UniCredit S.p.A. (UCG.MI) Earnings Call Transcript & Summary

It's second day of our financials conference, 30-year anniversary for us. It's a big year. And second day of conference, of course, is as strong as the first, and we couldn't make a better start than with our next speaker. I could say there's no such thing as an annual financials conference if Andrea Orcel is not with us. So thanks, Andrea, for joining us, CEO of UniCredit. We're going to use the usual template. We'll go through some questions, and we'll try to leave enough time for Q&A from the audience.

Now maybe we can start. I mean, yesterday as well, the theme at the conference has been growth. And particularly for the domestic Spanish, the message has been quite upbeat. Low visibility when it comes to growth in Europe, and the bank's inability to deploy some of this capital to fund balance sheet expansion has been a bit of a drag on valuations. And so my question for you is what it's going to take, in your opinion, for European banks to be able to sustain loan growth? And what are you seeing on the ground given that you're one of the larger pan-European banks?

So I think we need to distinguish the second half of '26 -- of '25 and the first 9 months of '26 from structurally what is happening. If we start from structurally, we come from a situation that for years we had negative rates. We had very slow to negative GDP growth. We had cost of risk at 50, 60 basis points. This is sector-wide. Banks were deleveraging. They didn't do what they did in the U.S. They took 10 or 15 years to do it. And now if you look at it looking forward, you have about 300 basis points difference in the rates level. And that for a bank that is a commercial bank with 60%, 70% of NII, it's a hell of a difference. So it's structural. Secondly, I think generally, in Europe, you're at 25, 30 basis points of cost of risk, stable. In our case, we're lower, but stable at that level. So there is no more of that. GDP is not as exciting as the U.S., but I think Europe is at 1.5%. I think when you look at the realities, for banks, it's more -- it's closer to 1, at least in our perimeter. So you have a little bit of GDP growth. And banks are no longer trying to retrench, but they're trying to grow. So this is structurally much better. That's the first point. And that will not change. And therefore, when you compare pre '21 to now, it's two different worlds. And it's going to be a lot closer to what it was for Europe pre-financial crisis to now. So this is the first point. The second point is, I think -- I hear a lot about loan growth, and I think you need to take it with a pinch of salt. And the reason for saying that is GDP growth, as I said, is growing 1.5% in Europe. But if I look at the core economies, Italy, Germany, where we are in general, 1%. Secondly, if you look at consumer confidence, it's down. It's not up. I'm talking short term. Thirdly, we have a, on average, 150 basis point shock on rate between last year and this year, on average. But I think people do not realize how long does it take to convert a shock on rates into NII. I mean it takes time because you need to roll your book through it. And therefore, for that reason, I was saying the second half of this year, the first half, the first 9 months of next year, where we're going to see another 30, 50 basis points of compression on rate for a total and then stabilization with a lag effect are going to be the most difficult. As we've said many times before, there are a number of government interventions in a number of economies. Germany is the one that comes most to mind. And already at the beginning of the year, we were saying this is great. This is not great for '25. It's great for '26. Why? Because it takes time to deploy and because while everybody waits for the deployment, people are frozen and they do not push. So I think we have a situation where structurally, I'm very positive. Most banks will give you a lot of views on '27 and '28. They're a little bit more vague on '26 for exactly that reason. And I think in a way, we think it's a straight line between now and '27 and '28, and it is -- there is a very difficult passing point between the next 12 months from now. And then there is a lift as rates have stabilized and everything is going to come through, as GDP is more stable, as the spending comes in and a lot of other things start weighing in. The other thing that I think is important is you cannot manufacture loan growth. So either there is or there isn't macro-wise. If there is, you run on it, and that's great. If there isn't, in order to create it, you drop margin. I keep on repeating that because sometimes it doesn't go very far. EUR 1 billion of loan growth for us is [ EUR 30 million ] of revenues and EUR 80 million of capital absorption. You can make your own return on investment on that. 1 basis points of margin for us is EUR 45 million, so 3x the loan growth of EUR 1 billion and no capital absorbed. So if in this audience, you're thinking, what do I do? I get another 1% of loan growth and I sacrifice 5 basis points in margin, or I defend my margin as much as I can, and I write the loan growth that I should be having without losing market share. And that's a question. And the question is answered on what is the NII ROAC of all the banks, because I can get you loan growth and I can get you NII growth. Can I get you those 2 things with an NII ROAC without cross-selling at 20%? No, I cannot. Now you can tell me go to 15%, but a lot of banks are below 10%. The second thing is, can we sustain the levels of profitability that we have achieved? We're at 20%. We are confident. Can the others get to 20%? Well, if you look at the targets for profitability of the European banks, they're very uneven. There are some at 20%, there are some at 15%, there are some at 12%, there are some at 10%. So I think a lot of it has to do with that. So margin is important. And our strategy going forward is linked to maximizing the loan growth that we can get without overpushing, without buying it, but maintaining the margin to maintain the profitability. The second part that makes European banks different is how much do you get on fee income and from which factors of fee income. So at the moment, if you are primarily exposed to investment and insurance, you're flying. If you're more broad, you're not. But the point is, over time, diversification wins. That's the other thing. They are not uncorrelated. If you have a lot of loan growth, usually your fees lag. If you have a lot of fee growth, usually your loan growth lags. So in a lot of expectation is people are taking it as silos and decoupled one from the others. We are not decoupled one from the others. If I do a certificate, it will have an impact on my NII. It will have a different impact on my fees. And so that is a little bit, I think my view is, if I look at the sector at the moment, number one, we are very optimistic on the short term. Maybe we're not optimistic enough on the medium term. And secondly, there is no dispersion between the profitabilities and the performance of all the banks. So everybody seems to be lifted up with a tide. And I think there will be a lot more dispersion in the next 12 months.

Now you said the 20% and 20% plus RoTE that you make is one of the highest returns across banks globally, really. You partly answered this. But when it comes to UniCredit specifically, how sustainable do you think is this for you to continue to defend this level of profitability in the outer years? And maybe you can also touch on some of the management actions that you've put in place.

So for us, firstly, let me start from there. The 20% is sustainable and our base of foundation to grow from, grow in terms of growth, not grow in terms of further increasing it, but sustainable foundation to grow from. It is, in a way, the quintessential outcome of our transformation over the last 4 years. That's what we consider. When you bring it all together, growth, efficiency, everything else, where did you get? The 20% is what we look at. If you look at it, we were a complete laggard before. Now we're a leader in profitability. And this is where we're starting from. The second point that I think is important, in my meeting with some of you, a number of you have asked and said, well, UniCredit is known for its discipline and the results it has achieved on operational efficiency. Yes, we were #6. We are #1 in cost/income. Capital efficiency, we were #10. We're #1. Cost of risk, we used to have 60, 70 basis points of cost of risk. We struggle to get to 15 at the moment. You're not known for growth. And therefore, as you tilt for the second part of UniCredit Unlocked to acceleration and growth, how are you going to do that? First of all, I think because we were so much better than everybody else on those 3 categories in terms of delta, people, in my opinion, missed a very important topic that if you look at '21 to date, our revenue grew 45%. Look at how many banks in Europe grew their revenue 45% between '21 and to date. So we did grow, and we are definitely in the top tier. That was pushed by a growth of fees that was one of the best in the sectors at 45%, and a growth of NII at 55%. But the NII grew at 55%, while, as you know, we completely tilted our portfolio and went from about 20%, 30% of our portfolio of lending EVA positive to now 90%. So we constrained growth on NII to move to an EVA positive portfolio that could also have an NII ROAC above 20% to prepare for this phase. Now looking forward, we will maintain the discipline on cost/income, we're not going to lose it. On capital efficiency, on cost of risk, we have the overlays to help. But the focus is how do we use all the investment we've made on the network, on technology, on data, on the hiring of people, on all of that to accelerate the top line in the face of headwinds from rate. And in our opinion, we have the following levers. Lever number one is the investments. Lever number two is that as our portfolio is, as a stand-alone, extremely profitable, now we can afford to be a little bit more lax and go to SCVA positive or slightly negative and look at overall client profitability at the margin without moving the 20% return on tangible. And then in many of our markets, there is disruption of M&A, and we want to take advantage of that. In terms of a strategy, what we will do on the transformation of our operating machine is more of the same. And now I see many banks are following our suit, organizational redesign, process redesign, way of working change, automation. Our new benchmark is not to be the better bank among the legacy bank, but it is to match what fintech do, because I do think that in 5 years, if you look at the progress of some of these fintech, one of them is [ Crif ] in Italy and attracts 1 client every 4 minutes. If we're not as efficient as them and we have the same client experience, we're going to get this intermediated. So that's on the operating machine, and we are confident we're going to be able to continue to progress. On the top line, and we said it many times, linked to this volume margin profitability, we're focusing on investing and accelerating the growth, focusing -- no longer telling our network go, but actually directing it per geography, per client segment and per product. Per geography, there will be much more deployment done on CE, for example, than there will be on Austria. Per client segment, there will be much more deployment on small cap, microcap, affluent than there will be, for example, on large cap. And products, given the factories, the internalization of insurance and the lending, there will be a lot more consumer finance and mortgages. There will be a lot more small business loan than large-cap loans. There will be a lot more of insurance and other fees than the rest. And we think that, that will allow us to gain market share in those segments and fundamentally get to a situation where stand-alone we can have a bank that gains sustainably market share month after month in the segments where we operate. Because if you don't have that, eventually, you can talk about M&A or whatever it is, but you always reach a wall. You do M&A, you step, you squeeze. But if you're not growing market share, not only growth in the segments that you have, effectively, you go back, then you do another M&A, then you go back. And instead, we want a viable model that continues to do that. So in the new 3-year ambition for '28, this is very focused on achieving that.

You've talked about M&A. And of course, the tenant financial landscape has been changing very rapidly, and that's a core market for you. Actually, those changes, you probably contributed to trigger some of them. And what's your strategy now in Italy? And how do you view your market position? I think you've talked in Q2 about market share gains. Maybe you could touch on that, too.

So Italy for us -- well, firstly, in terms of M&A, there are, let's call it, 2 plus 1 market that would make a very material change to our equity story. Material change meaning you care because there is a quantum difference in what we are and what is our profitability, our net income growth, et cetera. And that is ordered by size and impact on the rest of the franchise. Those are Italy, Germany, Poland, okay? Poland is the trickiest because by not being there and going organic, we don't have synergies, or we have more limited synergies than an in-market deal. So the others, it's not that they are not there, it's not that they are not important. Actually, the deal we've done in Romania, we are going to exceed our 20% return on investment target. But they are less material in as much as they add 100, they don't add billions, and therefore, they are less material on the equity story. For us on M&A is, number one, the management team on UniCredit will fail if we are dependent on M&A to justify our existence. So the base plan, and this is what we've done since day 1 in '21 needs to be such that we don't need it at all. And if you look at the plan that we have, we don't. Now we also look at it over time. And as I said from the beginning, we need to be ready to take the opportunity if it's there, or at least to try and get the opportunity if it's there. If you take Italy, the positive and the negative. The negative, we tried something that didn't work, for external reasons, but now we have all learned the lesson, but have nothing to do with the transaction per se, but they have to do through government interference. The other thing is that we confirm something that we said 3 years ago. During those 7, 8 months, 9 months, the franchise gets unfocused. Everybody is waiting for M&A, what's going to make me from my job? What are we going to do? Investments get put on hold. Why am I going to invest in client acquisition if I'm going to do a transaction, et cetera, et cetera. So when I talked about market share growth, it's because we had a plan for organic growth in the fourth quarter of last year that we were going to roll out and announce at the beginning of '25. As we launched the bid on BPM, we put it on hold. Now we reviewed it, and we're probably -- we're already in rollout, and we'll probably be going to give more detail on it in the next couple of quarters, or either with the third or with the fourth quarter results. What is the plan? Italy is an anchor for us. It's 50% of revenue, 45% of net profit. Italy has gone from about 47% cost/income ratio to 33%. It has gone from a revenue to RWA of 5.4% to almost 11%. It has gone from a rock in the lows to one of the highest rock in the group at 33%. And it is gaining market share in the sense that I was saying, in the segment that we are targeting, we're gaining. Now we need to accelerate without an M&A. So you should expect us hiring or seeing that we hire hundreds of people per the segment where we're going. We're training them. We have new credit models for the new segments where we are attacking. We have investment in technology that are at the end of -- are almost in their completion phase. We're trying to use AI more. I think a lot of people talk about AI, but when you look at the real impact that is having on banks as of today, it's not much. You should read an MIT report that just came out. But we are trying to do all of these things, always trying to maintain the return on tangible. So we will give more details, but I think Italy is on an upswing. And having clarity that we are going in this direction, there is nothing else, and we're not getting pulled in one direction or another is getting the entire team to accelerate, and I'm quite confident that we will deliver it.

You mentioned Italy being a core market, obviously, the second market being Germany. And as the audience know, the former German Finance Minister, Lindner, is at our conference later today. Germany, as you mentioned, is, of course, your other core market. Maybe 2 questions here. One, what are your prospects for HVB, your German bank? And two, of course, Commerzbank. You sent a letter to the German government, which you also published on your website. I think the merits of the potential combination are clear and you've illustrated them on a number of occasions already. But it doesn't feel like the government is on the same page and feels the same way about what you feel about Commerzbank joining forces with UniCredit. So what can you do about it? And how should we think about any potential next steps from here?

Look, I think for us, Germany, I think, when we started in '21, the first thing that I got as a volunteering of advice from many investors and research analysts was get out of Germany and get out of Austria, they will never cover the cost of equity. Today, HVB has a return on allocated capital of 13%, CET1 of 24%. They have an NII ROAC of 22%. They have a cost/income ratio of 35% or 36%, and they are one of the banks that contributes solidly to what we want to do. As importantly, I think, and this is often missed, HVB is what comes to a purest bet on Germany. Because if you look at the other publicly traded banks, you have Germany as a component of the whole. But when you look at the numbers, there are a lot of other things that goes into the numbers. If you take the numbers of HVB, it's pure Germany. International network and lending in Asia, in U.S., everywhere is not part of the equation. Consolidation of every business is not part of the equation. What is the equation is Germany Inc. And so it gives you an idea of where Germany Inc. is going with a very big focus on Mittelstand and large corporates because HVB is not a fully balanced bank across retail and corporate. It is a corporate bank with a smaller retail component. So where are we at the moment on HVB? We're confident on the direction of travel. The heavy lifting to get it where it is has been done. Now they are probably one of the banks that needs to try and grow as much as they can in their core market, not trying to complement it through other things that get consolidated in. There are 2 main changes that are going to decelerate -- are decelerating our growth in the short term. One, because of legacy, we used to do all the trading for the entire group in Germany. And therefore, the legal entity, which is what we report, would have the trading margin, not the distribution margin which is given to the bank, but just the trading margin. That increased revenue, but reduced the cost/income ratio, so increased the cost/income ratio and reduced the profitability, because it's not a very profitable business. That half has already been moved to the holding. The other half will be completed by the second quarter of '26. At that point, the return on allocated capital will be higher. The cost/income ratio will hold better. The total revenue will be lower, but it will be pure Germany with all the things attached. The second thing is that because of some, let's call it, regulatory headwind that attacked Germany, I think some of our competitors have mentioned that, some segments of large corporate, multinationals, et cetera, are getting allocated a much larger portion of capital that they were allocated in advanced model. You get tapped. That changes dramatically the profitability of that segment. That was one of the segments where we're leader together with another private bank. We are decreasing the growth rate in that segment, because if we were not decreasing it, our profitability will start going down significantly. Other people who have a lower bar profitability are increasing, while us and the other competitors are pulling back, because their ambition on profitability is closer to 10% than to 20%. And therefore, it works at that point. So you have seen some of that in our numbers, but that is stabilizing, and we are tilting more on the Mittelstand where we don't have that issue. And the growth there is quite encouraging. So as you move into '26, we should be much more pure as Germany. The trading is gone and the profitability will be better. And we should no longer have this tilting. Because we're doing what we need to be doing now, we will be complete by the end of the year. We will have absorbed it. You will only see the tilt on Mittelstand. So again, as we were saying before, no change. We do not need to do a deal in Germany to get there. That does not mean we couldn't create a ton of value in the deal to get there. And I think everybody realized there is a ton of value to be created at the right terms. Yes, indeed, without going on how we got here, and you can ask. But I think today, we're in a situation where we're comfortable. And we can talk about it later, but we are in a situation where we now have full control of our 29% physical shares in Commerzbank. That 29% is getting consolidated. Just use your consensus for '26 or '27 or '28. We're taking in 30% of it. We have an offset that we are reducing in terms of cost of the hedging we have because the entire position is covered on the downside to improve capital efficiency, but also to put us in a strong position if something happens. And that is going to -- and if you look at the return on investment on that, it's 20% plus. And it's locked at consensus. If you were to invest today in Commerzbank, same you would get 9%, 10%. And if you were to buy back our own shares, you would get 11%, 12%. So we've locked 20% on a strategic stake that gives us optionality. But because we've locked 20% that is distributable in line with the rest that we're doing in the group, we don't have any pressure. We can just sit there. We're no longer hostage of mark-to-market. We are no longer [ everything ] and see where the bank goes and wait. So everybody would like us to move, [ aggress ], et cetera. We're just waiting, and we're going to see. If things go well, we can't be happier. And if things don't, then all the investors are going to have a certain position. With respect to Commerzbank and the government, look, for the government, I understand it, and I wouldn't make a parallel only on the German government. I would say that the Italian, the Spanish, the Portuguese, the Polish, the German and many others all have a view on banks that brings them to be a lot more involved in the decision and to interfere a lot more than they did in the past. And that, I think, is defensible, because it is a key sector, and I hope people realize that without the gasoline that strong banks and capital market give, there will not be transformation of Europe, because there isn't enough money going around. So that's justified. The problem is that capitalizing on that through distraction, misrepresentation, myth, again and again and again, certain targets create across Europe the perception that transactions are good or bad, depending what they think, not what shareholders and the other constituencies fix. And therefore, that leads to a transaction that may be suboptimal because there is this change of this interference in the process. From our standpoint, we're respectful about the government. It is a critical stakeholder. We hope that they will see the light over time. And we hope that also Commerzbank will see the light of all time. But in the meantime, we have no pressure. We're sitting and waiting and seeing how they develop.

I'm conscious of time. There was a banking forum in Frankfurt a couple of weeks ago, and I think that showed that 78% of the audience believe that in one way or the other, you'll be successful in a merger with Commerzbank and that will happen eventually. How do you explain this disconnect? And maybe I'll ask you another question together so maybe we can be a little bit more efficient. In your Q2 numbers, you stated that distribution would amount to at least EUR 9.5 billion this year, and I think you said in excess of EUR 30 billion over '25 and '27. Since then, you started deploying some of the capital -- 200 basis points of capital to stakes like Alpha Bank and Commerzbank. How is this going to affect your distribution outlook?

Look, I was asked the same question in Germany. I cannot comment on what the audience think, but maybe it is an audience that looks at facts and figures and says that over time that will prevail on distractions and attacks and everything else and it's just a question of time. But I cannot -- in my opinion, there are certain transaction in Europe, some of which we are involved in, others not, but if left to the market, would create a lot of value for all of this economy and a lot of value for the shareholders of those banks. And I might say a lot of value for the employees and the clients of those banks. So maybe they are more focused on that than on the continuous find of new reason why to say that something will never work or reasons that actually are not factual. So I'm not going to comment on that. What I would say with respect to distribution, and this is -- thank you for the question. So let's take them one by one because there is a lot of moving parts. So point number one, just to be clear, we're in execution of the first tranche, and then it will be soon by the second tranche of the 2024 share buyback, remaining share buyback that we had to put on hold because of BPM. We couldn't move our share price while we were in a transaction. And then we have restarted straight after. So we're going to complete that. So that's there. Secondly, we confirm and I confirm that this year, based on what we have, we will distribute EUR 9.5 billion between cash and shares. Those EUR 9.5 billion are going to be 50% in dividends and the rest is share buyback. So that's confirmed. Now you get to the projection between now and '27 and beyond '27, okay? Now a few things need to be considered. In that projection, we said until today that we were going to distribute in excess of 90% of net income of each one of the 3 years, but that was total distribution. It included the ordinary, i.e., the percentage of the ordinary net income plus the part of excess capital return, which at the end of Q2, we said it's somewhere between EUR 8.5 billion and EUR 10 billion, okay? So the numbers are the same but different. What has happened is that we are going, between now and the end of the year, to have deployed something between EUR 6.75 billion and EUR 7.5 billion of that excess capital between stakes and other things like insurance internalization, et cetera. Yes, at a 20% return. So we are very happy we've done that. So versus the share buyback, I have 2 positives. One, I locked it in now and you know what it is. It's no longer I'm going to do a value of share buyback, and we'll see where your share price goes to assess what is the impact. It is locked in today. Actually, you have a price at which it is locked in. Two, instead of getting 11%, 12% return on investment, we have locked 20%. Because of that, we have improved VE to a much greater extent than we thought we would improve it, meaning that between now and '27, instead of getting to circa EUR 10 billion of net income, keeping the 20% return on equity, we are going to be well above EUR 11 billion in '27. You can do your numbers, we're well above. So we have now a 20% improvement in net income between the end of '24 and the end of '27. EPS and DPS growth are now going to be confirmed to be growing at double digit between '24 and '27. Before we were saying strong, we couldn't confirm double digit. Now we are at double digit. However, it is clear that if I have spent EUR 7 billion or EUR 7.5 billion or EUR 6.75 billion in stakes, they go off the excess capital. So the excess capital was at EUR 8.5 billion to EUR 10 billion. It goes off because of deployment. It was always returned or deployed. We deployed it. The second thing that has happened is just if you took a pro forma of -- and it's not going to be the number, because we expect authorization from ECB on the consolidation of Alpha in the fourth quarter, not in the third, and Danish Compromise in the fourth quarter, not in the third. But if we pro forma for Alpha full consolidation in the third and we pro forma for Danish Compromise in the third, we would be at a CET1 ratio -- and don't adjust anything else, starting from the 16.2% where we were, we would be at a CET1 ratio of about 14%, okay? So at 14% versus our target of 12.5% to 13%, you have anywhere between EUR 3 billion and EUR 4.5 billion of excess capital, okay? So if you sum it up to the EUR 7 billion, we actually have created a lot more excess capital because we deployed well, because instead of being at EUR 8.5 billion, EUR 10 billion, effectively EUR 7 billion, plus EUR 4.5 billion gets you to EUR 11.5 billion; EUR 7 billion plus EUR 3 billion gets you to EUR 10 billion. So we are at EUR 10 billion to EUR 11.5 billion. But of those, EUR 7 billion have already gone out. So we have a formal okay, but we will confirm it by the Q3 numbers. So we're going to change the way we guide you on distribution, and we're going to say that instead of total distribution being in excess of 90%, we're going to say ordinary distribution, so excluding the return on excess capital are going to be at circa, I would say, 80% of net income for all of these years. And we will go back to assess the amount of excess capital that we will return to you year after year until '27 and beyond on where it is at the end of the year. So on top of this 80%, there will be the return of the excess capital over time to top it up and bring it up. I think it is a lot easier to understand. The 80% is recurrent and continues. Incidentally, the 80% will be on a higher base because we are distributing what's happening with Commerzbank and Alpha. Therefore, for example, the dividend distribution, if you believe the guidance, is going to be in excess of EUR 15 billion. Before it was below. But like this, it is clear what is ordinary recurrent and will carry through after '27, which is a lot more, because in the old plan, we would return everything to '27, then it would step down because there was no more excess to give and it would come down. Now we are elongating that line to go through '28, '29, '30, by having a deployment that is better than what we had before. So that's where we are there.

Thank you. Shall we open up for questions because I'm conscious we have 4 minutes left, and then we can always come back. Questions from the audience, please? Please raise your hands and we'll come to you with a mic. There's one there in the middle.

I would like you to comment, please, on the efficiency of the German government plans, both the productivity of the fiscal contributions that they might put into the economy and also whether you think they'll be successful or not with cutting red tape, which I think is a big part of the productivity challenge.

So I think in general, the government plan is great. I mean nobody can criticize it. Maybe if you need to turn around and try to find something that is less great is I would have wished we had a European plan for everybody to contribute. So Europe comes together and we push together. But the plan will be a very strong impulse on Germany, and it will also have a very strong carryover on other market around because, obviously, Germany is the locomotive of Europe, which, by the way, is one of the reasons why I am so positive on Germany. In terms of the efficiency, we've started having some details. We don't have all the details. I am quite sure that given the level of interaction with everybody, it will be structured efficiently. So I mean, the best way to get as much as possible out of the plan, and I go back to that, is instead of getting it to weigh directly on German finances, you leverage capital markets and you leverage banks with guarantees, et cetera, to multiply its effect or maintain the same impact with a lesser deployment, which is why you need a stronger bank to do that. Otherwise, you hit concentration. So I am quite positive. My only point is it is a massive plan. And I have seen what has happened on similar plan in Italy and in another country. To cascade this down, and depending if they're going to take it centrally and they're going to take an agency to do it or they're going to cascade it down to the various states or whatever, let's call it, the bureaucracy is quite significant, but not bureaucracy in a negative sense. I mean, it requires a setup. It requires an administration. It requires a team. It requires each company understanding what they need to do, preparing the file, getting it certified, getting the subsidy. So it is not like that, which is why we said it's not going to happen in '25. I think from what I hear, we're going to have a lot more momentum in '26 and beyond. And I am quite optimistic because I think if you look at the degree of debate and dialogue between the government and the industry on what needs to be done, where, how, what is the best way, it is very encouraging. But by the same token, while there is that dialogue, if you are a company that is expecting to be impacted in some way, you're waiting. You're not doing things now, you're waiting. And therefore, that is why there is a little bit of a grind with an acceleration later. But in general, I have quite a positive view.

Time for a very last question. Maybe you can wrap up things, but we've got 1 minute or so. This time last year, on our stage, you were -- basically, we were testing the boundaries for Europe's project, where you announced the stake in Commerzbank. Then was the bid of Banco BPM. We can't really say that either of these governments have welcome you with open arms. Greece, on the other hand, as sort of you bought a stake in Alpha Bank, it's been almost a red carpet treatment with Prime Minister, Finance Minister, CEO, welcome you on the Acropolis in Athens. Is there anything we can infer from Europe's integration, capital markets and the competitiveness of the single market from what you've seen?

So I think -- and I think it's a little bit difficult to look at it that way. But in general, I'm more optimistic than I was before. What do I mean by that? Certainly, the government interference is at maximum and certainly it's getting, in my opinion, used or manipulated in order to derail transaction that should otherwise take place. However, the dialogue between governments and the dialogue between government and the European Union and the dialogue between government, European Unions and banks on what makes sense, what doesn't make sense is very high. It's at a very high level. In the past, there were all the statements of banking union, et cetera, et cetera, but you left the room and there was no follow-through. Here, there is. So the engagement is more than it has ever been in the last 10 years since I remember. The second thing is when government pushes in a different direction that is conflicting or perceived to be conflicting with the European Union, the European Union is taking a position that is much stronger than it was before, much more proactive. So you see that there is an attempt to bring that convergence that before, there wasn't. The third thing, we touched it upon. I think that many governments in Europe, maybe not the German one because of their finances, but most of the others are going to soon realize that if the European Union needs to do a transformation in infrastructure, in defense, in energy, in all their industry to grow and compete with the other economic blocks, the finances of the states are not enough. Balance sheet of the states are what they are. And by the way, balance sheet of the states always end up in the pockets of the taxpayers as well. So I think the more they look at that and the more they look at the impact that stronger, larger banks and capital market can have on the acceleration of Europe, I am optimistic that they are looking at that. So if you look at the difference with Greece, I can only rationalize, but I think they have had their trouble. I think they have beaten the bullet. I think today, Greece has a better credit rating than Italy. Who would have said that 5 years ago? And I think they have realized that what counts for their population, for their wealth, for their thriving, for the opportunity for the younger population is investment and growth. And if they can get, in an orderly way, in more investment to come from the outside to push that, they're very embracing of that investment as opposed to other countries that maybe have this view that, well, there is investment and investment, and I don't like this one because it's not my country or it comes from a part of another country, but it's not, because we also have that debate. Which part of the country is investing and should I accept that or not. So I think Greece in that is ahead. They're not the only one. I think the others, in my opinion, there is a trajectory and hopefully, it goes in the right direction.

Perfect. Thank you very much, Andrea. Thanks, everyone.

Thank you.