel It's comfortable, but the adoption or the impact increases between 26, 27, 28. We would not have been able to step up the investment the way we wanted to step it up and still take costs down 1% per year, which... by and large is about 100 million per year on a net basis without not only stepping up on our change, but supporting that change with AI. But I don't have more than that at the moment. I would be just speculating.

Great. Thank you very much.

The call has now concluded. Thank you for your participation.