Banca Monte dei Paschi di Siena S.p.A. ($BMPS)

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the MPS Group First Quarter 2026 presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Luigi Lovaglio, Chief Executive Officer and General Manager. Please go ahead, sir.

Good morning, and thank you for joining our first quarter results presentation. This was a strong quarter with disciplined execution and clear strategic momentum. We enter the next phase with established governance and strong delivery. [Technical Difficulties] Sorry, I understand, some technical problem. I will start again. Good morning, and thank you for joining our first quarter results presentation. This was a strong quarter with disciplined execution and clear strategic momentum. We entered the next phase with fully established governance, align priorities and strong focus on delivery. The newly appointed Board that ensures continuity of leadership while strengthening our collective expertise and execution capabilities. It brings together high qualified professionals with complementary skill sets, reinforcing our ability to navigate complexity and deliver on our strategic commitment. The message is simple. Uncertainty is behind us, execution is now the focus. The Mediobanca integration remains central, progressing in line with plan and supported by a clear operating model designed to preserve brand strength while capturing the full value of our high-quality talent base and unlocking synergies and scale. This is an execution-led transformation with clear milestones, accountability and quarterly measurable outcomes across our 5 business lines. Q1 results validate the strategy: high quality, well diversified revenues mix, improving profitability, tight cost discipline, strong capital position and leading shareholder returns. At the core remains our franchise strengths, a broad and resilient client base across families, entrepreneurs, [ smiths ], corporates and local communities supported by a consistent high-quality service model. We are building a more diversified, more resilient banking group, while remaining firmly anchored to our identity and to the needs over 7 million clients. Let me now turn to the key highlights. This quarter demonstrates earnings momentum with visibility and repeatability. We delivered EUR 521 million net profit and EUR 111 million profit before tax, up by 15.6% quarter-on-quarter, and 6.7% year-on-year on a pro forma basis. Operating leverage is unmistakable. Gross operating profit exceeded EUR 1.1 billion up 8.4% quarter-on-quarter. Revenues increased 3%. Costs declined 3.1%. The cost income ratio improved to 44%, down 3 percentage points versus last quarter. Commercially, Growth is broad-based. Loans reached EUR 129 billion, up 1% quarter-on-quarter and 5.2% year-on-year, supported by EUR 1.7 billion of new mortgages and EUR 2.7 billion of consumer credit. Funding is resilient. Direct funding is stable at EUR 106 billion and indirect funding stands at EUR 185 billion, up EUR 12 billion versus March 2025. Asset quality remains strong. Cost of risk is 42 bps. Gross NPE stock is down to EUR 3.7 billion, with ratios at 2.5% gross and 1.3% net and coverage up to 15.6%. Capital is a differentiator. Core Tier 1 is 15.9%, even after 100% payout accrual and risk-weighted asset growth. And critically, integration execution is on track. The merger was approved on 10 March 2026 with 8 work streams, 50-plus projects and 300-plus colleagues mobilized and synergies progressing as planned. Let me now go 1 level deeper, starting with profitability. Net profit in the quarter was EUR 521 million, but this reflects tax effects and PPA adjustments, which limit like-for-like comparability with prior periods. The cleaner profitability indicator this quarter is profit before tax. EUR 911 million, up 15.6% versus Q4 and 6.7% year-on-year on a pro forma basis. That uplift is driven by operating performance, core revenues, cost discipline and the well-contained risk profile. We are strengthening the bank's run rate, while executing the integration. Now let's look at operating results that best captures the dynamic. Net operating profit was EUR 947 million, up 9.5% quarter-on-quarter reflecting strong operating momentum and improving earnings quality. Performance was driven by positive revenues mix, dynamics and tight cost discipline with a stable risk profile. Year-on-year growth of 3.4% confirmed strength and consistency of our earnings trajectory. Let me now show how this translates into operating leverage. Gross operating profit was about EUR 1.1 billion, up 8.4% quarter-on-quarter. Revenues rose 3%, while operating cost declined 3.1%, which is the definition of positive [indiscernible]. As a result, the cost income ratio improved to 44%, down 3 percentage points versus Q4. Year-on-year, gross operating profit was up 4.3%, confirming the solidity and diversified business model even in a complex environment. This matters for integration because synergies are delivered by a culture of cost ownership and performance management. Now I will move to the two revenue pillars, net interest income first, then fees. Net interest income was EUR 1.036 billion, up 1.9% quarter-on-quarter. The increase came from improving commercial spread and higher lending volumes, fully aligned with our strategy. Year-on-year NII was stable, showing resilience supported by volume growth and proactive management of funding costs. You can see that in commercial spread dynamics this trend with disciplined pricing on both lending and funding. Beyond the current quarter dynamics, the combination with Mediobanca structurally reduce interest rate sensitivity now at around [ EUR 50 million ] for 100 basis points strengthening earnings and the stability of our earnings across rate scenarios. Fees and commissions were EUR 618 million, up 2.8% quarter-on-quarter. The most important point is mix. Wealth management fees increased 7.6% quarter-on-quarter, reflecting targeted commercial focus on strategic areas. Commercial Banking fee shows some seasonality effects quarter-on-quarter, and the year-on-year reflects the normalization of the Arma Partners contribution. So the line is our growth engines are working, particularly in wealth and advisory. This connects directly to the Mediobanca logic. Integration expands product capability and distribution reach accelerating fee capture through cross-selling. Let's now look [ what's behind ] this in terms of commercial momentum. This quarter confirms the strength of our franchise. Total financial assets were almost stable quarter-on-quarter despite market turmoil and wealth management gross inflows increased by close to 10% quarter-on-quarter. On lending, we originated $1.7 billion new retail mortgages and EUR 2.7 billion on new consumer finance in the quarter. Now let's translate momentum in terms of the balance sheet, starting with customer loans. Customer loans were EUR 129 billion, up 1% quarter-on-quarter. Growth is driven by the quarter's production already discussed and is well supported across business lines. On a year-on-year basis, loans increased 5.2% with contribution from all businesses. This is important. The growth is broad based, not concentrated in a single segment. It reinforced our integration strategy. We are scaling a multi-business platform while maintaining consistent underwriting discipline. Now moving to the liability side, Direct saving and funding franchise strength. Commercial direct savings were EUR 106 billion, showing resilient dynamics quarter-on-quarter. Since March 2025, we grew direct savings by EUR 4.6 billion, a strong indicator of customer trust and franchise quality. In today's base environment, funding stability is strategic. It protects margin, supports liquidity and reduce sensitivity to market funding. It indeed give us additional optionality as we integrated. We can optimize product mix, deepen primary relationship, especially in premium and private segments. Now let's look at indirect funding where fee momentum and client engagement are most visible. Indirect funding was stable at EUR 185 billion quarter-on-quarter despite market volatility. Both assets under management and assets under custody held up very well in a challenging macro and geopolitical environment. Since March 2025, indirect funding is up EUR 12 billion, mainly driven by asset under management, confirming strong commercial focus and asset gathering capacity. This delivers stronger revenues quality with greater fee capacity, deeper advisory and enhanced client economics. Integration further strengthens this by the expanding capabilities and brand reach in wealth and advisory. Let me now return to efficiency. Operating costs were EUR 859 million, down 3.1% quarter-on-quarter. Both components contributed, HR costs declined 3.2% and non-HR costs declined 2.8% versus Q4. Year-on-year, costs were up only 1.1% despite labor contract renewal impact. That is a disciplined cost control without disturbing the business of investment. From an integration standpoint, cost discipline also -- how we protect synergies delivery. Now let's move to asset quality and risk. Asset quality remains a clear strength. Gross NPE stock is EUR 3.7 billion. The gross NPE ratio is 2.5%, and the net NPE ratio is 1.3%. Coverage increased to 50.6%. Cost of risk is 42 bps, stable versus last quarter. We are protecting balance sheet quality as we integrate. Now on to liquidity and funding resilience. Our liquidity profile is sound and conservative. Counterbalance capacity is EUR 49 billion. 72% of the stable funding is represented by customer deposits. The LCR, 157% despite lower ECB funding, now only EUR 6.5 billion, down EUR 3.5 billion versus December 2025. Then NSFR is stable at 121%. Now to capital. We ended the quarter with Core Tier 1 ratio of 15.9%. That is after accruing net profit for dividend distribution and absorbing risk-weighted asset growth from IRB model, updates and the new loan production. Moreover, there is a temporary impact connected with the increase of value of Generali for the profit of the period. This is what I would call a best-in-class capital buffer. It provides strategic flexibility. We can invest, integrate and sustain attractive shareholder remuneration. Now let's move to Mediobanca's quarterly performance and to the integration update. Mediobanca delivered a net profit of EUR 323 million with profit before tax at EUR 447 million, up 19% quarter-on-quarter. Commercial trends were overall positive, and we are seeing first benefits from synergies. Revenues increased 5% quarter-on-quarter with NII up 3%, is up 6% and strong trading supporting other income. The cost income ratio improved to 41%, down 5 percentage points quarter-on-quarter. And Core Tier 1 stands at 15.7%. In Wealth Management, total financial assets are EUR 113 billion, up 4% year-on-year, driven by assets under management, up 7% year-on-year. In CIB, activity has reaccelerated in recent months with growth returning across all major product lines, which advisory fees back to last year level in sound pipeline with ECM and DCM providing positive contribution with high markets activity. Now let me briefly return to private banking. Q1 reflects a temporary dislocation, primarily driven by concentrated banker departures. Since mid-April, however, we have seen a rapid normalization in the business with client confidence returning the banker-based stabilizing and commercial activity rebounding. In the last 3 weeks alone, we have generated approximately EUR 1 billion of potential net new money, largely linked to entrepreneurial liquidity events. At the same time, recruitment has restarted with a focus on high-quality senior profiles with initial hires expected to join from the beginning of this quarter. As a result, Exit trends are improving and commercial momentum is clearly returning. Structurally, our model remains anchored in the PIB framework which is unique in Italy, combining private banking and investment banking capabilities to serve entrepreneurs holistically across wealth corporate transaction and private market. This integrated model supports deeper client relationships, higher quality flows and stronger retention, particularly around liquidity events. While Q1 was transitional, we are now seeing a stabilization, pipeline rebuilding and strengthening of our differentiated model, positioning the business for renewed growth. The same strategic consideration applied to our corporate investment banking franchise, in particular, to our Mediobanca bankers. The integration creates a fully integrated CIB platform combining Mediobanca's advisory excellence with Monte Paschi lending capacity and commercial reach into a single unified offering. We are not simply combined to platforms. We are upgrading the way we win businesses. And let me speak directly to our Mediobanca bankers. This platform is designed to strengthen your competitive position, combining top tier advisory with execution capacity at scale. This is especially relevant in mid-corporate segment, where the combination of advisory and lending is most powerful and where the teams of bankers are already demonstrating the strength of this model. In today's market, advisory wins when it is backed by balance sheet. With this combination, every mandate is supported by both enabling higher conversion, larger transaction, a greater client value capture. This is a clear professional step change, more mandates won, deeper client franchises and stronger long-term economics. Now let me be clear. You are the core of this franchise. Client trust, mandate generation and long-term relationships sit with you, and this group is fully aligned to amplify your ability to deliver. Now I will how this translate into the combined revenues mix. This slide makes the evaluation logic of the group more explicit. The combined business mix is increasingly weighted toward higher multiple activities, notably asset capturing and wealth management alongside CIB and consumer finance, while retaining the strength and the scale of our retail franchise. This evolution supports a step-up in earnings quality and over time a rerating of the group's valuation profile. At this stage, the representation is intentionally focus on revenues as integration is ongoing. As we progress with the alignment of system metrics and performance framework, we will progressively enhance the level of economic and financial detail by business line, providing a more comprehensive view of profitability and capital allocation, this will enable the market to better assess the underlying value of each franchise and appropriately reflect the contribution of higher multiple business within the group. Let me now walk through you through the time line and execution status. We are on track for effectiveness by 4Q 2026 following a clear time line of corporate and regulatory steps, The Board has approved the merger [indiscernible] exchange ratio on 10 of March 2026, next are the merger resolution in May, June and shareholder regulatory approvals in Q3 and then execution and effectivenesses in Q4. The structure is designed to protect value and the entity, Mediobanca emerges into Banca Monte Paschi, while CIB and Private Banking are demerged in the wholly owned company named Mediobanca [ SPR ]. Mediobanca Premier's adviser network will be integrated into Widiba, which will adopt the corporate name, including the Mediobanca brand and the general stake will sit under the new Mediobanca entity. Execution is fully mobilized. 8 work stream, 50-plus projects, 300-plus colleagues and strong [ CMO ] oversight. And importantly, over 300% of target synergies are already secured in 2026, supported by granular monitoring and disciplined execution. Retention of client-phasing talent remains our clear priority with targeted actions already in place to protect franchise value and sustain revenues momentum. Now let me detail synergies and what we have already activated. We are confirming synergies targets and phasing, reaching EUR 0.7 billion by 2028 with a clear ramp from 2026 to 2028. The key point is that initiatives activated in Q1 are expected to contribute visibly during the year. On revenues, we are accelerating structured product distribution from Mediobanca CIB into Monte Paschi channels and launching selected advisory cross-selling. On cost, we are renegotiating share supplier agreements, launching joint tenders, and removing duplications like info provider, consultancy at group level. On funding, we are realizing benefits from issuances executed at [indiscernible] and optimizing the funding mix through 2026 issuance planning. This is what the integration execution means in practice, specific actions tracked centrally and converted into measurable outcomes. With that, I will move now to our closing message messages and outlook. This was a strong start to the business plan. We delivered EUR 911 million profit before tax up 15.6% quarter-on-quarter and 6.7% year-on-year and EUR 521 million net profit, fully in line with guidance. Commercially, the franchise is resilient. Gross operating profit was up 8.4% quarter-on-quarter. Loans were up 1% quarter-on-quarter, driven by 1.7 billion mortgages, EUR 2.7 billion consumer credit and wealth inflow were up 10% quarter-on-quarter despite market volatility. On integration, we are delivering early. Mediobanca is progressing on track and 30% plus of target synergies are already secured in 2026 with execution fully mobilized. We confirm guidance with confidence with 2026 profit before tax expected to exceed EUR 3.5 billion, supported by strong momentum, disciplined execution and sustained delivery of shareholder value. Thank you. We are now ready to take your questions.

[Operator Instructions] Our first question comes from [ Antonio Reale ] of Bank of America.

A couple of questions from my side and one clarification. The first question is on the outlook for the year. You've provided guidance on pretax profit to be above EUR 3.5 billion this year. Can you give us a little bit more color around the moving parts, particularly on feeds. I've heard your remarks on the commercial activity picking up since mid-April. Your comment on sort of departures at the private banking side being behind us. So does that mean we can draw a line here and call this the trough point for fees when it comes to an operational standpoint? Conscious that consensus for fees is at EUR 2.6 billion this year. If you can provide a little bit more color around your thoughts for the outlook, that will be super helpful. That is my first question. My second question is really a follow-up on distribution. Now that you may be in a position have a little bit more visibility. You're expected to complete the Mediobanca minority buyout in October, if I'm not mistaken, which I think is consistent with your guidance. I wonder when shall we expect share buybacks to start if they can also start before October? And ultimately, what does that mean for your dividend per share from here? You're set to pay $0.86 dividends in about a week or so. So your expectation for [ DPS ] this year? And lastly, if I may, just a quick clarification. You've given us a clear view of the phasing of your synergies for this year. What is the related integration costs that you're looking to book in 2026? Thank you.

Thank you for the question. So as I was mentioning, the trend in terms of fees are quite positive. Sorry, we have again, a program with the microphone, and I apologize. So as I was mentioning, the trend from commercial point of view is quite positive because the strength of our franchise is, day by day, confirmed. And so we are, again, quite positive regarding the trend of fees and commission. And we expect to have a trend that overall will be in line with the pace that we are reporting in the quarter. As usual, if we take in consideration the third quarter, the August month, we can have probably the usual seasonality. But overall, this trend will continue, and we are going to have a path that together with the franchise -- both franchise, Mediobanca and Monte Paschi will support the growing trend that we are already reporting in the quarter. As far as interim dividend, it's clear that we want first to complete the merger, then we will consider it potentially, of course, and as far as dividend, I think we were already mentioning that we want to have a dividend level broader in line with the one of this year that, as you mentioned, we are going to pay in 10 days from now. And clearly, as we were mentioning, we will provide the additional contribution to the total remuneration in addition to the profit with the buyback that we were mentioning already in the time of presenting the plan. So dividend remuneration -- total remuneration of shareholder, we feel comfortable to confirm. And then clearly, we are going to have an accretive trend from the next year according to what has been already said in the plan. Integration costs, we plan originally to have around EUR 300 million of cost, and we believe we can stick to this expectation.

The next question is from Elena Perini of Intesa Sanpaolo.

Yes. I've got three questions. The first one is on your sensitivity to interest rates, if you can update us on numbers. The second question is about your wealth management. We saw that you started to sell Mediobanca SGR products to your network. You also have a strategic partnership with Anima. If possible, would you elaborate on which kinds of client segments are you going to serve through the 2 SGRs? And about Anima, Banco BPM mentioned the possibility to open the capital of its control company to other partners, would you willing to consider this possibility? My final question is about your Generali stake and next year, expiry of the JV with AXA. What kind of thoughts are you making about your insurance business considering the stake in Generali and the deadline that you have next year?

Good morning. On NII sensitivity, let me reiterate what the CEO has already mentioned. When giving the presentation, the current sensitivity to -- of NII to a parallel shift of 100 bps of the curve is around EUR 50 million at group level with slightly above half of this amount related to Monte Paschi and the rest related to Mediobanca.

Okay. So I was mentioning, and I think this is a positive element of the integration. Clearly -- let's start by saying that Anima is strategic pattern for us. And we are keeping -- growing in the cooperation and reaching the product's wallet that Anima is providing. And we have to say that this is a trend that we believe will continue having this kind of long-term partnership with them. And for the time being, we stick to the partnership, commercial partnership and we are focused to implement our plan that count a lot on the contribution coming from the partnership with Anima. Having said that, I think that the SGR Mediobanca is providing specific kind of products that we were distributing to our network to specific kind of customers. So something that is not [ steadily ] comparable with the product -- that products that we have with Anima. And I think this kind of offer that we are providing to the product of SGR is not competing with the products that we have with Anima. As far as Generali, I'm just sticking to what I used to say that it's nice to have is an important uncorrelated part of revenues in which we count. Generali is giving also additional optionality in terms of operational partnership. So it's clear that we are considering all the opportunities that we can have on the market in terms of product offer, in terms of partnership. As for us, what is really important is the value creation and to provide to our customers the best offer in terms of product combination and to ensure sustainability to our results. So as I want to say, nice to have a Generali stake.

The next question is from Giovanni Razzoli of Deutsche Bank.

Well done with the Q1 results. Two very quick questions. The first one is on the volumes, lending volumes in the CIB and consumer of Mediobanca. They were very, very strong, both of them within the first impacts of the synergies. I was wondering whether you can give us a little bit of outlook for the next couple of months on those trends, in particular, what is the [ big ] pipeline also for the investment banking going forward? And what's your view also on the volumes on corporate and the consumer? The second question relates to the dividend of Generali. It is 20 basis points of reversal to the CET1 once Generali will pay its dividends or your pro forma CET1 ratio will be above 16%. And I was wondering whether what is the state of the art of the application for the Danish compromise? Have you already submit the request and what is the reasonable time frame to see whether we can roll Mediobanca set up to the parent company?

Okay. So -- thank you, Giovanni. And as I was mentioning, really, what is an important element of -- as a result of this integration with the strong operation that we have between the CIB, I mean, advisory services in Mediobanca and our mid-corporate and even large corporate Monte Paschi customers, right? Because -- and I have to say that this is one and some way also surprising for the speed we are getting this kind of cooperation is something that is tangible in the every day, I'm hearing about meetings that the two teams are having with customers. And I think the trend can only improve despite we already are reporting important results. So Mediobanca by tradition is present in all important deals, and we'll keep going and being present because we have exceptionally high quality level of professional there. But now they can also enjoy the fact that we can go to customers and support customers with the balance sheet of Monte Paschi. And this is a win-win solution that is making the bankers of Mediobanca and our relationship managers very close day by day in trying to explore all the opportunities. And one of the key elements of this positive integration is coming, especially in the mid-corporate sector, where Monte Paschi quite strong. Mediobanca is quite strong because also there, we have top talent bankers, and I believe this is a unique opportunity for growing. And we will see the volumes growing as well the fees, I mean the advisory fees coming from this activity. So quite positive trend, I believe, from now on.

So Giovanni, on the impact of Generali, yes, the Generali participation brings some seasonality to our capital trends because you have deductions as you accrue net profit, and then you have capital release as you are paid dividends. By the way, this is valid not only for Generali, but also for our insurance JVs with AXA even if, of course, on a smaller amount. Then on your precise question, the net expected impact from Generali in the second quarter is around plus 30 basis points. Then on the Danish compromise, we are submitting a question to the EBA.

Sorry, Andrea, can you remind us the benefit of the Danish compromise, please?

On the Danish compromise, we are submitting a question to the EBA to, let's say, validate the potential approach.

The next question is from Sofie Peterzens of Goldman Sachs.

So my first question would be on M&A in Italy, I know you are in the middle of the process of integrating Mediobanca, but how do you think about M&A in Italy and kind of opportunities here in the next, I don't know, 12 to 24 months? And then my second question would be I saw that the variable compensation was lower for Mediobanca this quarter, and that has drove some of the gross improvement this quarter. How should we think about the variable compensation going forward and what you can do on the cost side? And then just finally, a very short question. How should we think about the tax rate going forward? What's the normalized tax rate for MPS?

Okay. So I was already mentioning since last year when we start the transaction of Mediobanca that I believe [ size ] matter in banking. And this is a process that is [indiscernible] so for sure, there will be a further phase of consolidation. Having said that, it's nice to be in a position where practically we feel that we can be clearly a key factor also in this field, thanks to the position we reached in terms of capital, capability to generate value, capability to remunerate our shareholders and at the same time, having a significant buffer in terms of capital. I mean that we believe that we should be focused at the current stage in completing our integration process, ensuring that the synergies we had in mind will be concretely and clearly realized. Hopefully, even above the target we fix to ourselves. And that's why at the current stage, our focus is exclusively in deliver what we promised to the market.

Hello. On the other two questions. As regards the operating cost trend. Actually, our guidance on [indiscernible] factors in a slight growth year-on-year of operating costs. And then, of course, on a quarterly basis, there might be a small [indiscernible]. On tax rate, at the moment, let's say, our best estimate is around 32%. And this might slightly vary depending on the contribution of the Generali net income to the bottom line because the higher the contribution, the lower the weighted tax rate. But at the moment, our best estimate is around 32%.

The next question is from Luis Manuel Grillo Pratas of Autonomous.

My first one is on the 2026 NII, whether you could provide any guidance on NII. Then I have a few clarifications. On the tax rate, you just mentioned 32%. Could you also confirm what would be the tax rate before any income from associates, including Generali? And then I also noticed that the DTA fees this quarter were only like EUR 1 million negative, much lower than the run rate book last year. I wanted to confirm whether this is a new run rate?

Okay. So net interest income I believe we can confirm the guidelines we provided at the beginning of the year. The trend is expected to be positive. And so we think that the contribution in the coming quarters will be above the contribution that came in the first quarter, mainly driven by volumes grow and also effective management of spread, particularly, we believe that we can have a tight control also on deposits.

So on the tax rate, actually calculating the taxable income, the tax rate or what is not related to Generali is around 36%. But then when you make calculations, you should take into consideration that some part of the taxable income of the group is abroad. And then the PPA impact is already net of taxes. So this makes calculations slightly more complicated. On fees, on convertible DTAs, for the time being, let's say, the guidance is confirmed. Here, this is a benefit deriving from the consolidated tax financial statements with Mediobanca. Then the 2026 amount will depend on the amount of taxes paid in the year while from '27 onwards, the number should be close to 0.

The next question is from Noemi Peruch of Morgan Stanley.

I have a few. The first one is on Generali. So in which scenarios would it make sense for you to sell the stake? Then the second one is on capital. You mentioned the question to the EBA. So I was wondering how long you think this process could last? And what's the sense on the -- of the ECB on this from your dialogue? And then finally, a few questions on the private banking still. So in your press release, you mentioned that the exit were mainly on the first part of the quarter. And I was wondering if this is the same for deposit and outflows and new money outflows. And if you can give us an update in terms of deposit volumes in the Private Banking in Mediobanca in May. And finally, if you could give us your estimate of the outstanding outflow risk related to the bankers that have already left from Mediobanca.

Okay. Honestly, I think I'm so focused in accelerating the integration process that I wouldn't -- I didn't even think in which scenario can be logical or profitable to sell the stake of Generali, so I believe this better if I postpone this kind of consideration because now what is important for us is to be focused on commercial activity. As I said, it's nice to have a contribution as of this quarter, EUR 130 million coming from this stake and potentially to think also on some business cooperation with them. Taking the point regarding -- relating to private banking is really important to consider that in economic terms, the impact of bankers that left are quite marginal, being a significant portion of savings in some way, part in current account or in a very low margin products. So I believe that we can expect some additional, probably, decrease of -- or, how to say, decrease of volumes, but I believe is what we consider a normal trend in each situation together on some flow that we are going to lose. As I mentioned before, we have significant new money that is coming. And I strongly believe that the actions that were put in place and the people that we have in private banking will already adopted measures in order to have the trend of the stock growing from now on. And I think this unique model of private investment bank that Mediobanca enjoys something that can provide further benefit for the stock of savings on private banking. And this is what I mentioned before already, I was informed that we have important that money coming just for few liquidity events connected with some entrepreneurial deals where Mediobanca is playing the role of advisory in terms of entrepreneur at the same time, the role of getting the benefit of the money that is coming from the sale. So I believe the situation is normalized. And as I mentioned before, from now on, I see that we can just observe some natural situation that each bank that has a private banking division is in some way notice, right? It's important to underline that the first quarter was a particular quarter. And now from mid-April situation definitely is under control and we'll keep improving in terms of assets.

And on the EBA?

On the Danish compromise, [indiscernible] the Danish compromise. I mean, based on past experiences, it might take some months to get an answer where submitting a question in the next few hours. And the ECB will provide their stance to EBA and that we will -- as soon as we get a feedback a formal feedback, we will give disclosure to the market.

The next question is from [ Manuela Meroni ] of Intesa Sanpaolo.

The first one is on the NII. The NII trend was positive in this quarter because it was up quarter-on-quarter despite the fewer days. You mentioned in the press release a contribution from hedging derivatives, so I'm wondering what was such a contribution? And if you expect this contribution to accelerate in the next quarters? The second question is on the cost of risk, 42 basis points in this quarter. I'm wondering if you have seen some deterioration of the asset quality after the end of the quarter. And if we can take this 42 basis points as a guidance for the full year? And finally, a clarification on danish compromise on the previous question. If I remember correctly, the expected benefit from the danish compromise was 50 basis points. I'm wondering if you can broadly confirm this figure.

Okay. I will start with the asset quality. We didn't observe any signal of deterioration. Situation is, how to say, from the beginning of the year are almost the same. So we feel comfortable to confirm the guidelines we gave with the cost of risk that we said at the level not higher than what we are observing in the first quarter.

And on the other two questions. On hedging, this is part, let's say, of our overall hedging strategy that led to a reduction of the NII sensitivity. So we expect I would say, stable contribution over the next quarters from this hedging strategy. While on the Danish compromise, yes, I confirm we have always given a guidance of around 50 bps positive impact.

The next question is from Luigi Tramontana of Kepler Cheuvreux.

Just one question left on the PPA, approximately EUR 60 million this quarter. If I remember well, you gave guidance for the full year of EUR 100 million. Are there any one-off in this quarter? Or do we have to expect a higher impact for the full year?

So yes, on the PPA, let's say, we said that on average, over, let's say, the PPA amortization period, we expected EUR 100 million per year, again, on average. And then the time distribution would depend on the amortization of the relevant assets and liabilities. Actually, the amount is expected to be slightly higher at the beginning of the period, so in the first and second year compared to this average. And this is the first point, of course, the cumulative amount is the same. The second point is that in this quarter, yes, there was also a bit of seasonality because a good chunk of the PPA reversal was driven by prepayment on consumer loans even if, let's say, the overall stock amounted despite the very good commercial performance.

The next question is from Andrea Lisi of Equita.

Some clarifications. The first one is if you can provide us a guidance and an evolution of the integration charges. So should we expect it mostly in second quarter, third quarter? And if you confirm the EUR 300 million of these integration charges for the year? The second question was on the capital dynamics. If on top of what you have already highlighted during the call, so related to the reversal of Generali effect, should -- and the movement of the OCI reserves should respect also other elements not still highlighted in the quarter dynamic particularly considering obviously normal risk-weighted asset increase related to volume growth and so on? And the other question is on volumes. I saw that they increased quite well also on the Monte Paschi perimeter stand-alone. So if you can provide us an indication on what you expect going on and as well on deposits, which are your expectations?

[indiscernible] So on the first two questions, integration charges, we would expect them in the second half of this year because, let's say, their booking, of course, is strictly related to the implementation of the relevant actions. And as regards to capital dynamics, in terms of moving parts, of course, there is a DTA utilization and then the other main driver is related to the RWA growth. In particular, I can anticipate that in the second quarter of this year, we expect a small increase of EUR 400 million of RWAs related to the implementation of a model change in Mediobanca.

So volumes is clear that integration and synergies that are coming, integration counts. A lot of the contribution of consumer loans. That's why we believe that we will observe a growing trend up to the end of the year as a result of effective commercial activity that compass traditionally as in the coming quarters and also some synergies that will come according to our plan because a significant portion of synergies are coming from -- in the area of retail banking where we allocate also from a logical point of view, the consumer lending activity. So combined with consumer lending, we expect to have a growing line at least with what we reported in the first quarter for mid-corporate also with some deals. But clearly, our focus is what we believe is sustainable. So retail mid-segment and then corporate connected with additional business can [ come ] by getting turnover from the customers. So the natural growing trend as a result also of gradual implementation of the synergies we expect, particularly in consumer lending.

Sorry, a follow-up on deposits, what are your expectation?

Sorry. I was -- I forgot about that. It's clear that for us, we consider deposits like a raw material for an industry for us are key. Clearly, we have to manage a trade off so while on retail and small business is crucial to our deposit, we have a tactical approach as far as a large corporate where the trade off between price and volumes are always taken in consideration, as you see, we don't have an issue in terms of liquidity. That's why I have to say retail and small companies, the trend should be growing as this is not affecting particularly the spread while on large corporate, we will see time to time. But anyway, in general terms, we expect deposits to grow.

The next question is from Hugo Cruz of KBW.

I have quite a few questions. So first, on the NII, your sensitivity seems quite low. And given that everyone expects rates to go up this year, I was wondering how we could see that playing out in your NII line. So when could we see a positive impact from the higher rates this year, assuming they happen in June? And then if you could increase your sensitivity over time to take advantage of these rate increases? So that's the first question. Second, on OpEx. I was wondering retainers, is there anything booked already? I think your guidance for the full year was clear but I was wondering if that includes some sort of one-off costs with retainers either already in Q1 or later in the year, if you could quantify that. Then a question on the PBT guidance above EUR 3.5 billion. Is that before or after the restructuring costs? And then finally, the interim dividend, I understood that you said you could pay an interim after the delisting of Mediobanca. I'm not sure if that means there could be an interim already this year or not? So if you could clarify that because I think the market is already pricing in the interim for this year. So that's it. Thank you.

So I'll try to answer and maybe not in the same order. So the first question -- sorry, not the first question. One of the questions was on the guidance on PBT, whether it was after restructuring charges. Yes. it is after restructuring charges. Then on costs, there was a question on whether the -- in this quarter, we were factoring one-off costs. There are some -- there are a few millions related to retention charges, but they are booked in integration cost, so in the integration cost line. Then interim dividend after the listing, we -- let's say, we are, as mentioned by the CEO during the presentation, we are, let's say, delivering on our time table. As regards to interim dividend, when we present the first half results, we will take a view whether when to start paying interim dividends, so whether this year or not. On NII sensitivity, yes, I mean, we are managing proactively, let's say, our hedging strategy, considering particularly the amount of new business that we grant every quarter. So we actually are in a position to benefit of the increasing interest rates.

The next question is from Lorenzo Giacometti of Intermonte.

I have actually one question and one follow-up on capital. So the first question is on synergies, can you remind us what are the business area in which you basically -- which the majority of synergies will be extracted? And given the working groups already in place, are you seeing some upside potential or downside risk from the overall number? And the follow-up on capital is that -- I mean, can you confirm that the Danish compromise positive impact on capital is not included in your capital transactions for the next year? That's all. Thank you.

Okay. So synergies. Most of synergies are expected to come from retail and commercial banking. And I believe they account approximately for 50% of the total. Then we have an important contribution coming from corporate investment banking, as I was mentioning, even above what we were originally expected we originally, we planned close to 20%, and I think the contribution can be even higher. And clearly, asset gathering and wealth management, additionally, we will have a contribution can be even around 15% and then the remaining is connected also with private banking, especially if we consider the activity of private investment banking. So overall, this distribution can slightly change, especially if we are observing this positive trend on corporate investment banking, but this can be also on the top of the [ 700 ], if we are capable to accelerate even more than what we are doing now, this kind of cooperation full fledged service that we can provide to our -- especially mid-corporate customers. And I will take the question, Andrea. So positive impact on Danish compromise is not considered in any of our projections as we were clearly mentioning the time of presentation on our business plan.

Mr. Lovaglio, there are no more questions listed at this time, sir.

So thank you very much to all of you and looking forward to meeting you again in August. Thank you very much.

The conference is now over, and you may disconnect your telephones.