Banca Mediolanum S.p.A. (BMED) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Banca Mediolanum Full Year 2024 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Alessandra Lanzone, Head of Investor Relations. Please go ahead, madam.

Thank you. Thanks for joining us today to go over the highlights and the results of 2024. It's been a year of amazing achievements as a matter of fact. Before we dive in, just a quick reminder. [Operator Instructions] Up next, I'm pleased to introduce our CEO, Massimo Doris, who will guide us through the presentation today. And joining him is our CFO, Angelo Lietti. Massimo, the floor is yours.

Thank you, Alessandra. So I took up the jacket because it's awfully hot in here. So good afternoon, ladies and gentlemen, and I'm -- it's great to be with all of you here today. 2024 has been nothing short of transformative, a year where we redefined our potential, where ambition met execution and the results speak for themselves. They are more than just metrics. They reflect the power of our vision and the passion of our people. In a year marked, both by challenges and opportunities, we committed to carry out both strategies that have driven tangible and sustainable growth. By focusing on our core strength and staying agile in the face of change, we not only achieved outstanding results, but also capitalized on the groundwork already laid to drive long-term value. And our performance was universally and resoundingly recognized and appreciated by all of you in the financial community. We are talking about and across the board, a record-breaking year. Starting with our commercial performance, we achieved unmatched total net inflows of EUR 10.4 billion, which includes a particularly significant EUR 7.6 billion into managed assets. On the financial side, we surpassed the major psychological milestone of EUR 1 billion of net income, reaching an impressive EUR 1.12 billion. Let's set the record straight. In 2024, we had an extraordinary level of performance fees to the tune of EUR 370 million growth, boosting our bottom line. But our success isn't just about performance fees. We have always said that performance fees are like the icing on the cake, certainly nice to have, but it's the quality of the entire cake that really matters. In fact, one thing I want to emphasize here is the strength of our operational performance with an operating margin, which marked a double-digit increase last year to EUR 1.1 billion. Our operating margin indeed reflects a well-rounded solid business across all areas and is a reliable metric you can count on. In fact, as with all banks, the strong operating margin is certainly associated with the strong growth in net interest income. However, unlike the rest of the banking sector, our margin will be sustainable thanks to the distinct nature of our business model, which is heavily oriented to our fee-based revenues. And these revenues will effectively offset the natural decline in NII expected next year. Let me emphasize that the dependability of our operating margin is also reinforced by our responsibility to provide an accurate and reasonable guidance, which we consider to be a cornerstone of our communication strategy with you as well as a sign of respect for your job. And in these past few years of constant change and unpredictability in a world where uncertainty seems to be the only certainty, our level of commitment to precision is no small matter, especially when conditions change. For instance, in 2024, we adjusted our guidance upward since our commercial performance far exceeded expectations. We raised our forecast for net inflows on 2 separate occasions, reflecting extraordinary momentum. And while we slightly adjusted our NII projections downward to account for shifts in the yield curve, we also had to account for the overwhelming success of our promotional offers which outstripped even our most ambitious target. It's a bit like opening the door to a small party and ending up hosting the whole neighborhood. An incredible turnout, but one that naturally shifts the numbers. This is a story of positive surprises, not setbacks. And while we are on the subject of positive surprises, I'm really happy to talk about dividends. We are excited to propose at the shareholders' meeting, the distribution of a EUR 1 dividend per share, leaving a remaining balance of EUR 0.63 having already paid an interim dividend of EUR 0.37 in November. Specifically, this means our base dividend will increase by 7% to EUR 0.75 per share. And in light of the extraordinary level of performance fees in 2024, there will be an additional distribution of a special dividend of EUR 0.25. Let me emphasize, however, that the entire amount of EUR 1 is an ordinary dividend. No question about it, a year that shattered records, and we are proud to share the success of this record-breaking year with all of those who made it possible through a tangible gesture of appreciation. So in addition to the special dividend for our shareholders, every single employee and family banker of the over 10,000 in the group will receive a bonus of EUR 2,000. Now let's go through the details of the year, looking first at the economic and financial highlights. Slide #4 tells the story. Net income soared to nearly EUR 1.12 billion, jumping 36% ahead of 2023, with Q4 contributing EUR 445.3 million, a truly record-breaking performance, powered by dual engine growth, not just by our strategically managed net interest income, but even more so by a double-digit surge in net commission income, up 13% to almost EUR 1.17 billion which incidentally maintained a high growth rate throughout the entire year. This was mainly thanks to our recurring fees, including both management and investment management fees, which set a new benchmark, climbing to EUR 1.54 billion, a strong 16% increase year-on-year. On a pre-IFRS 17 like-for-like basis, recurring fees on average assets came in at 212 basis points for the year. Margins remain robust, dipping slightly in 2024, as we've discussed, due to a higher allocation to the increasingly attractive fixed income funds and a greater presence of Intelligent Investment Strategy money market funds. As you know, over the past year, net flows have been largely directed into fixed income funds enabling our customers to incrementally adjust their equity-heavy portfolios. As a result, the equity component of their managed assets has seen a slight decline, but still stands at a notable 58% as illustrated on Slide 15. Net interest income was exactly in line with our guidance, up 8% versus the previous year at EUR 811 million. By all means, despite the rate cuts and the weight of all our promotional initiatives, our NII held up remarkably well. Our 2025 guidance for NII calls for a slight decrease of some 5% following the latest market expectations in terms of the yield curve. That said, the expected growth in commission income will play a key role in bridging any shortfall in NII, sustaining a strong top line. As a result, our overall outlook is positive. As reflected in the operating margin, our high operational efficiency is key to driving profitability and securing long-term business resilience. With that in mind, I'd like to bring your attention to our cost-to-income ratio now at 39%, a clear improvement over 2023 in line with our guidance. Stronger top line growth, powered by higher recurring fees is the key driver behind this efficiency gain. On the other hand, our commercial success impacted acquisition cost to gross commission ratio, which saw a modest uptick driven by inflows into managed assets that were almost double year-on-year and which, of course, resulted in higher bonuses. Don't forget that these bonuses on new money don't have an immediate offset in fees. While that instantly affects acquisition costs, the corresponding commission income materializes progressively since fees are generated gradually over the investments' lifetime. Finally, as you well know, market effects this year had a significant impact on our bottom line, particularly performance fees, which totaled EUR 377 million compared to a modest figure in 2023. Let's now look at the fewer other line items of the income statement in detail on Slide #8. As far as costs are concerned, G&A ended up with an increase of 9%, just a bit better than our indications. Rather, the significant increase in provisions for risk and charges is largely due to the meaningful drop in interest rates, which lowered the discount rate applied leading into a higher severance pay provision for a network that incidentally continues to grow in both headcount and commissions. And finally, the line extraordinary items. As we have already mentioned, the extraordinary bonus of EUR 2,000 that every employee and family banker will receive had an impact on the P&L for a total of EUR 21 million and is included in extraordinary items. Let's jump to Slide #5 where I briefly comment on the business results you are well aware of. Total net inflows gained momentum quarter after quarter, showing steady progress throughout the year and reaching a groundbreaking EUR 10.4 billion, a 46% increase. Most notably, Managed Assets climbed to EUR 7.6 billion, almost double last year's level and setting a new all-time high for Banca Mediolanum. Let me emphasize our key message. Flows are the lifeblood of our business, essential to our growth. On Slide 34, you see that in 2024, we firmly held our top position in the accelerated rankings for managed assets net inflows. This remains true even under the new categorization, which now includes administered assets under advanced advisory, meaning with advisory fees on top or fee only. Our consistent leadership in these rankings reinforces our strong market position. And as you can see, Slide 33, January performed with the same conviction with EUR 487 million in managed asset flows, EUR 200 million more than in January last year. Please note that in January, Administered Assets' flows were also resilient, bringing total inflows for the month to EUR 863 million, not bad at all, considering the seasonality of January. Back to Slide #5. Our total assets set a remarkable new high at EUR 138.5 billion, marking outstanding 17% year-on-year growth, fueled by our steady deposit, robust net inflows over EUR 10 billion and supportive market dynamics, which contributed another EUR 10 billion. Moreover, our loans granted totaled EUR 3.1 billion, 4% higher year-on-year, thanks to the solid bounce back in Q4 that was driven by our initiatives to support mortgage customers. As a result, our credit book surpassed last year's figure, reaching EUR 17.6 billion, up 3%. The net NPE ratio of 0.79% continues to underscore the health of our loan portfolio, while the 12 months rolling cost of risk at 18 basis points aligns with our expectations. General Insurance gross premiums also accelerated towards the end of the year, led by the stand-alone policies and the in-force business in particular. Total premiums reached EUR 206 million, a solid increase of 11%. When we met last time, we indicated that in normal market conditions, inflows into Managed Assets in 2025 would remain as strong as last year, implying some EUR 7.5 billion. So what makes us so confident to think we can repeat this performance? First of all, as clearly illustrated on Slide #6, considering that we made another significant jump of 7% in the number of bank customers, bringing us close to 1,919,000. This was boosted by our promotional offers, which enabled us to acquire a record of 198,000 new customers over the year. And while we are on the subject of promo offers, I'd like to give you an update on the EUR 2.2 billion of time deposit from the Q1 2024 5% promo offer that matured last July. We have already achieved our target of 70% conversion rate in just 5 months -- conversion rate into Managed Assets. On the other hand, the 5% promo offer from last fall, which gathered a total of EUR 1.9 billion in only 2 months, will start to mature in March. First, based on our experiences, we can assume that 70% will be transformed over the course of 2025. On top of this, as you may know, we are currently running a new 2-month campaign offering 4%. So far, it has brought in some EUR 400 million, and we expect to reach about EUR 1.5 billion by the end of February. The 6-month time deposit will start to mature in July. This means we'll have the entire second half of the year to work on converting most of these deposits into managed assets. But one thing is certain, EUR 2.7 billion are set to be automatically converted into mutual funds in 2025. Specifically, as shown in the last 2 lines of this slide, over EUR 1 billion are in the deposit account of Double Chance, while EUR 1.7 billion come from annual flows of Installment Plans, which are growing significantly boosted by the commercial efforts we carried out at the end of the year. Please note that our Intelligent Investment Strategy is also gaining traction with assets in money market funds, up by EUR 1.2 billion compared to a year ago. In fact, in a declining rate environment, investors are increasingly shifting their focus toward long-term equity investment options supported by our automatic services. Our distinctive approach creates a solid framework for consistent inflows, driving the steady expansion of recurring fees over time. In addition to short-term strategy, it provides long-term stability by ensuring a predictable revenue stream even in changing market conditions. Another important driver of our commercial performance is the growth in our Family Bankers network. The continuous recruitment in training of professionals from various backgrounds, along with the gradual onboarding of new banker consultants is underpinning our organic growth. This approach which supports our commitment to building up a strong foundation for sustained growth, brought the total number of Family Bankers at the group level to 6,415, a 3% increase year-on-year. As of today, 420 banking consultants joined through the Project NEXT, and they actively assist senior private bankers. Additionally, 138 banking consultants are currently under training in the Executive Master's program and Mediolanum Corporate University. Let's now turn to another key area. Balance sheet ratios as shown on Slide 7. Banca Mediolanum stands on a rock solid capital foundation ensuring both stability and room for future expansion. Our financial strength not only position us as a secure institution for customers and investors, but also provides flexibility in the face of economic and regulatory shifts. Our CET1 ratio remains exceptionally high at 23.7% with a leverage ratio of 7.8%, giving us ample capacity for organic growth. The solid position also allows the Board to stay on track with our increasing dividend distribution. Looking ahead, as we've discussed the implementation of the final Basel III regulations in March will result in having higher risk-weighted assets, leading to a decline on CET1 ratio of about 2 percentage points. However, our strong capital base proves we are well equipped for this transition. Turning our attention to Spain. Let's examine the remarkable progress in this key market as shown in Slide #31. Spain recorded an operational margin of EUR 76.7 million, in line with 2023, while net income surged by 31% year-on-year reaching EUR 81.1 million. While net interest income in Spain didn't grow as it did in Italy, the bottom line still benefited from strong performance fees. Total assets have expanded by 24%, reaching EUR 13 billion with nearly EUR 9.6 billion in managed assets, an impressive 33% increase. Net inflows totaled EUR 1.5 billion, 74% higher than the previous year with Managed Assets' inflows contributing EUR 1.45 billion, nearly tripling the 2023 flows, largely driven by the success of the Double Chance services. On the lending side, the credit book gained momentum approaching EUR 1.5 billion, reflecting 11% growth primarily fueled by a steady volume of mortgages granted. Meanwhile, the number of Family Bankers remained relatively stable, slightly decreasing by 2% to a total of 1,614. As you know, our strategic focus has increasingly shifted toward enhancing the quality and productivity of our Family Bankers, especially supporting and developing those who have joined us in the past few years with a clear objective of raising the average assets per adviser. You know this is a strategy we successfully executed in our domestic market over the past decade. To conclude, our customer base in Spain has expanded to 255,000, reflecting a strong 10% growth year-on-year. In closing, we take great pride in how we've navigated the challenges of 2024. It tested us at times, but by being proactive, staying focused while adapting when needed, we delivered on our commitments and kept pushing forward. This complex year demonstrated our strength and determination, and we are excited for what's ahead. Let me recap our guidance for 2025. Net inflows into Managed Assets of around EUR 7.5 billion, assuming normal market conditions. Net interest income to decrease by about 5% compared to 2024 based on current interest rate curves. Cost-income ratio below 40%, cost of risk at some 20 bps, base dividend to increase compared to the previous year, of course, subject to a shareholder meeting approval. While 2025 also comes with its challenges, amid an evolving external content still taking shape with the threat of tariffs, the German elections and the Central Bank policies, we started the year on the right foot with January flows surpassing last year's levels. Barring major market disruptions, our well-established business model and highly diversified revenue stream, position us well to maintain solid momentum and keep recurring KPIs broadly in line with those of the record-breaking year 2024. That alone will be a great achievement. Thanks, everyone, for your engagement and support and Alessandra, back to you.

Thank you, Massimo. And we can now open the Q&A session, please.

[Operator Instructions] First question comes from Marco Nicolai, Jefferies.

Good afternoon. My first question is about the guidance of net inflows into managed assets. You talked about EUR 7.5 billion. So you expect another record level, the same record level we -- the same record year that we saw in 2024. Could you also provide further indication and tell us whether this level of EUR 7.5 billion will be sustainable beyond 2025 as well. Also, could you please provide some guidance as to 2025 margins? Then I'd like to also have a question -- I have a question about the exchange offer put forward by Mediobanca. You are Mediobanca's investors, but you are also competitors in terms of wealth management. So I really appreciate if you could share your thoughts on this transaction?

Net inflows into managed assets of about EUR 7.5 billion. Will we be able to repeat this number, to have it beyond 2024 as well, yes, because the number of sales people is increasing. Customers in terms of -- are numerically increasing too. So if we have more Family Bankers and more customers in the future, we'll be able to sustain that growth. But please consider that this is a highly volatile number because it's quite sensitive to capital markets performance. So if markets behave, let's say, normally and also if the economy behaves normally and geopolitics too, I think that this amount could also be increasing over the medium term because once again, we are growing the sales network and the number of customers. Should the market pivot and go down by 20%, of course, in that same year, we won't be able to report EUR 7.5 billion net inflows into managed assets. Back in 2023, that number was equal to EUR 4 billion, and the previous year, '22 was EUR 6 billion. So we went from EUR 6 billion in 2022 to EUR 4 billion in '23. But that EUR 4 billion was the best net inflows reported by -- into Managed Assets reported by Italian Sales Network in absolute terms. So those -- I mean that EUR 4 billion is almost equivalent, if you wish, to the EUR 7 billion we reported today. Margins are down to 12 basis points in terms of average recurring fees. So I expect that our -- that this will go down this year as well a bit. Because on the one hand, investment into fixed income funds may continue holding up because I really think that yields are interesting, are attractive there. But also this average is quite impacted by the success of Intelligent Investment Strategy. So compared to December 31, 2023, the money that was deposited in monetary -- in many market funds, which were tied to Intelligent Investment Strategies, went up to EUR 1.2 billion, and they have this monetary funds, have an average commission of 20 basis points. So if we make EUR 1.2 billion more with fees of only 20 basis points on average, would inevitably bring that average number down. But then you also have to consider equity funds. So I am not concerned. So this being said, those 212 basis points I mentioned at the very beginning, should go down to 207. But once again, this is a number which is heavily impacted by the success of our intelligent investment strategy. I'd like also to remind you all that in 2019, at a certain point in time, we closed a category of funds to new subscriptions. Those funds had subscription fees, entry fees, which were very low, but a management fee, which was extremely high. And we gave our Family Bankers the possibility to discount down to 100%, all entry fees for these categories of funds. So we said, let's not keep our category of funds that has low entry fees and high management fees. It doesn't make any sense. So we didn't report any inflows into those funds that used to pay 20% to 25% higher management fees compared to a similar fund with a higher entry fee. This, of course, has generated, has channeled the inflows into these other funds, thus bringing down the average fee in general. But once again, the management fee is well above the market average, not because we are more expensive than the market, but because of our mix. In fact, the changes in interest rates is channeling, is shifting many inflows into fixed income funds. Still, investments into equity funds are equal still to 58%. That portion, that share could be declining in the future. But if the markets change again, they will go up again. I remember that our all-time low in terms of investment into equity markets was 49%. So we are always well above very many other competitors. As far as MPS Mediobanca, well, in terms of competition, well, it doesn't make that big of a difference, whether this actually happens or doesn't. We've been operating since 1982. We've navigated quite a few changes in spite of which we've been steadily growing. We'll keep growing whether this merger actually happens or doesn't. Thank you very much, Marco.

Next question comes from Gianluca Ferrari, Mediobanca.

I have 3 questions for you. The first is on interest income -- net interest income, that quarter-on-quarter reported an increase in the fourth quarter. Can you give us some color with respect to the technical issues because the Promo between September and October should press down on NII by some EUR 15 million. The second question is on provisions on risks and charges. And can you tell us what's inside this number? And then dividend, EUR 0.75 is the base dividend. You were talking about a EUR 0.04 annual growth. This new base of EUR 0.75, how did you get there? I mean what is the kind of reasoning you followed based on what kind of growth you see coming there based on current values -- on present values?

Let me start with the second question on the provisions on risks and charges. Half of the increase we reported was driven by the fact that the network grew and therefore, also commissions rose because also assets under management increased. So the higher the managed assets and the network, more provisions have to be set aside for the network. The other half of the increase is due to the decline in interest rates because future flows are discounted to present value. And since we are discounting them at a lower [indiscernible], to be even more precise, what really has an impact year after year is the change in interest rate over the previous year. The decline of 2024 over 2023 was greater than between 2023 and 2022. So half of it is due to the interest rate and half of it is due to the increase in commissions in general. Then you asked about the EUR 0.75 increase. We might be considering growth by 5% to 6%. This is something we can consider, but then we will have to revise it each year, EUR 0.01 more or EUR 0.01 less. But of course, next year, certainly, we are not going to stop at EUR 0.76, but rather, it would be something more than that. But figures, projections, commissions and NII income statement, and also capital ratios, considering these aspects, we believe that we might offer an interesting increase. As to NII quarter-on-quarter, the cost of funding has declined because the ratio between time deposits and bank account is 1:10. And therefore, actually, this led to this result. Also, treasury funds was due to the tax -- sorry, the rate cut has impacted on the cost of funding and therefore, the increase -- and hence, the increase of the fourth quarter NII over the third quarter.

The next question comes from Luigi De Bellis, Equita SIM.

I have 2 questions. My first question is a follow-up question on NII. Could you please share with us the assumptions underpinning the new guidance in terms of cost of funding. And also in terms of expected volumes in terms of loans to customers for 2025, which is implicit or incorporated into your guidance? Spain, what are your expectations in 2025 in terms of new bankers acquired and new customers acquired?

Well, as to NII, that minus 5% is based on an average 3-month Euribor of 2.37%. So we took the curve, calculated the average, and that's the base for our forecast. But we have also included in our guidance all initiatives we're going to launch like the Promo campaign, which is underway right now, a 4% Promo as well as the kind of fees that will be paid for Double Chance products. That is why we expect that minus 5% in terms of decline in net interest income. Spain, I believe, could really replicate the same results that they attained in 2024 in both terms of number of customers and also inflows. As far as the number of Family Bankers are concerned, we focused on improving existing bankers' productivity. But of course, we didn't stop recruiting and hiring new people, but we kind of let up a bit. So the new entrants have not completely offset all the exits. But we succeeded importantly in improving the bankers' productivity because the average book for the Spanish sales network -- and please consider that the average age for Spanish Family Bankers is about 10 years less than Italian Family Bankers, and this is really important. At the end of 2023, they had an average portfolio of about EUR 5.4 million. A year later, the portfolio went up to EUR 8.1 million. So significant jump. Anyway, in 2025, I expect that the number of Family Bankers will not decline anymore. We don't expect a decline, will go up a bit, but want to really shoot through the ceiling, because once you have improved the productivity, it takes a while [indiscernible] you now to crank up and get to the normal cruise velocity, so to speak. So I think that things will kind of stabilize in 2025. And then in 2026, the growth of our sales network will pick up again if markets remain positive. I think that the good results attained by Spain in 2024 will be replicated in '25 as well.

Next question Giovanni Razzoli, Deutsche Bank.

First question, recurring management fees. Over the quarter, you reported a strong increase, EUR 20 million over the third quarter despite the customers' asset mix has not changed that much because the equity component remained stable at 58%, similarly to the previous quarter. And again, can you elaborate on this positive trend and whether there are any nonrecurring components? Second question, business consultants. I believe this is really a distinguishing element of Mediolanum's strategy supporting long-term growth. You reached 380 professionals, 130 are being trained. What is your 2025 target for this professional figure? And then if I may, you made a comment with respect to the MPS Mediobanca deal. This was, of course, a comment by the Mediolanum representative. Can you just make a comment as a shareholder of Mediobanca?

Management fees are growing driven by average Managed Assets, where in the fourth quarter, we had more managed assets than in Q3. So there's nothing extraordinary in this type of performance or dynamic. As to banking consultants, I'm really happy with how this project is rolling out. We have included 420. The average age is 24, 25 years. And considering starting to work as a financial adviser at that age would be really a dream or a wishful thinking. But with this project, it is possible with great satisfaction and great productivity because they are not just learning, they are actually -- they actually have a hand on work, and they lead to actual results. Let me specify. This project had a double goal, increase the productivity of our private bankers and wealth advisers. And in the meantime, train the future generation of Family Bankers within Mediolanum. More than 400 people being introduced with age of 25 years, the second goal has already been achieved. But this is achieved only if things work and they stay in Mediolanum. Otherwise, they would just quit. And they will stay in Mediolanum if the first goal is actually achieved, i.e., increasing the productivity of Family Bankers and Wealth Managers, which actually took place. Senior bankers who decided to have banking consultants working at their side, I would like to remind you that the commissions paid to the banking consultants are paid by the senior adviser and not by Mediolanum. So it's important to have an increase in productivity. Otherwise, it will not be worthwhile for the senior adviser. The senior advisers who decided to enter this project had already outperformed and received more commissions than the other advisers. So they were already outperforming those advisers who did not join the project. Their assets under management on average was 15% higher than before or with updated results, we can talk about a 10% increase over their peers, 21% more loans and client acquisition was 45% higher compared to their peers and protection policy business increased by 26% in terms of individual policies. These were the various dynamics 1 year after they had their banking consultants. And their outperformance went from 10% to 58% for loans from 21% to 31%, protection policies from plus 26% to plus 58% and new client acquisition from 45% to 100% -- more than 100%. So this tells us that everything is working well. These are the actual data, but then we have the satisfaction on both fronts, both by banking consultants and by senior advisers. So we'll keep it up also in 2025 and while more and more private bankers and wealth advisers take a banking consultant with them, of course, the dynamic will change. There are some 10 senior advisers that have actually taken more than one banking consultant with them. So we believe that we have 420. We want to get up to 550. And if you add them up with the 138 we already have, we're going to increase that. But we have a small -- some turnover. It's really negligible, but there is some turnover. The entire project takes 6 months and then they have to pass an exam to become a financial adviser. It's a lengthy process, but we'll keep it up also in 2026 and so on and so forth. So then as to the MPS Mediobanca deal, speaking as a shareholder. Right now, I cannot comment because, of course, this is something that is in the hand of the Boards of Directors because the 3.4% shareholding is subdivided between Mediolanum Vita and Banca Mediolanum. So this is an issue that has to be discussed by the Boards of Directors. We will discuss this topic later on when we'll have all the necessary information. So now just giving you an indication or guidance right now considering the effect this would have on the market is something I would rather not do because I really wish to have all the information at hand and to be able to discuss it at a Board meeting. Thank you.

Next question from Elena Perini, Intesa Sanpaolo. Please go ahead.

I have 2 questions that are strategic in nature. And then another question, which concerns Basel IV. So first question about your strategy. The outlook is still very comforting. So what are the main risks or the main events that may somehow jeopardize this very positive view you have. Second question about the strategy. You have always said you are focused on organic growth, and you're doing it extremely well. You are still uninterested in playing an active role in the consolidation that is going on in the financial market or under certain circumstances, you may also consider to play an active role. Finally, I'd like to know whether you can share an indication on the -- concerning the Basel IV impact, your gross commissions and performance fees were very high. So I'd like to know what kind of impact that may have?

First question, risks hovering over our future growth. Honestly, I don't see anything in the offing that may threaten our growth I see things that may slow it down. But you know, the race is something relative. I like cycling, and when you have to ride the bike uphill, your average speed declines. When you are riding in a plane on a level ground, you may run as fast as 40 kilometers per hour. Uphill, of course, you slow down. But if you slow down less than your adversaries, you can win nonetheless. So if we go back to 2023, when we reported the EUR 4 billion net inflows into Managed Assets, EUR 2 billion less than 2022, nonetheless, we were far better than all other competitors. So our growth slowed down, but at the same time, we gained market shares. So the market may change. Instead of reporting EUR 7.5 billion, maybe we will report EUR 8.5 billion. If markets go down, we will just report EUR 5 billion. But if the others -- if peers report EUR 3 billion or EUR 4 billion, we're still better than them. So I have no worries -- no specific worries, but I do -- I'm really light on my toes and keeping my antennas up to understand what is going on in the world to be -- to look at the competitors and always be ready and be at the forefront of change. As far as M&As, I've always stated we are not interested in mergers or acquisitions. I cannot say we will never ever make a merger or an acquisition. Right now, we don't see opportunities. We don't see any attractive targets. So we will keep growing organically, never say never, of course, but it's quite difficult. It's quite -- it's not impossible, but it's, I would say, hard for this to happen. Basel -- for Basel IV or rather 3.5 will make our fees go down slightly. But since they are so high, that will not have a heavy impact on our growth policy, specifically the portion that has an impact on risk-weighted assets, i.e., mortgages, loans, et cetera. Thank you so much.

There are no more questions on the Italian line. Let me hand it over to my colleague for the questions on the English line. [Operator Instructions] We are now going to proceed with our first question. The questions come from the line of Ian White from Autonomous Research. I think this question is withdrawn. [Operator Instructions] We have no questions on the English call. I will now hand back to the Italian call. Thank you. [Operator Instructions] No further questions. Let me hand it over to Ms. Alessandra Lanzone.

Well, then that was it. Thank you, everyone. I wish you a good evening, and we'll be back for the presentation of the first quarter 2025 results in May. Thank you.

The conference is over. Thank you for participating. We can now disconnect. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]