FinecoBank Banca Fineco S.p.A. ($FBK)

[Audio Gap] [Operator Instructions] At this time, I would like to turn the conference over to Mr. Alessandro Foti, CEO and General Manager of FinecoBank. Please go ahead, sir.

Good morning, everyone, and thank you for joining our results conference call. First quarter net profit stable year-on-year at EUR 162 million despite the higher tax rate by 2 percentage points. Revenues up by around 4% year-on-year at EUR 343 million, with all product areas contributing positively. Banking up by around 2% with higher deposits volumes more than offsetting the lower interest rates. Investing up by 8%, thanks to the volume effect. Brokerage up by around 5%, thanks to the higher stock of assets under custody and the expanding active investor base. Operating costs were under control at around EUR 95 million, increasing by around 5.2% year-on-year, excluding the additional costs related to the growth of the business. Cost-income ratio was equal to 27.7%, confirming operating leverage as a key strength of the bank. Our capital position confirmed to be strong and safe with a common equity Tier 1 ratio at 23.34% and leverage ratio at 5.14%. Moving to our commercial performance. We are experiencing a material step-up in our growth. This is driven by our unique positioning, capturing long-term structural trends and by our execution on several initiatives. The impact of this acceleration is clearly visible in our numbers. In the first quarter, net sales increased by 44% year-on-year. In April, net sales at EUR 1.3 billion, plus 6% year-on-year with around EUR 600 million deposits, around EUR 320 million assets under management and around EUR 320 million assets under custody. Brokerage revenues estimated at a solid EUR 22 million. New clients continued to grow at a strong pace, up by 18% year-on-year in the first quarter. In April, new clients were equal to 17,500, up by 16% year-on-year. Now coming to the guidance, upgraded outlook for our 2026 and 2029 plan, confirming the quality of our diversified business model. The better outlook is driven by a combination of better-than-expected net sales and client growth, very strong brokerage expected to grow further highest interest rate environment. No change on investing guidance to 2026. We expect all the product areas contributing to higher revenues, thanks to the acceleration of our structural growth. We expect net financial income rising, thanks to deposits, net sales and the new rate environment, investing a solid year-on-year increase in assets under management net sales. Brokerage, we expect another record here. Banking fees stable year-on-year. Cost, we expect the growth by around 6%, not including around EUR 10 million additional costs for growth initiatives and around EUR 5 million for the Pan-European platform set up. Let's now move to Slide 7 and start to dive on the quarterly results. Net financial income is up 1%, both quarter-on-quarter and year-on-year, led by the positive volume effect on deposits and by the higher reinvestment yield of our bonds running off. This performance is particularly remarkable when considering that the quarter-on-quarter comparison is affected by fewer calendar days, lower rates versus first quarter 2025. Let me reiterate the quality of our net interest income. It is capital light and industrially driven by our clients' sticky transactional liquidity. Deposits come to our platform for the quality of our services, not because of aggressive commercial campaign on short-term rates. This translates into cost of funding close to 0. As a result, even a small banking-only client is profitable. Now on the right, you can see the very strong dynamics of our deposit net sales in the first quarter. Deposits grew by 32% year-on-year before clients' investments. Those dynamics were even stronger in April with around EUR 700 million deposits net sales. Let's now move on Slide 8. Investing revenues increased by around 8% year-on-year driven by the growing volumes. The quarterly comparison is characterized by the usual seasonality. PFA costs related to FIRR and Enasarco that are higher at the beginning of the year. Other commissions in the fourth quarter of 2025 due to operating efficiency achieved by Fineco Asset Management, which are booked for accounting reasons in the fourth quarter and fewer calendar days. On the right, you can see the drivers of our investing revenues growth mainly the higher year-on-year asset under management volumes where 53% is represented by explicit fees solutions. On the other hand, let's move on to Slide 9 for a focus on brokerage. Let's move to brokerage. One main pillar of our business model, a business that is growing strong, highly profitable with high operational gearing and with a clear market leadership. The charts on the slide highlights the long-term correlation between brokerage revenues and the stock of assets under custody. The brokerage business represents the best sign of the how fast the structure of the financial market is evolving. Technology is driving a quick change to clients' behaviors, thanks to the demand for higher transparency led by AI. For this reason, we can see that the brokerage Italian market significantly still underpenetrated, and we see a strong opportunity to grow. Finally, we are rolling out new initiatives to further unlock the potential from our assets under custody, which we will deep dive later. Now let's focus on Slide 11 on our capital ratios. Fineco confirmed once again, capital position well above requirements on the wave of a safe balance sheet. Common equity Tier 1 ratio at 23.3% and the leverage ratio at 5.14% with risk-weighted assets at EUR 6.3 billion, total capital ratio at 39.27%, liquidity coverage ratio over 950% and net stable funding ratio over 400%, high-quality liquid assets on deposits at around 80%. Let's now move to Slide 13. Fineco benefits from a unique marketing positioning, fully capturing its long-term growth opportunity. On the left, we show our market share the addressable financial wealth, which is still very small. On the right, we summarize the key structural trends that are reshaping the financial services industry and reinforcing our strategic positioning. First, AI disruption, which is driving for higher transparency in financial services and higher productivity. Fineco is already well positioned, thanks to its market positioning and state-of-the-art platform. Second, the massive generational wealth transfer. New generations are looking for efficiency transparency and convenience, all core elements of Fineco's value proposition. Third, the consolidation in the banking industry with traditional banks not focused on customer experience. Fineco sits exactly at the crossroad of these 3 big structural trends. Moving now to Slide 14. We show a clear example of our distinctive positioning compared to the industry, focusing on the investing business. Fineco is a clear outlier in the Italian market with a proposition based on efficiency, transparency and convenience. This is reflected in a great quality of our investing revenues. Our revenues are mostly driven by recurring management fees based on a fair pricing with no performance fees and a negligible component represented by upfront fees. This is marking a clear difference in the long term sustainability of our investing revenues compared to the system. As you can see on the right, other players are not just applying performance fees on the top of highly expensive investment solution, but also clearly pushing stronger on upfront fees. Fineco clearly sits on the other side. And moving to Slide 15, you can see how all this is leading to the inflection point of our growth. Our most recent numbers are clearly showing a material step up in the magnitude of our growth in net sales and new clients. Let me reiterate that total net sales remain the most important KPI to evaluate our growth on each component of the mix contributes positively to our revenues and net profit. Asset under management leads to higher investing growth. Assets under custody net sales are a key driver for our brokerage revenues and transactional liquidity, which is gathered with the cost of funding close to 0, contribute to our capital light and industrially driven net interest income. Let's now move to Slide 20, guidance. Upgraded outlook for 2026 and 2029 plan, confirming the quality of our diversified business model. The better outlook is driven by a combination of better-than-expected net sales and client growth, very strong brokerage expected to further growth, higher interest rates environment. No change on investing guidance 2026 on investing. We expect all product areas contributing to higher revenues, thanks to the acceleration of our structural growth. We expect better net financial income, thanks to positive deposit net sales and the new rate environment, investing solid here on here increase in asset under management net sales. Brokerage, another record year, thanks to higher assets under custody and active investor base. Banking fees stable year-on-year. Operating costs, we expect growth by around 6%, not including around EUR 10 million additional cost for growth initiatives and around EUR 5 million for the pan-European platform set up. Cost income, we expect to hit comfortably below 30%, thanks to the scalability of our platform and strong operating gearing. The cost of risk was equal to 9 basis points, thanks to the quality of our lending portfolio, and this is expected in a range between 5 and 10 basis points. Finally, payout ratio is expected for 2026 in a range between 70% and 80%. On leverage ratio, our goal is to remain above 4.5%. I will now hand over to our Deputy General Manager, Paolo di Grazia. Thank you.

Thank you, Alessandro, and good morning. Good morning, everybody. On Slide 21, we focus on the initiatives to fully unlock the value of our asset under custody and increase our brokerage revenues. The securities lending -- first, the securities lending platform which we'll plan to launch by the end of this June and will be a marketplace for institutional counterparties, giving direct access to our high-quality and fast-growing stock of asset under custody. Let me remind the quality of our AUC, assets under custody, highly granular, well-diversified across classes and geographies and retail-driven which adds significant value in the securities lending market. Importantly, more than 40% of the stock is already opted in combined with the expected growth of AUC, the opportunity can be very relevant. Second -- second initiatives, the Auto-FX which is now live on all our client base. And the Auto-FX gives clients a leaner customer experience with no exposure to ForEx risk. At the same time, it presents a structurally more profitable setup for the entire bank, improving both revenue, revenue generation and client satisfaction. Finally, on our -- finally, our activity as a systematic inernalizer and market maker. So we are positioning Fineco to benefit from the shift of European brokerage market toward a more quote-driven model, increasingly similar to the United States. In the future, we expect growing volume to be internalized across multiple asset classes. And also, we will expand our activity as issuer and market maker for a wide range of products. Finally, this activity is a backbone of the launch of our future pan-European platform. Down in this slide, we show the strong upside potential of these three growing initiatives to our brokerage revenues. Their contribution today is progressively building up, and we are very confident that will become increasingly important going forward in the future. So let's now move to Slide 22 to dive on ETFs. Fineco is uniquely positioned to capture the strong client-driven shift toward ETFs. For a player like Fineco, the business represents a strong growth opportunity and a new revenue engine for brokerage, both and investing, thanks to two main pillars. The first, our very efficient trading platform that is building up strong in volumes on the ETF side. And second, our distribution model based on advanced advisory solution with an explicit fee, where ETFs are synergetic with no significant high to margin and profitability of the bank. As a consequence, on the left side, you can see the strong acceleration in revenues from over the recent years. The stock on our platform is quickly on the rise and is now close to EUR 18 billion, gaining strong traction both among clients supported by financial planner and among direct clients. To further monetize ETFs, we are acting on several levers both on brokerage and on the investing side. On the brokerage side, we -- first, growing client's engagement means higher turnover and higher brokerage fees. Second, ETF are very well in demand for securities lending and we are -- and it's a strong opportunity for our internalization engine. And finally, the platform fee agreement with a selection of ETF issuers will be in place by the end of this half, adding a further recurring revenue streams. On the investing side, we see the strong client's interest means a big volume for our advanced advisory services, resulting in stronger revenues. Second, FAM, Fineco Asset Management is live with its active ETF range. And for plain vanilla ETFs is entering in a co-branding partnership with one of the leading issuer. And finally, ETFs accumulation installment plans are now fully available on our investing services. Let's quickly move to the Slide 23. The plan for the deployment for our Pan-European platform are progressing as expected. And we confirm that by year-end, we will launch our first Friends and Family phase, which will follow the full launch on early 2027. Finally, moving on to Slide 24. We summarized the deployment of our artificial intelligence across our proprietary platforms. As a reminder, our AI-driven initiatives are already starting to deliver results. As an example, personal financial adviser constantly using the AI platform, so an increase close to 20% of their commercial proposals. And finally, let me now briefly summarize the most recent artificial intelligence initiatives. First, we are live with the customer relationship management for our financial planners, a key step to increase their productivity is fully integrated with Fineco platform and data and allows our network to better clusters, client and identify priority actions. And second, we are in the Friends and Family phase also with the brokerage copilot that will improve the awareness and the engagement of our direct clients. The AI tool allows clients to screen securities, analyze portfolios on relevant news and is fully integrated in the execution engine. So thank you for your time, and we can now open the call to questions.

[Operator Instructions] The first question is from Enrico Bolzoni with JPMorgan.

First question. I just noticed that there was a small drop in management fee margins over the quarter. I suspect might be related to the fluctuation in markets and the mix. Can you perhaps help us to understand a bit what drove it? And perhaps it would be helpful to know, for example, what proportion of your IM was in equity or, let's say, high-margin product at the end of March relative to the beginning of the year? So that would be helpful for us to understand how the margin might evolve over the coming quarters. The second question I noticed that there's a very, very good trend undergoing on your salary pension transfer. So I was looking at your slide where you showed the money coming in from these. And on average, in Q1, for example, your bank transfer and salaries have increased by 13% year-on-year, so compared to the same quarter last year. Despite average clients having increased only by 9%, so the same trend applies to 2025. So it really looks that either your existing clients are giving you more money or transferring the back book or the new clients on average have higher initial transfer compared to the historical one. Can you maybe give us some KPI. I don't know perhaps how many clients are you seeing using only Fineco or Fineco as their main bank? Is the trend increasing because clearly, this looks like a very positive trend. And then finally, on NII. I appreciate that you don't provide a very specific guidance. But if I look at consensus currently expects about 6% increase year-on-year, that looks pretty light. One of your competitors just reported and they revised their guidance [ they now ] expect 15% growth year-on-year. Can you just give us a ballpark figure even based on current deposit levels and then forward curves, I think it would be very helpful just to get a sense of how NII could evolve.

So thank you for your questions. Let me start by the first one on the small drop in management team margins. As you are correctly underlying, it's really very small drop. So it's clear that the reason -- the combination of change in the market -- change caused by the market effect because, clearly, when you have a negative impact because by the market, clearly, this tends to drive down the -- also the margins because it is impacting. And clearly, there has been still the reason the largest component in terms of net sales represented by fixed income solutions that clearly. But again, as we are continuously repeating, we are not particularly focused on the very small evolution on the margins because at the end of the story, what is -- for us, it's important, is the combination between volumes and margins at the end of the story, the evolution of revenues because clearly, it's -- we have been always extremely transparent on this point. We think that, generally speaking, on the asset under management side, the industry is expected to keep on experiencing some kind of pressure on margins but what is important that if you are able to keep on growing decently and robustly and at the end of the story, delivering a good evolution of the revenues. At the moment, the proportion of assets under managing in equity is probably in the region of 35%, more or less that. And we didn't see any significant change at the end of the first quarter 2026. And we don't expect any significant change in going forward on the short term. On the good trends on salary and pensions. Clearly, this is a combination of new clients that they are entering into the bank and using the platform. And clearly, what we -- for us, it's very important to underline that how the way we are gathering clients. Fineco's not gathering clients throughout aggressive offer or paying very high rates. Fineco is gathering clients because the clients are truly interested in using our services because they are considered state of the art. And clearly, in the evolution of the crediting of salary by clients, there is clearly a great contribution by the new clients, but we have also the clients that we acquired in the past that they are becoming more familiar with the platform. And so they are deciding to credit their salary with us. It's a kind of increase of the share of wallet in terms of experience of our clients. And clearly, the Fineco is -- we are -- we think that probably Fineco is the -- what is important is to look at -- which is the -- to say if Fineco is not [indiscernible] yes or not the main bank for higher clients. The answer is that this is clearly is yes. But this is perfectly demonstrated by the -- when we look to the -- what's going on, on the private banking side. Fineco is growing 3x faster than the industry. And this is the segment in which we are growing the most in terms of speed of acquisition of assets exactly for this reason because the more the generational transfer is progressing, the more the clients are becoming and realizing the quality of our offer. And the more we have clients that they are using upper end clients. They are using more and more, Fineco is their reference Bank. Consensus expect a 6% increase on our net interest income. And clearly, we think -- the reason of the upgrade is because clearly, we expect more because the -- clearly because we clearly -- and this is -- we are confident on that because on one hand, there is the very clear evidence that the growth that the bank is experiencing is debt very well ahead of our expectation. And by definition, growing net sales is bringing together higher deposits as well, the same story for the client acquisitions. And so this is the main driver. In terms of change of the interest rate environment, we took a conservative approach. So clearly, now we are expecting a forward-curve that is higher. We expect the forward-curve we used for preparing the plan, but is remaining definitely below the actual forward rate curve. So it's -- so the expectation in terms of evolution net interest income is clearly above this 6% increase, but remains, let me say, reasonably cautious, so it's not -- we are not bringing any [ book of dreams ].

The next question is from Christiane Holstein with Bank of America.

My first question is just around the upgraded guidance outlook. Obviously, the numbers have been very good. But this is quite fast given guidance was only given two months ago. So I was just wondering if you were able to quantify how much stronger this is versus your expectations? And then on the net sales and client growth, in particular, I was just thinking what you think the drivers are of this. I'm just wondering if this current growth is sustainable or it's more been driven by recent volatility in marketing spend? My next question was also just on the update on the Germany launch. Just wondering if there's anything to say there around timing? So when in H2 or H1 next year? And anything on variable costs? And I guess, how are you also thinking about the competitive environment given the commentary from recent years?

Giving a very precise -- quantifying it precisely the upgrade of the guidance. It's always -- can be extremely difficult for -- just to give you an example because if we look -- so for example, we -- as I was saying before, we are using a prudent approach. You can see the impact of the interest rates on the interest rate environment. And so it's difficult to say exactly because of what can be the real dimension of the increase of the financial income for these reasons because clearly, it's -- if we consider the actual forward-curve, maybe can be definitely much higher than we can have if we are considering just -- and small uptick in respect to the initial forward-curve we used for our plan. So this is the reason why. So what is important to underline that it's -- if you -- what is driving the increase of this guidance is, as we said during the presentation, what is key as a KPI to keep in mind is the evolution of total financial assets or the net sales because we consider in the business more than the positioning of the bank every single component of the mix is contributing positively to the increase of the revenues at the end of the story profits because deposits is pretty clear, considering that these deposits are gathered in extremely healthy way. So -- and this means that the most part of these deposits are characterized by [ 0 beta ]. And so clearly, these are incredibly profitable. Second, the asset under custody. So there is -- as we showed during the presentation, there is a very evident correlation between the dimension of the asset under custody and the progression of the brokerage revenues and so clearly, the more assets under custody we gather then the more you can expect that the floor of the brokerage revenues is going to keep on moving up. And this is the reason why we are confident in expecting for another record year on the brokerage side exactly for this reason. So asset under custody, it's a great business. So very profitable, fast-growing and with margins that are not too different by the margins we have on the assets under management. And finally, there is assets under management that it's extremely easy to explain why it's profitable. The growth, yes, it's absolutely sustainable. We think, on the other hand, that we are in the position to keep on accelerating even more the growth of net sales and clients. And regarding the marketing expenditures, it's what is very important to underline that the growth is not a direct consequence of the marketing expenditure. The growth is a direct consequence if you are spending your marketing budget in the proper way. So the concept is, I think that probably Paolo can be even more precise regarding -- when you're spending in marketing, it's very important that there is a high probability that someone is listening to you because, for example, if you are a bank that is not correctly positioned. And you are transferring the concept that you are a great bank doing a great service for our clients. These are a completely waste of money. On the contrary, if you are a bank that is perfectly positioned currently with the messages that you are delivering, the more you spend and the better it is. But clearly, this is the -- so the real reason behind this growth is the positioning of the bank and exactly that is exactly capturing perfectly the incoming trends. On the -- I don't know, Paolo, if you want to spend a few words on the German launch?

Yes. The German launch, as we said, we expect to launch the initiatives by the end of this year in the friends and family phase. And it really depends. It will depend on the friends and family phase. For now, we stay for the final launch to open for everybody in the first quarter 2027. But again, the friends and family phase will give us the exact launch date. We will have more details by then.

The next question is from Alberto Villa of Intermonte SIM.

I have a couple of questions. One is related to the securities lending platform launch in June. Maybe -- can you give us an order of magnitude of revenues that you expect in a, let's say, full year of operations of 2027? Is that going to be a significant contributor to revenues in your view? It's quite a new one because it's also for institutional. So it could be interesting to understand. The second question is on the total financial assets breakdown. There has been a slight decline for the private banking. Of course, it has been impacted by the market performance, but I was wondering if there is any other specific reason for the slight decline. And if you still expect this part of the business to grow significantly in the future? And yes, what are your expectations on the, say, private banking part in terms of net sales and future evolution?

So on the securities lending, clearly, what the bank is preparing is an extremely efficient platform because clearly, the success of the securities lending business is going to be driven by two components: one, the dimension of the asset under custody business. and second, by the efficiency of the platform and the meaning that the platform has to be able to deal with the broadest possible range of counterparties because this platform is going to interact with our internal clients. So asset managers, hedge funds, market makers, prime brokerage desk and so on. And this has to be a platform. It's going to be a platform able to give real-time interaction with all this extremely broad range of players. So it's clear that it's -- we are moving in a kind of -- we are extremely confident it's clear that this so far, the contribution of securities lending has been pretty small, and we remain quite positive in our plan. As we said, we took a reasonable conservative approach because we are entering in a kind of unchartered territory, a very promising unchartered territory. But in any case, it remains to be tested. And so we think that to give to you a precise numbers by year end is. In the guidance we are giving, just to be extremely transparent, in the just recent upgraded guidance for 2026 and the plan we are not embedding any gigantic contribution by the securities lending, but not because we are not confident that we can achieve that because it's a brand new activity that we are entering but the combination of the dimension of that asset under custody. The granularity of the business we're running because this is another very important component. And the usual state-of-the-art capability of the bank of building up very efficient platforms is making us extremely positive and confident on the evolution. On the private banking, as you -- is exactly what you are aware underlying, is just being driven by the market performance because it's clear that there's more clients. By definition, there are a percentage of liquidity that is much -- tends to be much bigger than the big clients. And by definition, when you have declining markets by definition, liquidity is performing well. So -- but this -- and so we don't expect -- so the trajectory in terms of growth of private banking is remaining absolutely intact and very promising.

Okay. So going back just to understand to the securities lending from what you're saying, the assumptions underlying also in your mid-term guidance are not particularly aggressive. So that could be an area in which if things go in the right direction, there might be some potential positive news for. Is that correct [indiscernible]?

It's exactly that.

The next question comes from Ian White of Autonomous Research.

Two from my side, please. Just firstly, on the AI enhancements that you've talked about, can you just say a bit about what usage you're seeing on those so far? And how will you incentivize that usage among your own advisers? And relatedly, what KPIs should we look out for to see that those tools are having the desired impact on the business? That's question one, please. Secondly, just on this theme of competition within European brokerage and distribution, why do you think that's less evident for you in Italy versus some of the listed peers over the first 4 months of this year? And what do you see as the main structural barriers to competition that will support your business over the next few years, please?

I don't know, Paolo, do you want to start with the AI announcement giving some colors and?

So in terms of usage, the usage right now, we delivered the AI platform just to the financial planner, and they are able to use it to build a portfolio, check portfolio if they're in line with the MiFID, for example, or with the profile of the risk profile of the client. They can use it to check on the news that have an impact on the client's portfolio. They can use it to build a pitch for new clients or maybe new portfolio, new allocation for clients they already have. So they can do multiple things with AI right now. And the usage is just massive. I mean 90% and more of the net used already used the system, the engine and every day, we see a growing number of financial planners they get used to the platform, they keep on using more and more. So we are very -- we -- of course, we're very happy with that. It's probably the -- as I said many times, is probably one of the highest adoption we experienced in our journey here in Fineco since the beginning. So it's quite impressive. In terms of how we incentivize the usage actually, we until now, at least we didn't incentivize much because they just use spontaneously the platform. Also having said that, we have a training program for the financial planner in place here in our Academy training hub that we have here in the headquarter. And we plan in the future to train more financial planner using the AI that we're releasing every month more or less new pieces of the platform. As I said before, we just released the customer relationship management for the AI, CRM, for the financial planner, which is, in my opinion, is going to be even bigger in terms of impact than we already have in place. And in terms of KPI, we monitor different list of different KPIs. One of the KPI is the one I mentioned during the presentation as the number of proposals that a financial planner using AI are proposing to the final client, which is number is quite impressive. It's 20% and more. And this is a clear sign that is -- they have a higher productivity. They're more active. They use the AI to be much more in contact with the final client, then we use also another KPI very importantly, is the number of new clients that financial planner use in the AI are having. So different KPIs, still, in my opinion, it's too early to share all these KPIs. They're all very good. We're very happy with what we've seen. But again, it's -- we need to look for at least -- wait there for at least probably 6 months to a year since the launch and give the possibility to all the financial planner to get used and use every day the technology.

Thank you for raising the point on the competition -- EU brokerage arena. And first of all, it's not completely correct saying that the competition does not come in Italy because the competition has come in Italy by many years because here in Italy, we have all the -- by many years, we have here in Italy, all the most aggressive players in the brokerage arena. We have Trade Republic that is operating in Italy. We have Flatex and DEGIRO that is operating in Italy by many years. Revolut as well. Interactive Brokers on the other hand. So there is all the broad range of the most significant and aggressive players operating all around Europe are here in Italy by many years. So it's not -- so for which reason, we -- the Fineco model is keeping on growing and it's a great business. We have several reasons. So number one, clearly, there is the concept of the one-stop solution, Fineco is offering to the clients and an extremely broad horizontal experience. And this clearly is extremely important for making the big clients very sticky because the big clients with the big money that they are using the brokerage platform, clearly, they are appreciating a lot the fact that Fineco is offering such a kind of broad and great experience. Second, the experience we are giving is incredibly robust. So it's because at the end of the story, what is very important to underline is that for a client, it's important, it's very important for example, the reliability, the robustness of the platform because, clearly, when you have particularly a fast market and so on. It's very important that everything has to be very strong. Fineco has an incredibly robust infrastructure. Third, and this, again, is driving back to the concept of the big clients. In the case of clients with a decent amount of money, Fineco is the only one player among the most relevant brokerage players in Europe that is, at the same time, is a significant bank. So Fineco is the only one. All the other platforms are small. And so this clearly, it's important for clients being sure that you can get your services by an extremely robust, solid trust for bank. And then also on the terms of offer pricing, Fineco is incredibly competitive because we -- during the presentation, we stressed the point that how Fineco is advanced in the direction of business model similar to the U.S. one, which you are managing the floors. So -- and Fineco is internalizing a lot of the activity. So it means that we are able to offer right now a quite significant range of solutions characterized by zero commissions, for example, because I think that -- and this is a fast-growing component of the business. I'm just thinking about it today. But we -- I don't know, Paolo, it's...

Yes. This is totally true. I mean the most -- the product most used from traders like, for example, the most aggressive are commission-free, the ETFs -- basket of ETF are commission-free, certificates where we are issuer, fixed leverage and variable leverage certificates are commission-free. Our own -- we internalize our own products. So we -- on the training side, a big range of clients are already commission-free. So they're already profiting from the model that we have, that we are able to internalize flows and give commission-free business to the final client.

So summarizing, it's a unique combination where you can get a very broad experience and great services, robustness, provided by a large significant and trusted bank with a level of commissions that are absolutely incredibly favorable and they can match also the most aggressive offer by the, let me say, new brokers or something like that. So this is what is making our position incredibly strong and continuously growing. But the competition is here. It's not -- we are facing this competition by many years. We have some of these plays that have been -- that [indiscernible] Italy going back in 2014. So going back to 12 years ago, offering, for example, zero commissions.

The next question comes from Oliver Carruthers with Goldman Sachs.

This is Oliver Carruthers from Goldman Sachs. So on the kind of recent comments from your international peers, I think the marketing comment and the cost of marketing per unit return, I think it's been well covered by you. But I think one of the other interesting comments we got from another one of your peers is they were making the point that the cost of software is coming down in part due to AI making international expansion easier. So I'd love to hear your thoughts on that, what you're seeing and really how you're thinking about domestic and international growth priorities for your retail brokerage platform with that in mind? And second question, could we potentially double-click on the comments you made around growing the systematic internalization and your market-making activities. So really, what's driving this? It sounds like that's a little bit incremental today as well. And if you move to becoming more of this principal agent model in brokerage, are there any capital requirements associated with this that we should be thinking about?

So the first question -- answer on AI is clearly is making much easier than international expansion. So I'm just thinking about the remember that a few years ago, there was a big hurdle represented by the CRM, so -- for the languages. And so now, clearly, it's something that you can manage incredibly well and easily because theoretically you can build a CRM that is speaking a local language also with the local dialect and without having the need of a physical person. But it's -- I don't know, Paolo, if you want to make some comments or so on this point?

I mean everything is easier with AI, not only for the expansion abroad, but for sure, for the expansion and broaden the translation of the front end was quite a problem a few years ago. And now we can translate our front ends in as many languages as we want in seconds. So it's much, much easier. That's for many different reasons.

Also it has made incredibly easy to go through to navigate through that just small, a little bit different regulations because we know that we are in the European Union, but, for example, the way compliance is working is not exactly the same. But -- and so a few years ago was a mess because it was necessary having in place a team of people that are taking care of, considering the different kind of compliance requirements in the different regions. Now this can be done really in a few seconds by artificial intelligence. So clearly, it's -- and so the timing of our decision of moving abroad has come also thanks to the confidence now we have, thanks exactly to the presence of the artificial intelligence. And the growing internalization market, it's -- this is a worldwide trend because if you look to the U.S. market, now the U.S. is clearly is a completely quote-driven market. It's a market where when you see the price is placed on the screens are the prices provided by the market makers that they are collecting the orders that is different by the -- what has been, until so far, the prevailing situation on the European market where you have an order-driven market with the client. And in U.S. now, practically, this model is the results that the brokerage industry is an industry which practically there is the numbers of players that they are charging zero commissions is incredibly large and the most part of the revenues are coming from the management of the [ flows ]. This clearly is an extremely easy also very easy to be understood by client's process. So -- and in Europe, probably is going to be this approach is even more robust because in Europe, there are extremely strict rules on the best execution side. So this means that you don't run the risk to have a little bit a situation which you get a zero commission trade, but there is a question mark on the quality of the execution. In Europe, you can get both. So commissions and at the same time, an extremely fair and transparent execution. So this is the reason why this approach is growing popular. And what is key in order to play big in this arena? Number one, having the right kind of clients, we take clients that are perfect. Second, you need to have also the dimension because clearly, this is a business of dimension. If you are big, you can play this game. Otherwise, there is no way. Third, technology and infrastructures, try to mention what does it mean to adjust in a small fraction of seconds [ match ] client's orders fulfilling perfectly the best execution requirements and so on. So this is what is driving the growth of the -- and so this is going to be the market of the future in Europe. And this is one of the main point of strength on which we can leverage in our, for example, plan of expanding abroad. And so -- and this is what is making us extremely confident. So this is going to make our offer extremely distinctive. And in terms of capital requirements, not at all because this is a kind of, let me say, smart market making that it's not implying any usage of capital. So it's a completely capital-light activity.

The next question is a follow-up from Enrico Bolzoni with JPMorgan.

Just a small follow-up. In one of your slides talking about ETF, you say that you will have a platform fee going live the first part of this year in 1H '26. Can you clarify, is this the fee that you will charge ETF manufacturers to distribute their products on your platform? And if that is the case, are you able to just give a rough quantification of how much that is going to be and how many players have already agreed to pay this?

On the -- so at the moment, we have the arrangement is going to include probably what are the, I can say, the 3 largest players in the industry. We cannot give you any disclosure on the dimension of the agreement because there is, as you can imagine, this is an extremely delicate point. So we signed a new disclosure agreement with them because this is an inflection point in the industry of ETFs because it's marking the point in which clearly the industry is recognizing that more and more who is on the driving seat of this business is going to be are going to be the platforms. Because they clearly -- the ETF's world is an ocean. Just to give you an idea, on our platforms, we have 400 different MCI-world ETFs. So it's for clients apparently they are all the same. So clearly, the way the clients are navigating in the platform is key and so on. And so this is a clear -- and the issues are fully aware of this. And so this is an incredibly important point in the evolution of the industry, and we are extremely positive on the fact that clearly, we are in that kind of position. Again, it's a business of scale, it's a business of volumes. And clearly -- and the more we grow in terms of volumes and the more clearly we can leverage on that. And this is going to become an important and relevant and giving us an edge. And is going to be in the region of as a startup of several millions of euros. Clearly, we cannot give you any precise numbers right now. Clearly, this number are going to keep on evolving because it's going -- it's not going to be a number that is going to be fixed this year for the future. It's going to continuously being managed and negotiated with the counterparties accordingly with the evolution of the volumes and the business. I don't know, Paolo, if you want to add a few words on this much.

I can't say much more. As Alessandro said, we have very hard NDA signed, so we cannot say much more.

Yes. That's very helpful. And just for clarity, these additional millions, will people [indiscernible] brokerage commission? So we will see [indiscernible] brokerage commission?

Yes. I'm looking to the CFO because she is in the driving seat of the -- for the accounting of the...

Mr. Foti, there are no more questions registered at this time. Back to you for any closing remarks you may have.

Thank you for attending our results conference. Thank you for the usual extremely interesting questions. And as usual, every one of you that is interested in deep diving a little bit more in numbers concepts, please call us any time for a follow-up. Thank you again, and see you soon.

Thank you very much.

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