Banco BPM S.p.A. ($BAMI)

Good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the Banco BPM Group First Quarter 2026 results presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Arne Riscassi, IR Manager of Banco BPM. Please go ahead, sir. .

Good afternoon. Thanks for joining the conference call. Q1 results will be presented by our CEO, Giuseppe Castagna; and our Joint General Manager and CFO, Edoardo Ginevra. Let me remind as usual to limit, please your yourself to questions maximum. Now let me hand over to Mr. Castagna. Thank you.

Thank you, Arne. Thank you, everybody, all people who join our conference call. We are happy to present a very strong set of numbers for Q1 '26 solid start, I would say, a compelling business model in action because we are following exactly the path that we presented last year with our updated business plan in February '25. Profitability grew to EUR 480 million of net income with royalty and ROE in line at 20% and 15%, in line with our planned target for 2026. Also common equity Tier 1 is very solid, 13.6%, with an MDA buffer of over EUR 400 million. We will see going forward that Common presents some very good surprise going forward and reaching almost 14%. The key driver, as envisage in our business strategic plan is the benefit -- the benefit coming from the development of the product factories. As you can see in '25, we had a contribution, average contribution over the quarter of EUR 377 million now in the first quarter is EUR 406 million. And the target -- the quarterly target for this year was EUR 400 million. So we have already above the target. Let's only have in mind that when we started the plan, the contribution from product factories was slightly above EUR 200 million in 2023. Of course, always as a quarterly average and EUR 242 million in 2024. So a significant announcement already in line with the trajectory of 2027 in which we use to reach EUR 430 million per quarter. But also since [ Anima ] injection, of course, the was a significant improvement of the organic performance. If we go to the pretax results of Q1, we have a bettering of almost EUR 90 million coming half of this from higher non-NII revenues, particularly commission and contribution from product factory and the remaining 50% coming from lower operating costs, almost EUR 23 million and lower provision for over EUR 30 million. So a significant progress vis-a-vis our targets. On Page 6, a slide, a quick reminder of the most important voices in terms of revenue costs and cost of risk. Revenues grew more than EUR 100 million always on average. Quarterly average of 2024, bettering also the average of 25%, considering, of course, that ribs reduced vis-a-vis both years, '24, the [indiscernible] average was 3.5%, 25% was 2.2%. And we also confirm the enhanced efficiency in cost management. in which we were able to reduce cost income from 47% to 44%. In 2 years and from 46% comparing to last year. We also reduced a sharp decline in total provision going down from EUR 137 million on quarterly average and EUR 24 million to EUR 78 million for 26 and last year was EUR 100 million, the quarterly average for 25%. The cost of risk has been reduced from 46 basis points to 32 basis points. And talking about effective credit management. We see here the evolution that we had. Of course, in particular, starting in the first year of our merger. But following this part, we have been able to further reduce gross NPE ratio to 2.1%, which is in line with the average of Italian banks and also European banks, which is 1.8%. The gross NPE ratio was down almost EUR 600 billion a year, less 21% from last year. And if we go to net NPE ratio, we are down from 1.5% to 1.1% in the last 12 months. If we see the net NPE ratio without excluding the NPA guaranteed from the state, we are down to 0.6%. And if we consider only the net bad loan, excluding the state guarantee, we have down to 0.1%. This is the demonstration that we have been changing the quality of our portfolio since the pandemia we have here showed that since 2021 the average default rate year-by-year was below 1% with a record 0, 68% in the first quarter 2020. we really believe there is the demonstration that our portfolio is a very solid quality. Also, the Stage 2 loans were down in 1 year from almost 9% to 7.5%. On Page 8, I will just say that we have been able -- were able to maintain to 13.6% the common equity Tier 1 but again, we will go more into detail at the end of the presentation on capital and the vis-a-vis the REP requirement, we have an MDA buffer above 400 million -- 400 basis points. Let me remind that, as I was mentioning before, we will see that if we can see the figure at 30th of April considering the recovering of the frail other comprehensive income, we are almost at 14% of common ability as well. Since highlights about the profit and loss. We have a comparison with year-on-year and Q-on-Q. Good results in terms of net interest income, even, of course, with a slight reduction Q-on-Q, the effect is completely offset by the 2 days effect today's less effect of Q1 26 vis-a-vis Q4 25 which account for a lower EUR 7 million. Meanwhile, of course, the comparison with Q1 '25 is impacted by [indiscernible] which was 50 basis points higher vis-a-vis Q1 26. Good increase instead, plus 3% Q-on-Q in net fees and commission and the solid contribution coming also from income from associates as well as income from insurance. Core revenues were in line with last Q 205 and slightly below year-on-year. Net financial result was better than last Q 25 million, EUR 25 million positive versus EUR 49 million negative in Q4 '25 in thanks both to the effect of better results from NFR and a reduced impact of cost of certificates. Thanks to that, we have total revenues, which increased almost 4% Q-on-Q with a reduction of 2% year-on-year. Operating costs down 3% on a quarterly basis and 2% on a yearly basis, mainly due to reduction of cost of personnel, but there were good tenors also of administrative costs. Pre-provision income is 10% above Q-on-Q and 2% negative year-on-year. After total provision, which were down 50% on last Q '25 and almost 3% on Q1 25, we have, again, a profit from. Pretax profit, which is 25% better Q-on-Q. Then we have the increase of the impact coming from the new taxation, which made the contribution paid for taxes as much higher as EUR 278 million compared with EUR 185 million of Q4 and EUR 262 million leading to a net profit above EUR 500 million, 15% higher than December '25 and 6% lower than Q1. Let me remind, of course, that Q1 '25 is a pro forma, which includes the contribution of Anima, which instead was not present in Q1 '25 because, as you know, started to be consolidated in Q2 '25. So it's a just a pro forma to compare the same perimeter final result, net result, as I mentioned, is EUR 480 million, which is 15% above last quarter. We have also on the right side of the page show the positive progression that we register since the acquisition of Anima comparing the last 4 quarters. And as you can see, both in total revenues, cost income, loan loss provision and pretax profit, we have always registering a bettering of the result with some very positive outcome. Going very quickly on some of the items. NII, again, was down 21% vis-a-vis Q4 '25, but the EUR 70 million effect would have offset completely this reduction while we have a reduction of EUR 30 million, but with a river, which was a 50 basis points above the current Euribor. NII, full funding costs were basically at the same level in all the 3 quarters, we are examining. On the right side, you see the evolution of the drivers of net interest income, leading to EUR 751 million, mainly due to the effect Meanwhile, you can see that we had a good results from the commercial spread almost in line with Q3 '25 at almost 2.9% of asset spread, basically, half of them coming from as spread end up from liability spread. Let me just anticipate that in April, the 2 spreads are going to widening. Meanwhile, we are more or less keeping the asset spread, we are increasing the liability spread, thanks to the increase of the river. Let me remember that we have also sensitivity, which stood at EUR 150 million with a replicate import portfolio which is slightly above our guidance of EUR 25 billion, but is due only to the anticipation of some maneuver, which is going to expire during the second part of the year. Meanwhile index or current account remains stable at 37%. We A good news is coming from lending activity. Although, as you know, the macroeconomic does not bring to support the decision of investing for our entrepreneurs, we were able to reduce EUR 1 billion of increase in stock of lending almost completely coming from nonfinancial corporates and lending, which grew 2%. And on the -- so it's the first signal of recovery. Of course, we cannot say that with the current geopolitical situation is a clear signal of going up, but good news to see after some quarter of reduction, the first time a positive number as an increase in loan. On the right side, you see how the bettering of our portfolio, how much is allocated in the right region of Italy. Both split in total loans, nonfinancial corporates and the part of nonfinancial corporates related to small business. As you see, the more smaller the counterpart, the more increase securing packaging that we take for our -- for granting loans. If you go to the state guarantee secured loans, we see that we go from a total of 19% growing to 26% for nonfinancial corporates, which for the small business increased up if we couple this 41% with the collateralized loans will go up to 63% of secured loans for small companies. Let's have a look compare '13 on the total net fees and income from insurance. Let me say that we managed to reclassify all the quarter we showed in this page and all the numbers that you will see in our enclosed slides, that the cost related to synthetic securitization are now reclassified to other operating items and are not anymore into the net fees and commission. But this is, of course, pro forma for all the quarter we examination. And talking of that, you can see how the strong contribution from net fees and insurance make the quarter contribution passing from EUR 630 million to EUR 150 million with also an increase from EUR 687 million to EUR 710 million talking only of contribution from fees. The vast majority of this contribution is coming from investment product fees, which grew 8% Q-on-Q split above contribution coming from an from upfront fees and from running fees. As usual, Q1 brings a strong contribution also from upfront fees, but is a sort of seasonality effect. The investment product placement was as much stronger as Q1 '25. Let me remember the Q1 '25 was the strongest quarter in terms of contribution from investment product fees due to the special effort that our network was doing during the first months of the starting of the hostile offer from UniCredit. So we managed to confirm that the capability of the network also without any kind of mess is a very trained to perform very good results apart from the EUR 6.7 billion of investment in product place, and we managed also to sell to our clients, EUR 1 billion in March of BTP issue. In terms of other fees contribution, we have a reduction of 2% Q-on-Q. Mainly driven by 2 items. The first one is the termination of the eco bonus scheme fiscal credit discount that banks managed to perform both in '24 and '25 and now is not anymore there even though the effect of the fiscal effect is still giving advantage to the bank, but not in terms of more commission. The real reduction was coming, although from the lending activity and particularly from the specialized lending activity structure such finance activity, which in the first quarter, 25% was at a record level and now is at a more consistent level of EUR 75 million. I would say that this is contributing to the specialities for EUR 75 million. I would say that this would be more or less the contribution we expect also in the rest of the year although we have experienced this growth in volume that we showed in the page before, demonstrating that there could be depending on the geopolitical situation, also strong recovery if the situation is going to normalize. In terms of total customer financial assets. On Page 14, we had -- we registered a reduction both in terms of volume of Banco BPM itself and in terms of Anima contribution due especially to the market effect, of course, coming from the reduction of the value in the first Q of 2026. As far as [indiscernible] is concerned, there is also a reduction coming from the termination of an agreement with Ateca, which was known since January '25, and is producing some effect in reduction of financial assets managed by Anima. Notwithstanding that, the contribution from Anima is bettering. As you can see on the bottom right side of the slide, Anima contributed to the BPM Group's P&L for EUR 143 million of total revenues level plus 4.7% vis-a-vis Q1 '25 pro forma, of course, and EUR 56 million in terms of net income level, 23% higher than Q1 pro forma EUR 25 million. On Page 15, we have the good results coming from the tenure of. And the rigorous cost discipline applied by the bank. We have a reduction of 3.7% in total operating cost, which is 4.7% from staff cost due especially to the savings coming from the solidarity fund exit which were quite massive in Q4 '25 and also reduction of 1.8% Q-on-Q related to ASA and DNA. . Finally, on Page 16, cost of risk is down to 32 basis points. As I mentioned, we managed to reduce the stock grows from EUR 2.75 billion to EUR 2.18 million, 21% year-on-year with the ratio, which has been reduced to 1 as gross ratio, 1.13 as a net ratio. Remember that net bad loan ratio is down to 0.4% and I don't repeat the effect if we exclude the loans guaranteed by the state. But as you remember, we are down as far as net bad loans to 0.1%. On the right side, some good number about cost of risk, down from 40 basis points default rate down to 0.68%. A very positive cure rate in Q1 up to 9.78%. And especially the coverage of total NPEs increasing to 160 basis points as total coverage and 240 basis points if we exclude NPE with state guarantee, let me remind that bad loans, excluding NPEs with state guarantee are covered up to 80%. So really without any further potential risk coming from these assets. I leave the word to Edoardo Ginevra for Page 17.

Thank you, Guiseppe. So a quick look at the financial components of this quarter. So the first part that is illustrated in this slide is related to the evolution of our negative reserves on debt securities, which on a net basis has been worsened by EUR 30 million from December to March due to the volatility that happen during the third month of the quarter. Now this amount is again almost aligned with the level as of year-end of April, it was EUR 300 million, EUR 36 million. So very similar to EUR 299 million that we experienced 3 months ago. BPV went down. So the level of our absolute exposure to interest rate risk went down in the favorable company income portfolio from EUR 2.4 million, EUR 2.6 million. This is only to a very limited extent, represented by Italian government bonds less than EUR 700. Why is that? Because with an overall level of the portfolio almost unchanged, EUR 47 billion we have reduced the percentage represented by fair value other company income to amortized cost accounting for 71% Italian [indiscernible] within the overall banking book represent only 38% of the total, so with a constant share in the last quarter. On the right part of this slide, the net financial result improved significantly versus Q1 '25 from EUR 15 million to EUR 25 million. This is due to the structural improvement of cost of certificates in the first quarter last year to EUR 27 million, mostly driven by the decline in viable scenario. Other components went down from 66% to 52%, but 66% of last year was influenced by some one-off elements was this year it's very important to note the contribution of global market activities and the dynamic management of our market positions. Then all of these elements translated into capital with the dynamic that is shown on Page 18. So after accounting for the headwinds related to Basel III the starting point is 13.49 and after accounting for these 9 basis points of headwinds. 88% positive basis points came from the performance in the P&L of this quarter, 75 basis points is the absorption of cargo from dividends and 81 coupons only 19 basis points despite the strong volatility in the market has been absorbed by the reduction in reserves for vet comprehensive income, which, as we said have been then reversed in April. Contributed positively for 18 bps and address the various other elements are negative for a modest amount of bps which is the level of common equity 1 ratio as at the end of March would become almost 1.98%, you want to note the number, the exact number. If you consider fair value comprehensive income reserves on debt and equity holdings at the record date of April 2026. So as a pro forma level. NDA buster is above 100 basis points and MREL buffers, are at 469 basis points to 4.69 percentage point use as reference the total requirement for 37 is the subordination requirement. A final point to mention in this -- for this slide is that we still continue to have an amount of capital that is of a potential capital that is to be created during the plan horizon, thanks to the contribution of reserves on [indiscernible] comprehensive income and DDAs according to our forecast, this translation of potential into actual capital would account during the plan horizon for 120 basis points, whilst overall, taking into account also the rest of the capital to be created even out of the plan horizon beyond 2027, this amount is higher than 200 basis points. Now for the final remarks. So let me leave the floor to Guiseppe.

Okay. So on Page 20, some check about the guidance and the outlook for 2026. As you know, we have out the previous plan that we confirmed in 2016 last year, just 1 year ago in February 25, which was above EUR 1.9 billion for EUR 26 million. Let me say that Q1 results are already in line thanks to revenues already in line by line and over performance in net fees and commission. As far as costs are concerned, we are instead well ahead our plant trajectory both in operating costs and in cost of risk. So although there is a higher impact from the tax headwind that we can say that we have almost recovered all the gap generated by the taxation. As you may remember, we confirmed the guidance for '26 before tax. Now we -- I think we are in line to say that we are very confident to be able to reach the target for '26 already this. Let me say that, for sure, we confirm that the deliver of EUR of dividend per share is confirmed for 26, which at today level, correspond to 8% of dividend yield. Looking ahead to 2027, as you know, we have a plan which terminates in 27 we have a target of EUR 2.15 billion. Also in this case, we feel that we have not already reached the lag in 2016, but in a positive trajectory which give us a lot of confidence in terms of reaching the target for 2017. We just mentioned some of the key numbers here. The increase of non-NII revenues above 50%, which was the target now is 53%. Still, we are not in full power with all our product factory the net NPE ratio, which is down 0.5% vis-a-vis the target 27%, and the availability of a buffer of common equity Tier 1 which is going to improve, thanks to managerial action and WA coupled with basis point, what dad was mentioning coming from DTA reduction. So we are confident to overcome the EUR 7.7 billion of curative net profit for the 4 years of the plan. We're reaching the promising trajectory leading EUR 150 million for '27 and leaving us the room to going above the EUR 6 billion of cumulative distribution target, which we presented last year in February '25. All the indicators are very good, both in terms of P&L and our capital strength which, of course, can also enable us to overcome the distribution through new issue. New measure to decide at the end of this year. Thank you very much for your attention. I leave the floor for your Q&A session.

[Operator Instructions] The first question is from Giovanni Razzoli, Deutsche Bank.

Two questions on my side. The first one is on your CT1 ratio of 13.6%, which actually reached 14% in April, you mentioned. So it's a very good level about my expectations. I was wondering whether with this level of capital if this is confirmed going forward, you can consider resuming to your share buyback plan that you have put on hold last year. And connected to this, I've seen that the lending growth was a little bit low 1% year-on-year on house corporate. Can you give us a guidance for the full year so that we can have also a better understanding on how the CET1 ratio can evolve in terms of also risk-weighted assets expansion? And the second question related to the Slide #13, especially in terms of fees. In my view, the fees were pretty good better in terms of investment fees -- there was a restatement as far as I understand. So you have changed the representation of the fees, removing the cost of the securitization from the fee income line, if you can share with us what was the impact in this quarter? It seems to me that this is a trend representation that is in line with other peers. So if you can also confirm this. And regarding the investment fees, I was wondering if you can provide us also an indication on how is April evolving because the trend of the Q1 was very good in mind.

Thank you, Giovanni. So of course, we are very happy to have in April, 14%. Of course, this comes from the volatility of the market, but it's going back to the number we had at the end of the year. So we are quite confident that this could be the road map towards the end of the year. . We are very happy because this was one of the questions that many brokers were asking about our common equity Tier 1 strength, I think that coming back to 14%, as you may remember, after overcome the deli of the Danish compromise bring us to the same level also having had the burden of the non-Danish compromise port. So very happy about that. let, of course, terminate the years, as we were saying also last year in order to consider what we can do about the excess of capital. On fees, of course, as you were mentioning, there is this restatement is in line with our main competitor. Frankly speaking, it's not something related to the capability of selling products to our clients. So we decided it's better represented into the other cost rather than into [indiscernible] And I confirm that average on the last 5, 6 quarters has been consistent in line with the EUR 20 million.

Next question is from Manuela Meroni, Intesa Sanpaolo. .

First question on the NII, you said to expect an NII in line with the 2025 exit level. That means to a bit lower than EUR 3.1 billion. I'm wondering if you can share with us the main moving parts in terms of volume, margins and the contribution of the replicating portfolio. The second question is on consolidation. One of your competitors this morning said that Italy is a fact banking market and its consolidation. I'm wondering if you could want to share with us what are your thoughts on the consolidation in Italy and the role that Banco PN can play in it.

So on replicating portfolio NII, yes, we guided towards an overall level of NII, which is similar to what we had in last quarter of the year, being in mind potential evolution of the underlying drivers. And in particular, concerning volume, we expect to continue to have moderate growth in loans and to come back to an average level of deposits, which is, again, with increase versus the level we had in December. So moderate positive contribution of volumes and potential tailwinds coming from level of rates and in particular, from the expectation of Euribor Central Bank hiking rates during the next -- during the current quarter during the current part of this year replicating portfolio, we have -- I was about we have a level of replicating portfolio, which is at EUR 28 million, EUR 3 million above our target level. This is because we took the opportunities of the shape of the yield curve during the first quarter to anticipate some maturities of the replicating portfolio, keeping anyway the target level the same EUR 25 million that we used to have since we approved the previous plan. So this means that over the rest of the year, we have maturities in this portfolio that we will not renew. So coming back to the level of EUR 25 million, other things equal. We may, of course, reconsider this policy, the strategy depending on the evolution, not only of the absolute level of rates, but also the yield curve. Okay. About consolidation, of course, yes, we feel we are in the best place to catch the potential opportunity coming from an eventual consolidation -- further consolidation of the market. We had a lot of consolidation last year, some of them also related to bank with the acquisition of Anima and the other acquisition of Monte [indiscernible] of course, there could be room for something more is not only from one bank to decide exactly what to do. we think we are in a good position to understand where the market would generate opportunity for us for sure, we are in a strong position in terms of capability, having already realized a very good transaction years ago. We have now at the plenty of our capability in terms of reaching the profitability we promised last year. We, of course, have also a lot of small consolidation potentially to do related to capability distribution, which would emphasize our product factory. So there is a lot to go. We are looking to everything, big small opportunities in terms of banks, in terms of other factory to join to our factor in terms of distributors of our product factories. So it's difficult to say which one will materialize, which one will give the best opportunity for our shareholders. For sure, we are considering and starting all the situation in order to take advantage from potential availability from other counterparties.

Next question is from Delphine Lee, JPMorgan.

My first one is just to go back on fees and commissions. So it looks like -- I mean, the trends in Q4 in Q1 were definitely better Q-on-Q, but the year-on-year comparison seems to be somewhat a little bit weaker than what we have seen with peers. . If you could give us a bit of color what you expect in the next few quarters in terms of trends on a pro forma basis, clearly, after the reclassification. And then my second question is just to go back on M&A. Previously, you were talking about the M&A options with [ Cariparma ] with the Park, is this still kind of priority for you? Is it something that you're actively looking? And if so, sort of what shape and form would you like to see? And what would be your sort of kind of ideal scenario in terms of value creation?

Thank you, Delphine. As far as the first question about fees. Let me remember that last year, Q1 was a record level and was driven, of course, also the peculiar situation we were experiencing. So the fact that we were able almost to replicate last year, only difference is coming from fees on lending, as I was explaining before, which, as a matter of fact, it's now recovering. So let's be positive about the possibility to make better results as we expect in terms of fees and commission. Let me also say that Q3 and Q4 last year were not that strong like Q1. I have only April of this year's comparison to last year. And I can anticipate that April, in terms of investment product in 2016 has been better almost 20% vis-a-vis last year with a contribution, if I'm not wrong, of EUR 5 million, EUR 6 million better than April '25. So a very strong contribution from the network. I think these are now numbers once we have common strategy also with Anima with our bank insurance activity that was not the case last year. So very important for us, the contribution coming from that and the possibility to exploit at the most, the full power of this product factory. M&A, we, frankly speaking, we don't have a priority. Priority comes from the market opportunity we are examining all the possibility. Basically, I think we speak more about agri call and Monte basket just because Agri call is the first our shareholder with 23% of shares. So for sure, everybody could imagine some opportunity with them as well as we are a small shareholder, but nevertheless, quite relevant shareholder for Monte Paschi with 3.7%. So I think this is the reason why everybody expect possibly these 2 transactions. To be a shareholder does not mean that the opportunity for doing an M&A are ideal. So let's wait and see. Let's understand what the other counterparty are willing to do but I think that we are in a good position to take advantage from every opportunity as well, as I mentioned before, opportunity arising from smaller M&A, which can enhance the capability of our product factory.

The next question is from Ignacio Ulargui, BNP Paribas.

I have just one question on costs. I mean, how should we expect cost going forward in the context of a very solid performance in 1Q and could you consider at a given point in time using that excess capital and that potential better capital progression to take any managerial action to improve cost further?

So thank you, Ignacio. So the trajectory of costs is, as you correctly observed, positively oriented. We managed in this quarter to deliver savings versus end of last year in general versus the overall last year trend because this has been the impact the result of the cost management actions we undertook since the announcement of the plan with the redundancy program the replacement of existing of older cohorts with new ones for a lower rate or rate of replacement that is lower than an -- in general, the trend for cost that we expect to experience can benefit from additional marginal efficiencies. Let me only observe that you are not only that you are not only below trajectory of the plan, but we expect to continue to stay below the -- the only additional qualitative point, I may add on that is that within this overall trend, we expect to replace part of the running costs with change costs, so investments and expenses that we are implemented in order to modernize the infrastructure of the bank .

The next question is from Luis Manuel Pratas Autonomous.

My first one is on the 2026 guidance. For multiple results, we have seen the disclosure that there is some room for overperformance, especially in fees, costs and cost of risk I would like to ask you what is holding you to provide a more positive guidance, whether it is just a more conservative view whether it is the weaker macro, given the geopolitical uncertainty? Or maybe could you also think about recycling any of this better performance into investments for the future? Then my second question is also on the CET1 guidance of the 14% that you mentioned. Could you please break down the main OCI movements that you observed in April. In particular, it will be very helpful if you could provide some sensitivity to changes in sovereign spreads as well any movements to the Monte Paschi price.

Thank you, Luis speaking. For the guidance, I think we have been quite clear on Page 20, you have all different items compared to the business plan on '26. Of course, before tax, we are much ahead, I would say, of what -- not the guidance, but what we expected before knowing the impact of the new fiscal impact. Of course, we have still some prudent approach related to the recovery of almost EUR 100 million, we have to perform in order to match the 26 business plan. After 1 quarter, even though we have recovered almost all the gap maybe is more prudent for us to wait another quarter also due to the macro economics, which, as you know, are not that stable in terms of geopolitical, in terms of inflation, interest rate and so on. So of course, it would be easy for me to say that I better my gut and say that it would be equal or better, but does not change much. So I would, therefore, ask you to consider that is already a battering because in February, we were not saying that we would have matched the plan after tax, not only before tax. Now we are much more confident to be able to reach also the results, absorbing almost EUR 100 million of tax effect. for common equity. I'll leave the answer to Edouard.

Yes. If you -- I mean go back to the track record of Monte basket share price. I believe it was around 7.4%. If I'm not mistaken, end of March. Now it's -- and April was around in this leads to 1.6x which is more or less our number of shares. But long story short, slightly more than 30 basis points is the improvement in April that we have in the pro forma from Montes slightly less than 10 basis points is the improvement we had in free comprehensive income.

So that very competing debt government bonds reserves.

And maybe can I just do a quick follow-up on the tax rate as well it's a very important guidance point -- so this quarter came in at 36% and it was a bit worse than the 33% guidance last quarter. So could you please clarify what's the tax rate guidance for the rest of the year?

Yes. I think this is slightly higher than what we expect to have overall during the year. So of course, the tax rate in Italy has been impacted Guiseppe was saying the budget law approved end of 2025. We expect to stay in the region over 35%, 34% to 20%, 35%. Overall for the whole of the year. So it's slightly higher because there are items that are less impactful in terms of taxes, such as, for example, Monte Basque dividend maturing in second quarter, which is part of revenues, but is taxed before the distribution, so it doesn't impact on taxation.

The next question is from [indiscernible]

Yes. good evening, everyone. My question is about your stake in Anima because you are at 8.95%. So have several times mentioned the opportunity to reopen Animas capital to other partners to also strengthen the distribution relationship is still your view at the moment and how this can potentially help other bigger M&A options for you.

No. Of course, as you were mentioning, is a possibility to open and to wider the possibility of accommodate both other banks or distributors, interest in Anima or also potential M&A. So to have the company listed, that would help, of course, the value determination of the company, the possibility to have some step in a way which would be a bit easier than if we delist the company. But of course, we will not keep it forever listed for sure. So let's wait this situation in which everybody is talking about opportunity and I think in a couple of quarters, we will make a decision about it. As you know, we can also decide to make a merger to consolidate Anima. So without any other action on the market.

The next question is from Noemi Peruch of Morgan Stanley.

I have just a few. So in Q1, what drove deposit decline, especially on the side deposits. And in terms of common equity, I appreciate the guidance on the mark-to-market as of April. But I was wondering if you could give us visibility also in perhaps other moving parts that could impact common equity. Double impact by year-end? And then a follow-up on the cost side. If I'm not mistaken, you have plenty of room to implement a further early retirement scheme on top of what you have agreed with the unions with I was wondering where this initiative sits in your priority list and also in the context of meeting the net profit targets.

I wouldn't say that there is a decline in deposits. Frankly speaking, we are million in March below December, which, of course, has also seasonality. But let's have in mind that in March, we placed EUR 1 billion of BTP coming, of course, from current accounts. If I may say, in April, we are already above the figure of December '25. As you know, this has been the growth in deposit that's been signal in our bank, growing year-by-year. But of course, we cannot expect to have a EUR 5 billion of increase in deposit every year like last year. We have in our plan slightly growth of EUR 1.5 billion, EUR 2 billion per year having in mind that, of course, with the growth of last year, we are already where we thought to be able to be in 2027. So we are not spending interest rate in order to keep more volumes of deposits. But because of our footprint, we increased deposits in any case. Then maybe cost and common equity. I think have already answered, but I leave the room.

So common equity, if I understood correctly, the question was about additional guidance for the rest of the year. And I think that the level that we have in April may represent the pro forma level that we have in primary present a good hint towards the direction we expect to have until the end of the year. So in the region, of 14%, bear in mind that with the current market volatility, this is a level that is subject a number of, what to call them statistical factors. So with aero for defining intercompany interval cost, stocking on costs, as I said earlier, we have implemented already all the actions that were planned into our strategic plan last year. So last year, we said basically the benefits on cost were locked in once we signed the contract with the unions, then we are delivering some additional improvements working on a number of levers. For example, we signed recently an additional agreement for EUR 100 million in headcount reduction that are expected to be implemented during the remaining part of this year, mostly between the first and second quarter. The rest, as I said, is to confirm the current trajectory and to remix in favor of more investments, more change, more modernization of the banks of the bank.

The next question is from Hugo Cruz, KBW. .

I have 3 questions. First, on loan growth, it seems a bit weaker than some of what -- than the peers that have reported already. I was wondering if you could talk about your market share of new originations for the main segments, ready mortgages, corporates, et cetera. Then a second question on NII. I understand you want to be cautious with the guidance overall, given the macro uncertainties. But what I heard from you about the it sounded like all the trends would imply an increase to the guidance because I think guidance implies kind of flattish rest of the year, but you're talking about volumes going up, margin expansion, et cetera. So why are you not raising your guidance for NII for this year? And then the third question is around if you could tell us the pace of the impact of DTA absorption on the CET1 ratio during the rest of the year. You've done 18 basis points in Q1. I was hearing what should we assume in other quarters?

Thank you, Hugo. Loan growth we were much more prudent. I remember when we presented our plan vis-a-vis our competitor, we are happy about EUR 1 billion of loan growth. We have a target of EUR 2 billion for this year. So again, we don't want to sacrifice margin for loan growth. As you have seen in our presentation, we are growing in all the segments, taking advantage also from the state guarantee and the collateral, keeping safe our stock of portfolio -- so we are quite happy about our growth. Again, I don't think you can push loan growth in this situation in which there is some resistance from our entrepreneur to increase the investment. So I think it's good that we are so close to take advantage from any potential movement but we are still waiting for some good market environment, bettering of the market environment in order to push on the loan growth -- having said that, again, for instance, for mortgage, we are applying some new products in order to offset the reduction we have experienced in last quarter, but we are still growing year-on-year. On NII on?

Yes. NII. We definitely are seeing positive signals and expect to have results, delivering a positive trend versus the first quarter of this year. Bear in mind that we have mitigated on purpose our NII sensitivity to avoid excessive dependence on NII, so to avoid running too much the waves when they go up but also going too much -- be back exposure to the downside risk. . So net-net, if some of these conditions proved to be even more favorable than we could revise our guidance. But for the time being, we prefer to stick the indication to stay consistent with the exit level of December. The other question was on or less, we have an expectation for the rest of the year of capital creation coming from EPA that is similar to the pace we experienced during this quarter. And consistent also with what I said, of the 120 basis points of capital creation expected from EBITDA and revert complementary income during the remaining part of the [indiscernible]

Mr. Riscassi that was the last question. There are no more questions registered at this time. I'd like to turn the conference back to you for any closing remarks.

Thank you for being with us, and I'm sure we'll see around during our road show during the next days. Thank you again.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.