Welcome, and thank you for joining the Banca Generali First Quarter 2025 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Gian Maria Mossa, CEO and General Manager of Banca Generali. Please go ahead, sir. Good afternoon, and thank you for attending our first conference call on quarterly results. Let's say that, as usual, we will start with a comment on the results of the first quarter, and then we will give you a first update on the voluntary exchange offer we have received from Mediobanca. The slide three, as usual, you can see an executive summary with the most important events over the first quarter. We closed the first quarter with very solid profits. Recurring net profit closed at EUR 87 million, and also the reported overall net profit was pretty strong at EUR 110 million, thanks to a contribution of also the more volatile component of our P&L. From a commercial perspective, we closed the first quarter with almost EUR 104 billion, so a strong increase of the total assets, and the overall net inflows were solid with EUR 1.5 billion of total net inflows, with an improving mix and quality. Concerning the voluntary exchange offer, we have just appointed our legal international advisors. Our internal risk and control committee is on the way to appoint dedicated and independent advisors, and I have just received a mandate from the board of directors to explore the industrial rationale and the implication of the offer. Let's say that in the business update section, we will have time to deep dive on these topics. The first part of the presentation is about numbers, so slide four. As you can see, the recurring net costs were pretty solid: EUR 87 million or 6.1% higher year on year, and this is thanks to stable net interest margin and steady growth in the recurring fee business. Variable net profit: EUR 23.3 million, thanks to performance fees. Consider that from these quarterly results, we will include also Intermonte results, so you will find a comment every time that the item is impacted by Intermonte, and in the slide with the sum up of the P&L, you will see the contribution line by line from the acquisition of Intermonte. Let's start from the two major components of recurring net profit. First of all, page five: net financial income. As I said, pretty strong results with the net interest income pretty stable over time, thanks to the expansion of the deposit and just a slight reduction of margins of net interest income. Overall, net interest income margin closed at 2.1, and as you can see, also the trading gains and others contribute positively at 8.6, and here there is also a positive contribution from the integration of Intermonte for the global market components. The overall contribution was 4.7. Next page, total gross fees. Here you can see how solid the gross recurring fees are, an acceleration at 8.5%. The overall result is close to EUR 280 million, and here you will see a positive contribution from the asset under investments and also the other fees contributing in line with our guidance. Variable fees at EUR 34.4 million, this is, as I said, a good quarter for performance fees, thanks to the good start of the year, and the overall result for the quarter is at EUR 313 million. Focusing on the gross recurring fees, you see at page seven an acceleration of investment fees. We closed the quarter at EUR 238 million, or 8.5% higher year on year, and this is basically driven by the average investment asset expansion with a double-digit growth increase. The margins are pretty stable, considering a more, let's say, defensive posture of our portfolio manager and the volatility of the financial markets, especially in the last part of the first quarter. Page eight: other fees. Starting from the entry fees, you see a normalization of the contribution in line with our guidance, EUR 12.5 million, an acceleration of brokerage commissions at EUR 19 million, thanks to asset expansion and Intermonte contribution, so EUR 3.7 million, and banking fees higher, basically thanks to EUR 3.5 million of contribution coming from Intermonte. The overall results amount to EUR 4.6 million, with an increase of 8.5%. Next page, Page Nine: Payout Ratio. Let's say that the payout ratio is, as we see in our guidance, so no news, good news. If you look at the total fee expense and the part related to the net interest income, you see a slowdown of these contributions, so as I mentioned, with the reduction of the interest rate, we see reductions of the cost of these components, 2.6. The overall total payout ratio is mentioned in line with our guidance at 53.1%, and excluding some seasonality, let's say, all numbers are in line with our guidance. Next page, page ten: operating costs. You see in the overall total operating cost, there is a new item that is Intermonte, so here you can see the evidence of the total cost of the legal entity Intermonte, EUR 8.5 million. In the core operating cost, like for life, so without including Intermonte, but including for the first time in the different items, VGC, the overall result closed at 67.1, and basically the acceleration is due to higher FTE and the phase-in, the last phase of the phase-in of the national banking contract. Page eleven: year-over-year ratios. We have a great operating leverage, so operating cost and total assets, like for life, confirmed at 0.28. Cost-to-income ratio, once including Intermonte, confirms excellent level. Page twelve, as mentioned, you have the sum up with the P&L, the overall reported, and the contribution line by line by Intermonte. As you can see, the total banking income amounts to EUR 11.5 million, total cost EUR 8.5 million, operating profit excluding the operating profit at EUR 3 million, taxes, and then overall net profit at EUR 1.9 million. Commenting the overall results, so the EUR 87 million of recurring net profit and the EUR 110 million of net profit, comparing the same period as over the last year, you see a marginal increase of the tax rate at 25.3%, that is in line with our guidance of 25.6% for the full year. Now, a quick comment on the balance sheet and capital ratio. Also in this section, you will see no specific news. So far, so good. The overall balance sheet size continuing to grow, EUR 17 billion, was supported by client deposits, EUR 13 billion. The cost of funding started decreasing in line with the reduction of the interest rate at 0.93%. Next page, so page fifteen, you see the total assets and the interest-bearing assets. You see that with the expansion of the balance sheet, it has been invested mainly in the financial assets, so in the banking book. Now the banking book accounts for EUR 11.8 billion. The overall yield on the interest-bearing assets amounts to 3%, so the difference between this 3.02 and the cost of funding of 0.92, 923, equals to 2.1 as net interest margin, the overall net interest margin. Page sixteen, you see the capital ratio. Here you see for the first time the full implementation and the full impact of level four introduction, minus 3.8 percentage points of total capital ratio, and the overall impact of the integration of Intermonte, 2.3%. Despite these inclusions, the total capital ratio is confirmed very solid at 19.2%, leverage ratio in line with the previous year at 5.7, and then, as usual, let's say, a very solid and liquid, let's say, great liquidity of the bank with liquidity coverage ratio above 300% and net stable funding ratio at 230%. Next section: net inflows of assets and recruiting. Let's say, strong results in terms of total assets, almost EUR 104 billion. You see that the asset under management and the overall total asset under investments were slightly impacted, negatively impacted by financial market conditions, but overall the mix is improving. You can see at page nineteen where, on one side, it's important to highlight the constant recovery of the traditional life policies, EUR 15.0 billion, and then the marginal reduction of the overall managed solutions, but within the managed solutions, you see an increasing weight of our wrappers. Bottom left, now wrappers account for 50.8% of overall managed solutions. Also, the overall weight of in-house funds continuing to grow. This is basically driven by inflows. If you move on to page 20, you see the total net inflows for the quarter, that is in line with the previous two years, in terms of mix: EUR 500 million of asset under investments, so again stable compared with one year. Page 21, you see the contribution in terms of the inflows in terms of products with managed solutions at EUR 400,000,000, that is higher than the same period over the last two years. This is driven basically by the constant growth of our financial wrappers. They are performing well and are the preferred choices of our clients also during more volatile times. Bottom right, you see the ongoing rebalancing among third-party funds and in-house funds with positive inflows, also in the first quarter for in-house funds at EUR 200,000,000. Page 22, there is the breakdown in terms of acquisition channels. Again, we have numbers strictly in line with last year. These are very solid numbers also because we have a rush at the end of the year because of the completion of our three-year business plan. Thinking of ongoing contribution of existing sales force in line with last year, it is a confirmation of a very solid and healthy network. In terms of recruitment, you see that it is more or less in line with last year. There is a slight deceleration from the retail and card banks. The perception is that the traditional banks are in the, let's say, wait-and-see mode due to the overall reorganization of the banking system. Page 23, you see the results on achieving net worth. Overall, EUR 600 million, of which EUR 200 million in asset under investments. Year-to-date, we are slightly lower compared to last year. In terms of product mix, we are slightly higher compared to last year in terms of inflows in asset management products for the two reasons mentioned before: the recovery of the traditional life insurance and the solid inflows in the financial wrappers. Okay, let me close the part on the financial and commercial results, saying that we are very happy with these results. The financial advisory network are in good shape, and we are waiting for the communication of the pillar of the new strategy that we should have announced in June. Of course, we have suspended the announcement of the next three-year strategic plan, but we are continuing working on very important and transformational projects for the bank. I mentioned just three of them: Intermonte, all the, let's say, integration groups are working very well. The second is about the Generali partnership, and I will go through the new, let's say, the new agreement, strategic agreement with the Generali. The third one, we are integrating artificial intelligence in all the commercial approach and all the phases of the relationship with clients and bankers, so we are confident to find a way to provide better support for the financial advisory net and increasing productivity. Having said that, we received this voluntary exchange offer from Mediobanca. As you know, the major contents of this offer are about the aim at creating, let's say, the leader in the wealth management in Italy. The offer, let's say, recognizes the consideration for each shareholder of Banca Generali tender to 1.7 ordinary shares of Generali, 50% Generali. There are two main conditions. The first one is about the floor, a minimum size of shares, is about 50% plus one. The second is that there is a condition regarding the negotiation and the conclusion of the main terms of the strategic partnership agreement, including asset banking and asset management. Mediobanca communicated also the timeline of the offer. Now, page sixteen, you see the reaction of the board of directors. We call a board of directors the same day when we receive basically the offer, where we formally acknowledge this offer and where we specify that this offer was neither solicited nor agreed upon. This is important to say, so it was a surprise for us. Of course, we confirm that the board will do its duty, its job, expressing the opinion on the offer within the terms and according to the procedures stated by the law. This morning, we had a second board of directors where we communicated the appointment of our advisors, legal and financial advisors. In the same meeting, the internal risk and control committee confirmed the willingness to appoint dedicated and independent legal and financial advisors. Third, as mentioned at the beginning, I received a mandate to explore the industrial rationale and the implications of this offer. As we said, at the core of this offer, there is a strategic agreement between Generali and Mediobanca. In the offer, we are mentioned from this agreement, so probably it's useful for all of us to remind the current agreement. The current agreement is based on two different pieces. The first one, the overall framework agreement with the Generali Group, was signed in March 2018, and then we signed an amendment a few weeks ago. Let's start from page two-seven, where we have a description of the overall framework. The framework in this agreement has two major legs, so two major points. The first one is about the brand license agreement. Now we have received the freely use of Banca Generali brand, and the use of brand is in conjunction with the insurance distribution agreement. This license agreement for the use of the brand may be terminated, and there are two clauses. The first one is change of control clause, and the second is about the termination of the insurance distribution agreement. The second part of the framework is about the IDA, so the insurance distribution agreement, duration ten years, renewable for an additional ten years. There is an exclusivity right, so we distribute only for the insurance business Generali products. There is a restricted distribution network, so in exchange for this exclusivity, Generali cannot sign contracts with a selection of potential competitors of the bank. There is also, in this case, a termination clause. In particular, in case of termination by Generali of the brand license agreement, the exclusivity will be lifted and may be terminated by Banca Generali. Of course, on the other side, the same can be said for the restricted distribution network. From that moment, Generali could, let's say, decide to work with the competitors that we listed in the agreement. It is important to understand that there are these two aspects that are strictly linked: the brand, the distribution agreement, and two major clauses, termination clauses that are change of control or termination of this insurance distribution agreement. In the last months, let's say that we have been working hard for several months, we finally agreed to sign a new amendment with two major contents. One is an amendment of the insurance distribution agreement, and the other one is a new framework of strategic partnership between Banca Generali and Generali to distribute our products through the Generali distribution channels and a way to, let's say, to reach also Generali clients. I do consider this contract well balanced. We worked hard, and as I mentioned, the insurance banking part would have been a pillar of our communication with the new three-year strategic plan in June. It does not mean that we stopped this framework. It means only that we will not communicate numbers until the end of the offer from Mediobanca. Page 29, you have a deep dive of this insurance banking agreement. There are three different ways to reach clients, Generali clients. The first one is well known as we regularly publish data numbers in the annex of this presentation, so there are the financial planning agents, and here the aim is to accelerate the numbers of financial planning agents. The second way is to provide Generali agents with selected numbers of banking products and services and with all the remote support, remote banking support from the bank. The third way, normally for the high-end clients, is to explore cross and upselling synergies through teams between agents and financial advisors. We are launching a small pilot to test also this channel that is being used by other competitors. Just to say that for us, the part of the business of Generali as distributor of the product is important, and there are specific clauses in the contract. On the other side, we already started working within Generali to cross and upsell with the financial planner agents, but there is also another way to achieve the same result. The last slide, the slide three-zero, is about the final remarks, and I think that it's really important to understand what I personally consider the priorities of the bank. These priorities are, let's say, the starting point for any transaction that involves the bank directly or indirectly. The first one is pretty clear. I consider the bank the most important pure player in wealth management because at the end of the day, our purpose is just to protect and enable the saving and investment of our clients. This is what we know how to do. We do this one. We strongly believe that this is our mission, and I think that we are an exceptional player because we are 100% dedicated to protect and enable the savings of our clients. The second point, there is our vision. Our vision is that we're going to be the first private bank, not in terms of assets probably, but for sure in terms of quality of service, innovation, and sustainability. This is for us far most important because we wrote our vision and our mission in the most difficult moment of this bank. It was 2016 when, unfortunately, our friend and our previous CEO passed away. It was a very difficult time for the bank. It was a moment in which we agreed with the financial advisor the fact we had a clear vision. It was about the scope, to provide private banking services in a different way. We also wrote our mission. The mission is pretty clear in the third point, that is where I'm strongly convinced that our extraordinary results that we achieved in these 12 years since I had the honor to join this bank are driven by the long-lasting relationship between clients and financial advisors. The financial advisors are our trusted professionals and are the most important assets of this bank. We are very united. There is a strong sense of belonging. We are a great team and have great respect for the day-to-day business of this professional with our clients. The fourth one, which is close to the first three, is that, as you well know, this is a people business, and we say that the success of any transaction mostly depends on the respect of all the people who contribute the most to the success of this bank. Last but not least, because for me it is far most important, we represent the interest of all our shareholders because the shareholders have placed their trust in the bank and their trust in the management team over the years. We have great respect of our clients, great respect of our financial advisors, great respect of the people working in this bank, and last but not least, great respect of all the shareholders and in particular of the minority shareholders. Thank you, and now I hand over for the Q&A. Thank you. This is the call for conference operator. We will now begin the question and answer session. Anyone wishing to ask a question may press star and one on the touchscreen telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. We will pause for a moment as participants are joining the queue. First question is from Luigi Deverlini, Equita SIM, please go ahead. Hi, good morning. Thank you for taking my question. The first one is on the chapter one evolution. Could you elaborate on your expectation for the chapter one over the coming quarter? What key factors should we consider in assessing its trajectory, including Intermonte? The second question is on the new framework agreement. Can you give us more color on the potential upside related to the insurer banking model? The third question on the offer of Mediobanca, without referring specifically to any ongoing consideration, could you discuss what strategic advantages Banca Generali sees in potential consolidation or partnership within the wealth management sector, and how the management views the role of increasing scale and synergies in improving competitive position in the sector? Thank you. Thank you. I will start with the second and the third, and then I will hand over to Tommaso Russo for the CP1 evolution question. The question of the new framework and so the potentiality of insurer banking agreement, I think that you should start by considering that Generali is a very strong brand, is a very wide customer base, and with the penetration limited to the insurance products. If you know the penetration of the insurance product on the total household wealth, you can work out easily the potentiality of the total assets of the clients reached by Generali distribution channels. Let's say that the potential is huge. On the offer, let's say that in this situation, I have commented on a potential offer from Mediobanca. There was noise on this for the last five years. I have always said that, basically, from an investor perspective, the combination could make good sense, as our impression is that the two businesses could be complementary. Of course, this is in our saving analysis. Just because I consider Banca Generali the best player in wealth management, there is great capabilities for the corporate investment banking in Mediobanca. We bought Intermonte because we believe that you can create synergies bringing corporate investment banking and wealth management closer. This is clear. Our business is an economy of scale business. Having said that, from a business perspective, this is really crucial for certain fundamental aspects like governance, business operating models, all the commercial offer, the distribution assets. Last but not least, we have the financial perspective because it should be necessary to understand the underlying assumption of any synergies. It's too early to express any opinion on the synergies and on the rationale of the final result of the offer. As I mentioned, this is a people business. It mostly depends on how you seem to bring two cultures closer and how you define the future purpose of the potential combination of the two entities. It's a long journey, a very long journey. From today, since I just received a mandate by the board of directors, we will try to better understand the rationale and the implication and that implication of this offer. For the third one, I will hand over to Tommaso. Thank you, Deverl Maserang. Let's say that our total capital ratio is still very high because if you compare with the REF requirement, we have at the end of the first quarter 19.2% of total capital ratio, which is compared with the REF already going five or chapter one and 13% for the total capital ratio. We are back basically to the level of 2023. The reduction, which is in the first quarter of 2025, was anticipated to the market because we had the impact, which was, again, anticipated to the market of the introduction of the new budget regulation, which has an impact mainly on the operator risk, while the impact of Intermonte is in the range of 2.3 percentage points. Also in this case, the impact was anticipated. I think that we're starting with the market that was expecting. I can say that also as a market that this is not going to change to have any impact on our business policy because it is unchanged. This is a confirmation that going forward, we expect that we'll be a growth in the next quarter, which will be basically linked to the net income that we will have quarter by quarter. The last point is that the 90.2% has an implied dividend of the 84% of total net income of dividend payout, which are more or less in the range of EUR 0.80 of net income per share. Thank you. As a reminder, if you wish to ask a question, please press star and one on your telephone. Next question is from Marco Nicolai, Jefferies, please go ahead. Hello. Thanks for taking my question. One on the acquisition of Intermonte. Given that now you consolidated the business, I was wondering if you had another thought about the synergies you can create from this combination. What's your expectation in terms of contribution in general of Intermonte over the next quarters? Another question on the business plan. If I understood correctly, you decided not to update the market with a new business plan. Are you just postponing until you have more clarity of what happens to your bank in the future, or you just won't publish it at all? Thank you. Thank you. Let's say that the more we know each other, the more I'm convinced that this is a good deal for us and a good deal for them. There is a standalone business plan of Intermonte, and things, in my opinion, are going better than expected. The first quarter, for example, was higher than my expectation, honestly speaking. The expected for this year, a result that could be higher than what the consensus implied last year for Intermonte. There are plenty of synergies. It takes time. We see some synergies in the short term, some in the medium term, and some in the long term. I always say that this deal will be disruptive for the bank because we are doing something unique. We are, as I say, I consider the bank the best wealth management, at least pure wealth management in Italy, and we are providing all our bankers with these important capabilities. In the brokerage and in the trading, we see other synergies without considering WebSIM, that is an excellent platform. We were working these synergies, and we would have communicated numbers at the end of June. I love to be transparent with the market, so I think that we must provide guidance for the long term. We will communicate our three-year strategic plan in the future once we fully understand, let's say, the development of the offer. It's not just we will postpone, but we continue to work on it. Thank you. Next question is from Elena Perini, Intesa Sanpaolo. Please go ahead. Yes. Good afternoon, and thank you for taking my questions. Actually, I've got two questions. The first one is about your performance fees. They were still quite strong in the first quarter. I would like to know if you can provide us with some information about the distance versus high watermark, while we can imagine that April was a poor month in terms of contribution. Regarding Intermonte, if you can just let us know the main areas of contributions. I imagine in terms of, well, of top line, the trading line and the commission line. I suppose we will have the staff expenses and G&A and then D&A as regards the costs. Just for a confirmation for updating our model. Thank you. Thank you. On the performance fees, of course, you're right, April was a two-hour month. We are launching new strategies. The two general managers are meeting with the network in this day. There is an important workshop where we communicate all the new products. We do expect important infos in these new strategies, and they should provide performance fee for the last part of this year. On the stock, we have some around €2 billion-€3 billion that are very close to the high watermark. Depending on the financial market, we could see performance fee again from the next weeks, depending on the market, of course. In this moment, I would basically confirm the target for the full year in the range of €78. Let's see the market. For Intermonte, let's say that, as I said, we have been working to the business plan for the last few months, and we haven't completed yet the analysis. Basically, we confirm what we announced during the previous conference call. We see synergies in the brokerage fee space. We see synergies in the, let's say, certificates, structured products, and derivatives. We do see synergies in the combined model, let's say, wealth management/investment banking. The result is about probably M&A fees, but even more important infos. We will provide details in the coming months, as I said, after more clarity on the offer. Thank you. Thank you. If I may, I've got another question about your management fees, the pure management fees. Actually, they were basically flattish versus the fourth quarter. We can expect, I imagine, some pressure due to lower average assets under management for the second quarter. We can expect, according to market trends, a recovery in the second half of this year just to have an overview of the trend of this very important line of your P&L. Thank you. I'll say that on the stock, the management fee were impacted negatively by the volatility of the market with recovery in these days. Depending on, let's say, the next week, it could be that with the recovery, we recover also the management fees. There is some privacy, some active managing. The financial wrappers and other solutions are positioned with a more prudent profile. This is tactical. More in general, depends also on the infos. Let's say that our perception, looking at numbers of record in the beginning of May, the reaction of the financial data network is positive, but most depends on the next weeks in terms of markets. I don't see in this moment any particular negative impact on the overall management fee, neither margin nor commission. Okay. Thank you very much. Next question is a follow-up from Luigi Deverlini, Equita SIM. Please go ahead. Hi. Thank you. Two follow-ups, if I may. The first one, could you quick update on the BG Swiss private bank project? The second question, one of your competitors has highlighted strong client activity and inflows into ETFs. Are you observing a similar trend within your client base, and how do you plan to capitalize on this growing interest? Thank you. Thank you. On the BG Swiss, we are in line with our expectations. We are close to close important recruitment. As I said, the onshore business mostly depends on recruitment or acquisition of smaller external asset managers. I do not think that the current condition, the current offer, will impact negatively on the negotiation process. For the, let's say, the development from the Italian perspective of this business, we have implemented almost all the products we had to launch, and we start seeing positive numbers. Let's say that overall, I'm confident there is a regulation change, regulatory change, and we are studying the implication. We are considering the possibility to open a branch in Italy. This could accelerate or impact negatively our targets depending on some conversation with regulatory. As of today, I think it will be positive for us. In terms of ETFs, we have a significant amount of ETFs. We have volumes of around EUR 25 billion-EUR 30 billion per year of ETFs. In the three-year strategic plan, one of the projects was about how to internalize and part of, let's say, the margins generated by these volumes. I used the past, but let's say that we have been working, we will continue to work on it despite, let's say, the three-year strategic plan. We see some synergies with Intermonte on this specific topic, and we have some strategic goals. Thank you. Next question is a follow-up from Marco Nicolai, Jefferies. Please go ahead. Hello. Quick follow-up. Can you please remind us your guidance in terms of NII costs and also net inflows? Apologies if you've already said the last one. Yeah, just a quick reminder on the guidance. The current guidance, and we said that we would update this guidance during our strategic plan. Let's say the current guidance that we communicated in the previous conference call is of a net interest income above EUR 300 million, of a growth of the operating cost, sorry, the core operating cost in the range of 6-8%. The third one was net inflows. We said total net inflows above EUR 6 billion, total net inflows in asset under investment above EUR 3.5 billion, and they are all confirmed. Thank you. You're welcome. For any further questions, please press star and one on your telephone. Mr. Mossa, there are no more questions registered at this time. Fine. Thank you for attending our conference call, and have a good weekend. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephone.