Credito Emiliano Stock

Good morning. This is the Chorus Call operator. Welcome to Credem's Conference Call presenting H1 2026 results. [Operator Instructions]

Let me now turn the conference over to Mr. Stefano Morellini, General Manager of Credem. Mr. Morellini, you have the floor.

Good morning to all of you, and thank you for logging in, even though we are very close to the summer holidays. Together with me, I have Giuliano Cassinadri and Daniele, our CFO and Aharon Sperduti and the entire Investor Relations team. It was a first half that was greatly satisfactory for us, reconfirming our ability to achieve excellent results, thanks to a growth strategy, enhancing at best -- enhancing our business model at best. Growth, as I already told you that we could drive in an organic way and also potentially looking into opportunities, we could also grow through M&A.

The way we do banking and these results confirm it is a benchmark is a credible reference in the market, both for families and corporations. And we constantly support them with the utmost quality products. And at the same time, we really support the country, and we help savers, and they find in our group a reliable -- safe and reliable guide capable of enhancing their savings through careful advisory and targeted customized advisory.

This is the result of the day-to-day commitment of our professionalism and our sense of responsibility and accountability and of all our people, all of our staff. And I would like to really warmly thank them, congratulate them and thank them for their efforts.

So let's now drill down into the results and highlights. We are on Page 2. We would like to reconfirm for H1 2026, our highlights, our point of strength. First 6 months were closed with a net profit of EUR 312.9 million, up 12.5% versus H1 2025, net of the one-offs. The one-off of the merchant acquiring sales. We confirm our profitability with an adjusted ROTE, annualized ROTE of 15.9% and an annualized ROE of 14.1%.

Our asset quality is at the top of the banking system, not just in Italy, but also at European level with an NPL ratio of 1.5%, and a net value of the ratio equal to 0.7%. In addition to that, our capitalization is quite strong and enables us to confidently face our growth path. CET1 ratio lands at 16.22% with a buffer of about 768 basis points.

Let's now have a look at the results we achieved in our site growth. We move on to Slide 3. And also size-wise, we still -- we show positive signs also for the first half of 2026. Loans went up year-on-year, went up 2.1% and direct funding went up 4.5%. Both these results are definitely sizable. And overall funding is equal to EUR 2.7 billion. Most of it is new funding from asset management and insurance.

The distinctive feature that characterizes Credem and confirms the ability of the group to be able to really tap the full potential of a diversified business model, really supporting revenues and streamlining revenues. Also growing is the number of customers, our customer base that went up 5% versus H1 2025 and landing at 1.7 million.

Let's now look at business diversification, our revenue sources. We are on Page 4. You see our revenues are diversified. And on a quarterly basis, they have been constantly growing. And I'm very happy to highlight that recurring revenues is up and achieves very meaningful level, levels of absolute excellence, EUR 495.5 million. This is even higher than the total revenues for the same time period of 2025.

In the second half, in Q2, revenues landed at EUR 545 million with an excellent balance between NII, 47% of total revenues and NIM equal to 44% of revenues. During the quarter, a positive impact was derived also from nonrecurring items, that is to say our trading and commissions, performance fees and trading activities.

Let's have a look at the different business lines in the next slide. We still retain a profitability level -- a high profitability level, both in Commercial Banking, closing the first half at EUR 169.3 million, giving a 54% contribution to net profit and also in the private banking and extended banking services. Extended banking services and consumer credit landed at EUR 45.9 million, accounting for 15% of the total consolidated profit for the first 6 months of the year.

Excellent results achieved, thanks more specifically to the excellent work and excellent quality of our assets and how we really protected our sales spreads and how we manage to grow. Wealth and Private, including both Credem Euromobiliare and private product factory, we have an overall result of EUR 106 million, accounting for about 34% of the group total profit. And Wealth and Private is also driven by the excellent growth of assets under management over the last quarters.

Our ability to have a business lines that can really express excellent levels of profitability is really driven by growth that is made to be sustainable over time. And therefore, we can look into opportunities to grow through M&A if accretive and valuable to further improve our strategy could be taken into account.

Let's have a look at our growth nationwide, our value creation nationwide. We are on Page 6. We have a widespread franchise throughout the country and really that bears witness to our commitment to grow throughout the country. Our geographical franchise is well balanced and very thorough, mirroring the soundness of a banking group, of a national banking group, and we want also to be very close to our customers, Banca del Territorio, so to say. And we have deep roots in the north, generating high volumes, but the way we are faring shows that we are really a national franchise. We are very competitive also in Central and Southern Italy.

Direct funding and Loans, it's a very balanced ratio between them. And a common piece of information that is common to all areas is indirect funding that really proves that our advisory model is really performing throughout Italy. And this match between being independent, being at the same time, very close to our customers and being very sound at European level. These are all factors that enable us to create a sustainable growth model, generating value over the long term for all of our stakeholders.

Let's now -- in the next slide, let's have a look at the main items in our income statement, our P&L. We are on Page 7 of the presentation. And our NII performed really well, and it's up more than 5% versus the previous quarter, whilst the NIM, core NIM, net of nonrecurring items, such as trading and performance fees went up sizably, thanks to the excellent net, net production, net delivery of services. Revenues went up 8.5% versus the first quarter of 2026, and almost 12% versus the first half of 2025. Also thanks to the results we achieved in trading and to the contribution of performance fees.

Over the quarter, we really proved that we can really manage cost items, retaining at the same time, a constant commitment to really come up with new projects and IT systems to really support the size growth of our group. Payroll is growing, but is declining 3.5% versus the previous quarter, because we had an advance of the seasonality effect and the holidays effect. And then, of course, we have ICT costs, that are controlled. And our operating profit is up 20 percentage points versus the same time frame last year. And the cost of risk is very limited. It's very low, and it's 9 basis points versus the previous year.

The net profit for the first half is EUR 312.9 million up 24% -- 24.3% versus -- well, quarter-on-quarter and up 12.5% year-on-year. If we look at the adjusted net result, the first -- it's EUR 278 million for the first half of 2025, net of the benefit we derived from the disposal of merchant acquiring activities.

Let's now have a look at the -- on Page 8 of the different items. The NII grew nicely over the 2 quarters after EUR 244 million recorded in the first half, the second half -- sorry, the second quarter is up EUR 257 million. And the performance was mainly driven by the favorable positioning in place on interest rate risk and the constant growth of commercial volumes, and maybe anticipating some of your questions, we look at this year's NII with a much more positive eye versus the previous years with an NII that we expect growing vis-a-vis versus 2025.

Let's have a look at the customer spread. We are on Page 9 of the presentation. We do confirm an excellent ability to really support our profitability. Our customer spread is up for the third quarter in a row, and it's higher than 3%, an excellent level, especially considering our -- the level of our asset quality and therefore, a profitability adjusted by the cost of risk. And the resilience in our customer spread stems from the excellent result of our returns on loans and an accurate management of direct funding, thanks to our teams.

Let's now move on to our securities portfolio. We are on Page 10 of the presentation. If we compare it to March, our securities portfolio is quite stable, with a slight shrinking of overall volumes to EUR 12.2 billion and also as a consequence of some sales of some disposals that we made over the second quarter of 2026. The portfolio still retains a high level of quality, and it's highly diversified. The overall duration is 4.2 years. The impact of Italian govies is 39% with a component of HTC that is 81%. We are constantly monitoring the market to seize opportunities for better positioning and to really enhance the contribution to our NII.

Let's have a look at the commission performance. We are on Page 11 and noninterest margin. Here, we are very, very happy and satisfied to look at the results achieved in commissions. Commissions and fees and commissions -- extra one-of-a-kind result that reconfirms what we had already told you in advance that is to say that this item will be the main driver for revenues over the next quarters, especially thanks to the strong synergies we managed to unfold between our networks and product factories that are really supported -- well supported in our business model.

And recurring fees slipping off in terms of financial activities and performance fees went up vis-a-vis the same time period in 2025, and it's really a sizable increase equal to 18%. And more specifically, management fees landed at more than EUR 153 million, net of performance fees that were EUR 23.4 million. The result was also driven by a number of placements that over the quarter were worth more than EUR 11 million.

If we look at Wealth Management, which is also growing, the insurance results land at EUR 30 million in the first half. In excess of EUR 150 million is banking fees and EUR 27 million instead is the contribution provided by the financial activities stemming from some profit-taking activities over the first 6 months.

Page 12. In addition to really sustaining and supporting revenues and keeping our business sustainable and keeping costs in line with the previous quarter, we retained a level of cost that is in line with the previous quarter without giving up our commitment to really support our size growth by hiring 213 new colleagues since the beginning of the year, and we had a very strong activity or focus in -- on IT and a number of projects. And in the -- compared to the first quarter of 2026, payroll went down 3.5%, mainly due to holiday taking and a seasonal effect. Admin expenses as a trend is still tied in with the commitment the group has taken to support growth.

Generally speaking, the base -- cost base is strictly correlated with the growth of our group, the size growth and also tied in with the excellent growth of revenues that we think is sustainable also for the next quarters.

Let's now move on to loans to customers. We are on Page 13 of the presentation. And we keep growing our loans to customers, 2.1% is the growth year-on-year, confirming both the excellent work we did as a group and also the effectiveness of our model. More specifically, short-term loans went up 4.6% year-on-year. Residential mortgages and leasing went up 2.1% and 2%, respectively, versus 2025, and consumer credit driven by our company, Avvera, is recording a 12.6% increase year-on-year and lands at EUR 4.4 billion.

Despite a market scenario that is really challenging and the strong competition, we are confident we can keep on improving our market share, thanks to the strong synergies we can unfold through our business model and one of the kind work, the extraordinary outstanding work of our sales network.

Let's now talk about inflows. It's Page 14 in the presentation. In the first half of 2026, we landed with an excellent result, almost EUR 2.7 billion overall on net inflows. Very positive are the flows coming from assets under management and insurance landing at EUR 1.3 billion. It's volumes that are giving a very strong contribution to our commission items, and that will still support our revenues in the coming quarters.

Our organic growth strategy is based on increasing inflows and the ability to acquire new clients and to further -- in further consolidating our role as being a reference -- a point of reference for our clients to manage their savings. And the results achieved in this second quarter prove that we are going along the right lines. So net direct funding is basically flat, EUR 69 million. And it's a natural development and consistent with our advisory activity that led to the changing the channeling of liquidity into assets under management. And then wealth management, a very positive performance, EUR 1.5 billion worth of assets under custody, and thanks to the placements of govies.

We are now on Page 15 of our presentation. The excellent performance in our net production led to an increase in direct funding from customers, where our direct deposits go up 4.5% year-on-year. And then we have inflows from insurance. Assets under management and insurance landing at EUR 51 billion with a 13.3% growth versus the first half of 2025.

Let's have a look at the asset quality and the metrics. Our asset quality metrics are reconfirmed at levels of absolute excellence at the very top of the European banking universe. Cost of risk is very limited and lands at 9 basis points, confirming the effectiveness of our credit assessment policies during origination and the lack of signs of deterioration to be detected. NPL ratio 1.5 is lower than the system average, both in Italy and in Europe. And also, we are not seeing any signs or meaningful signs of deterioration. And therefore, our rate is 0.47%. That's our default rate. And we focus on the economic scenarios. And at the same time, as an objective, we want to have a cost of risk in line with the previous years, and below 20 basis points.

Let's now move on to the NPL coverage. We are on Page 17 of the presentation. Also looking into the NPL coverage, our group is at the top of the industry, both in Italy and abroad with a coverage ratio of 56.4%, and that includes additional coverage coming from shortfall coverage of Pillar 1, and so it stands at 59.9%. These levels really give us a competitive advantage, should there be any changes in scenarios as it happened in the past and make us confident in our pathway towards really rolling out our growth strategy.

Let's now look at the bond issuances and maturities. We are on Page 18 of the presentation. If we look at institutional wholesale funding, we were back in the market in May with the issuance of a EUR 500 million green bond. And let me remind you that there are no bond maturities in 2026. The margin on the MREL requirement is 9.2 percentage point.

Let's now have a look at liquidity ratios. Page 19. As to liquidity ratios, we have very high levels of net stable funding ratio and liquidity coverage ratios, landing respectively at 140% for NSFR and 171% for LCR.

Let's have a look at capital, consolidated capital ratios, Page 20. And if we drill down to a greater level of detail, we see our capital position, confirming the excellent soundness of the group. So capital ratio, both at bank level and holding level are at very high levels, respectively, 17.45% and 16.22% for Credem Holding, with a buffer versus the minimum requirement of roughly 768 basis points. And that really enables us to fully support our growth strategy, both organically and gives us the necessary flexibility to look into opportunity to grow through M&A, and really enables us to take up any impact that may derive from the volatility of markets or any other external scenario.

We're on Page 21, the last table for this presentation, the last slide before we move on to your questions, I'd like to wrap up the presentation with a summary that really tells you in a very effective way about our DNA. Everything starts from our very foundations. We've been in the market for a long time and with the capital soundness at the top of the industry, excellent portfolio quality. And thanks to this very sound financial standing, funding, the market is rewarding us when it comes to institutional funding, wholesale funding, and we have well diversified our wholesale funding, and we can therefore, leverage it to really finance the growth, fund the growth of our loans. We can improve the relationship with clients. We can have advanced advisory and assets under management are also in the forefront, and we help our savers. We help our clients to turn their deposit into value-added investments.

We look at the value chain, and we fully control it. We have our own internal products -- internally developed product. And therefore, we can really leverage the margins. We have a fee-based business model. We have stable, we generate stable and recurring fees and commissions that are not impacted by interest rate volatility, therefore, maximizing the overall profitability of our group. And that really generates -- organically generates capital and retains an excellent capital soundness. It's therefore, a resilient business model, a profitable one and a sustainable one over time.

I would like to thank you very much for listening to us, and now let's move on to the Q&A.

This is the Chorus Call operator. [Operator Instructions] First question comes from the line of Elena Perini with Intesa Sanpaolo.

I have 3 questions. The first one is on your NII. You gave us a guidance of growth versus 2025, mainly driven by rates and volumes, even though volumes are faring well, too. But could you elaborate on your sensitivity in that respect, your sensitivity to rates?

And the second question is about your profit. If we multiply by 2 your half year later, you practically would land in line with what you achieved last year, though even with the contribution of the capital gain coming from the disposal of the merchant acquiring. So a comment on NII and on other items I mentioned before, how can they move? What do you expect it to happen? What is the level you're going to reach as far as net profit is concerned?

And then one last question. Are there any novelties about your capital when it comes to the adoption of CRD IV by member states, that could free up 120 bps of basis points of capital. Would that be helpful for further M&A transactions? So -- and could there be a role for more generous somehow remuneration policy vis-a-vis your shareholders?

Thank you for your questions. Let me tackle the first one about the guidance on our NII. Compared to our expectations for 2026, the expectations we have in 2025, we expect to close 2026 with a growth of at least 5% year-on-year. First of all, thanks to growth in volumes. Here, we are more optimistic, and that refers our commercial strength.

And then secondly, the way interest rates are faring, are going, which is really supporting our NII. And then as far as other guidance items to get to the net profit, maybe let me dwell on assets under management and insurance items. And here, the inflows in 2026, consistent with 2025, which was already very good, is ensuring a strong revenues from recurring fees, net of performance fees. And we expect it to grow double digit, of course, subject to how markets will perform. That does not include performance fees.

In the first half, we've already accounted for a big contribution of this performance increase, which was not discounted because of the geopolitical backdrop. And they gave a strong contribution to the increase in NIM in the first half. We'll see what the market will be like for the second half of this year. But it's clear that if we were to have a similar situation in the market, results will be even more positive than the ones of the first half.

And as far as our sensitivity to rates, maybe then I'll give the floor to our CFO, I would like to wrap up answering your questions about the consolidation scope of our holding. Well, there are no major updates there.

And the CRD IV directive was recently adopted within Law 285. So we'll soon start -- be able to start a dialogue with regulators. And of course, we will ask for -- to be excluded from the regulatory or supervisory scope for CRD IV. That will not come automatically because every decision has to come from ECB and the ECB will give its saying on the matter. And as far as dividends are concerned, as you all know, dividend is something the Board of Directors will decide upon.

And last year, we confirmed dividend despite the level of profit in recurring items was lower than what we had in the previous year. That was a major signal we sent out then and that really proved that we really focus on the market, and we want to provide a stable remuneration for our shareholders. And therefore, a steady growth of our dividend payout. Even at moment or hard times, we've always paid out a dividend with the exception of 2020 because of ECB's recommendation. But let me reiterate that this is something the Board of Directors will have to decide upon. And what you said will be looked into towards year-end when we will be able to rely on more details about the results we will have achieved throughout 2026. Daniele, I give you the floor for sensitivity to interest rate.

Elena, as far as sensitivity to interest rates is concerned, currently, we have a sensitivity over the 12 -- over 12 months. EUR 97 million positive 100 bps curve, and minus EUR 62 million in case of parallel reduction decline in the range of 100 bps here. The average beta in the first 6 months of the year on deposit was about 30%.

The next question comes from the line of Luigi Tramontana with Kepler Cheuvreux.

Congratulations on the excellent results you achieved. I have 3 questions, and 1 is on commissions. I'd like to better understand how the placements you made were just placements of retail BTPs or if you also place other types of products such as certificates? And what your take is on those products, ensure entry fees -- major entry fees?

And then another question about capital but you've already answered that question. And then also, I'd like you to elaborate a bit more on capital, meaning having excess capital, such as sizable excess capital as you generate capital, again, in a sizable way and in a very efficient way. But it's capital that's not really "working." What's your strategy? Could you elaborate for instance, for M&As type of assets that you are looking at with somehow more attention? And if you have any specific assessment or valuation metrics that you are applying, for instance, return on investments, value creation, et cetera?

As far as commissions are concerned, EUR 10.8 million in 2026, EUR 11.5 million in the second quarter of 2026. If you want us to give you more details out of the EUR 22.3 million, EUR 6.1 million is BTPs and AUC practically. The vast majority, more than EUR 16 million worth of commissions, fees and commissions are from OCRs, in-house OCRs. I think that should answer your question. As to the -- as to capital, I can stress the fact that as we've disclosed to the market more than once. We want to have a capital position, enabling us to have a balance between rewarding our shareholders and at the same time and have a capital endowment that is quite sound and robust because even through uncertain economic cycles, we want to be able to still grow organically.

And as you could see, these are very sizable and meaningful, and they have been, especially on the loan side, but also on the funding side. And this is still our strategic priority in the long term, but also, they give us the necessary flexibility to be able to look in to -- to carefully look into potential opportunities of growth through M&A. And this is something we are doing.

I think I gave you a way to understand why we want to have such a strong capital level. For greater technicalities, I hand it over to our CFO, Daniele.

From a target perspective, what we are mainly focusing on is entering areas where our network is not yet so developed as we have done with CR100 -- sorry, CR Cento. We want to create value, meaning we want to unfold synergies, but also we want to rely on the leverage on the full ecosystem around us. That's why we look into opportunities for maybe individual product factories that could be accretive or could serve the group's growth strategy. The models, whether you do -- you analyze it from a dividend or from a DCF model -- or if we were to have a transaction in cash, and we look at our ROI, it's one thing. And if we were to right to have a transaction paid with shares, it would be the dividend area to be impacted. But the main thing for us is that these transactions have to be accretive EPS-wise earnings per share wise. And then as far as the ROE is concerned, it very much depends on the opportunities for alternative investments we may have.

I have just a small follow-up on the one-off item of EUR 9 million that you accounted for in the first quarter. Could you elaborate on what it is connected with it?

It's simply return -- massive returns on some litigations we had and when we closed the litigations, we had money released or freed up.

Mr. Andrea Lisi with Equita next.

The first one is you are deconsolidating your results, but also -- well, the consolidation in the market, could it provide growth opportunities for you? And are you already looking at some initiatives of that kind as far as the NII growth, indeed, it's a matter of rates and volumes, but could you elaborate on what you expect as far as loans and deposits and funding are concerned from now to year-end?

And also, going back to growth in commissions that you mentioned before, the commission levels that you currently have in the asset management sector segment, do you think they are sustainable for the coming quarters?

Let me answer the first question. Yes. Our growth strategy with well, internal organic growth also leverages consolidation. As you could see from the results achieved in the first half, we increased our customer base of about 5 -- by about 5% net. And we are also -- over these last few weeks and months before the -- sorry, the summer holidays, we went through these opportunities. Consolidation enabled us to, for instance, go to the provinces in the Montalegre area, where we didn't have a franchise in the past, but now we do. We opened 2 or 3 branches there in the -- so that's an extra opportunity for growth.

And as far as the questions you asked about loans and funding loans and deposits and/or funding. As far as our guidance is concerned, loan growth, we would like to retain a sustainable growth base. We already provided or proven in 2025 around 3%. And the target, the goal as you saw in the first half is to focus more on the profitability of such assets. And as far as deposits and funding are concerned, the target is EUR 4.5 billion worth of total direct and indirect funding at the end of December 2026 and EUR 2.8 billion should be assets under management and insurance, AUM and insurance, and we are confident, and I've already said it above and beyond how markets will perform and how performance fees will fare. This will support us in the second half of the year as well. And it's one of the reasons why, as I said before, we expect a double-digit increase year-on-year.

Mr. Morellini, for the time being, there are no more questions in the queue.

I'd like to thank you very much for logging in. Thanks for patiently following us and have -- we wish you the best summer holidays.

This is the Chorus Call operator. The conference call has come to an end. You may disconnect your phones. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning. This is the Chorus Call operator. Welcome to the Credem Preliminary Results 2025 Conference. [Operator Instructions]

Stefano Morellini is the General Director. I'm going to give the floor to him.

Thank you. Good morning, ladies and gentlemen, and thank you so much for connecting. Here close to me, we have the Co-General Director, Giuliano Cassinadri; and my colleagues managing the Valores or Value Add and investor related areas. I am so proud to walk you through very important numbers concerning excellent results, which is what we managed to have, thanks to our strategy, also thanks to the way we do banking and especially thanks to our people, their professionalism and their determination.

So also for 2025, we reconfirm our strengths. So this is much more the numbers or figures of data, we can say that we have turned those numbers into a real actual impact on the local communities, on the territory.

We've also strengthened and improved the trust of our economic partners and of our customers. As a matter of fact, you can see that the financial support to families and companies is growing. This is a commitment for us, and it translates into extraordinary results and into our concrete encouragement in order to grow the economic fabric of the country.

Now we've been doing this since 2013. Let me highlight this. So after 12 years, this is the 12th consecutive year where we can see an increase to loans to customers. We will strengthen our driving role into managing savings. So we are working together with our customers hand-in-hand with our customers with strategic advisory services and custom-made solutions for every single financial need.

Last but not least at all, we keep investing in technologies because we want to turn all of our internal processes, and we also want to change our services. So there's an unstoppable integration of digital systems, our multichannel proposal.

We are now able to offer easier, personalized, safe banking experience ready to take up the challenges of the future. So before sharing with you results, I would like to reiterate the following. Reaching those targets was made possible, thanks to the work and the commitment of an extraordinary team that every single day put our own mission right at the center of our effort.

We want to create value and well-being. They both have to be sustainable over the years. Once again, I would like to wholeheartedly thank our professionals and our staff. Thank you so much for what we have done.

Can I please have Slide #2. And let me start with the results of 2025. I will also be adding some comments on the growth performances we have enjoyed together with our positioning. Slide #3, please. Now you can see here the main results that we were able to get.

So the year closes with EUR 621.5 million benefit. That's a positive value generated by the merchant acquiring. So net of this, our profit would be EUR 522.8 million. This means that it is a normalized profitability that stays at a very high level, double digit. ROE, ROTE are 14.1% and 12.4%, respectively, once again.

As for AQ, asset quality, this is right at the top of the Italian and European banking system. NPL ratio is 1.6%. The net value of the indicator is 0.7%. So there's a very high level of capital generation. And this means that we can maintain a very solid capital position.

The CET1 ratio is 15.82%, and this is much higher than the regulatory minimum level for 2026. Now this asset ratio already includes the proposal of a dividend that will be EUR 0.75 per share.

Let me now walk you through the dimension growth values in Table #4. The growth strategy keeps generating better results versus the average of the system, thus confirming the effectiveness of our business model in different economic cycles.

Now in particular, I have to say that loans show a yearly growth by 3.6% versus the 1.1% of the general system. As for direct collection in this case, we have an increase by 3.8%. This is 2% points higher than the average number of the Italian banking industry.

We will wrap up 2025 with a significant reduction of net collection. This is our best number ever, and it reaches EUR 6.4 billion, of which 3 managed loans and insurance. Now this performance shows a very important message concerning the trust and confidence of our customers in terms of managing their savings.

All of this translates into a crucial element for the development of the commission components into the next phase, which will be the stabilization of the rates. So that is not just volumes because we keep developing our customer base. In the past 12 months, customer base is now 1.7 million customers with a yearly growth of 5.8%.

Let me now share with you the details on the sources of profits, which is Slide #5. So we keep rebalancing our inflows. What is more important is the incidence of recurrent services margin, which is now 45%, while what we can see is a reduction of the financial margin because it follows naturally the dynamics of the rates.

I would like to highlight that throughout 2025, the dynamic of the core revenues. Now even if the makeup or composition was different was on a quarterly basis, constantly growing up. Now this is an excellent message in terms of looking at the future. Well, especially because this is confirming that Credem Group can really leverage the diversification of its own business in order to support the revenue components, thus readappting, readjusting the various current scenarios, thus aiming at sustainable growth in the medium, long term.

In the next slide, #6, you will see the following. The commercial bankers together with the para banking companies plus CC or consumer credit. Even if the rates went down in the past 12 months, they have been able to close the year on excellent levels.

This is what happened, thanks to the excellent quality of the assets, Credem Banca not considering the capital gain, which is the session of the merchant acquiring, we have net profits of EUR 275.1 million.

Now the contribution is for more than 44% to the consolidated balance sheet, while the power banking sector, consumer credit and technology wraps up the year with EUR 86.1 million. In this case, the incidence of the consolidated result is around 14.4%, once again growing versus last year.

So thanks to the excellent development of the loans managed and the unstoppable work of our networks the aggregate world plus private closes 2025 with a comprehensive net result of EUR 175.1 million. Once again, this accounts for 28% of the total consolidated balance sheet.

Now these results confirm the importance of having a diversified business model. This means we can exploit to leverage at best all of the internal [ solutions ] in order to extract value plus profitability in a different market context. And I am pretty sure that for us, this will be a distinctive factor as well as a competitive advantage also in the near future.

Anyway, we'll be back on this topic in a few minutes. Next slide, #7, please. As for the financial margin, this is going up versus the previous quarter. And once again, this confirms the dynamic of the behavior that we saw throughout 2025. On a yearly basis, the impact has to do with the movement or evolution of rates, but we've been able to wrap up 2025 slightly better than our forecast.

What is very positive is the result of core services margin level. So net of the nonrecurring components, for example, the trading and the performance fees. Now this progression allows the total revenues to have a growth of more than 3% versus the previous quarter.

While on a yearly level, we have to consider the smaller financial margin. We also have to consider the smaller level of performance fees that have been significant in 2024. So despite the commitment, a strong commitment of the group in order to keep growing in terms of new hires, but also in terms of very intense activities made of projects and IT developments.

Again, I'll be back on IT in a few minutes. The growth of operating growth is limited. It is only 3.4%. Now this means that we have an excellent operating result, which is EUR 838.1 million. The cost of risk, as you can see here, is extremely small.

On a yearly basis, it reaches [ 13 ] basis points. So we wrap up 2025 with net profits at EUR 621.5 million or EUR 522.8 million net of the capital gain that I have mentioned before, having to do with the transfer of merchant acquiring MA. Next slide, please, #8.

Now as I said before, the financial margin or net interest income has registered throughout 2025 an excellent quarterly progression after the most significant effect having to do with the reduction of the first quarter and despite the continuous reduction of interest rates.

We are sure that for 2026, the biggest challenge will be to further reduce the volatility level of the interest income or financial margin, thanks to the expansion of volumes and the protection of the commercial bifurcation. In Slide #9, you can see that we confirm an excellent protection of our commercial profitability, especially when compared to the system level.

As compared to the Q4 2024, the average drop of our commercial bifurcation seems to be 31 basis points versus 57 bps or basis points on average for the system. This is due to the excellent capacity of the group in maintaining quite a good profitability on loans and especially in terms of reducing as quickly as possible the cost of direct collection.

That cost had been impacted throughout 2023 and 2024 by the strong request of deadline products. In Slide #10, you can see the securities portfolio. Well, in that case, we carried out purchases basically on Italian govies around EUR 900 million in Q4.

This means that the portfolio is now worth around EUR 12 billion. As for the duration of the Italian govies is reduced. So this means that we've been able to maintain our general portfolio duration at around 3.6 years. The incidence of Italian govies reaches 42% with HPC component, which is up to 82%.

We maintain an important focus on the market, and we do this because we would like to take advantage of possible benefits, but we also would like to take advantage of opportunities to increase volumes.

In Slide #11, you can see that we are absolutely satisfied, thanks to the expansion of commission levels. I would like to highlight that this aggregate number in terms of recurring components. So we have to exclude from the total the financial activity and the performance fees -- so as for Q4, we have seen an increase by around 4% versus the same quarter 2023.

Out of the total, you can see the incidence of smaller performance commissions versus Q4 2024 again. So it is with trust and confidence that I reiterate that this aggregate will be the main driver of the revenues components in the next quarters, thanks especially to the very strong synergies between the networks and the product firms that our business model is offering.

Let me give you some details. I mean, there's been a strong production of net collection this year. So this translates into an excellent evolution of management commission net of performances, which are able to reach EUR 135.1 million. Now this aggregate number this quarter also includes quite a good contribution, thanks to the placement effort. So a remarkable growth by around 9% versus the same time window of 2024.

So as for wealth management, we also have an increase of the insurance business, which reaches EUR 27.1 million that accounts for -- I mean, what accounts for the contribution of Banc commission is EUR 50 million. If you make a comparison with the rest of the year, of course, there's an impact due to the lesser contribution from merchant acquiring, which is what we have transferred at the beginning of 2025.

It is equal to 4. 4 is the contribution of the financial activity, and this is due to the fact that there haven't been significant benefits we got in the quarter. Slide #12. -- shows you that we can keep a sustainable cost level on a medium-term basis, and this is consistent with the growth of the size of the group.

You can see the number of hires going up in the last 12 months. This has driven the dynamics of staff cost. We have a low turnover level in terms of employees. We are focusing so much on further strengthening of the network together with young talents having specific external competencies and skills.

This is fundamental to drive the evolution of the group and the digital and technological profiles. Now the number of the last quarter is even better than the number we had in Q4 '24. And this is also due to the lesser impact of those components having to do with the evolution of operating income.

So as we already told you in the previous conference calls, the administrative fees are directly correlated to the IT developments plus the intense project activities in order to further improve the internal processes of our bank, the service model we implement as well as the IT architecture of the group with following consequent benefits in terms of the strategic positioning, considering the business we have in the future. In Slide #13, as I said before, you can see that this is the 12th year in a row where we see a growth of loans to customers.

This is what we have done going through different economic and financial scenarios. Now this confirms the extraordinary work done by our group, central offices, commercial or sales network. This is also due to the effectiveness of our business model.

So plus 3.6%. Once again, this is so significant, especially when compared to the growth of the system that only does plus 1.1%. Let me give you some details. I mean you can see a growth of 5.7% short-term loans, residential mortgage and leasing, respectively, 3.2% and 3.8%, while consumer credit CC is driven by Avvera shows an increase by 11.1% year-on-year and reaches EUR 4.1 billion. So as I previously told you when commenting the results of the first half of the year, we did an excellent job with our networks in terms of consulting and advisory services to companies. This translated into an increase of gross loans to companies in 2025 by plus 15.6% versus the number we had in 2024.

Well, we do know that we will have to consider a market scenario that will be very challenging, and we will also see an increase of competitiveness. Now we are absolutely sure that we will be able to keep having overperformances versus the industry, and we will keep increasing our market share also for 2026.

This is consistent with our organic growth project. Next slide will be #14. I'm so proud to tell you that we will be closing 2025 with the net production level, which is the highest ever. Net collection increases and reaches EUR 6.4 billion. If we exclude the corporate, we would be having EUR 6.7 billion.

What is significant is the net flows managed collection, EUR 3 billion. This goes well beyond the expectations we had at the very beginning of the year. So these levels are contributing and they will be contributing to our business in the next quarters.

So once again, they will increase the commission level. This means that they will increase the revenues in the current context of stabilization of interest rates. So we have an excellent result in terms of administered or managed the collection and the rent collection, both with a net production, which is around EUR 1.7 billion each. Let me highlight once again that the growth strategy, so the organic growth strategy also depends on the expansion of collection.

So it also depends on the fact of getting new customers. And at the same time, we want to keep being the real benchmark or reference point in terms of managing their savings. Now these numbers are showing you that we are doing all of this in the right way.

And yes, I can confirm you that we have challenging targets and objectives of this kind also for the years to come. Slide #15. Now the excellent dynamic of net production has given a contribution to the growth of collection from customers, reaching EUR 114 billion.

The direct collection growth by 3.8% versus the end of '24. What is significant is the expansion of the managed collection plus insurance business, reaching EUR 48.2 billion. The growth in that case is around 10% versus 2024.

Now this happened, thanks to the excellent net reduction that I have commented a couple of minutes ago. In Table 16, -- as I said before, we will close the year with a cost of risk, which is 13, 13 basis points. This is an excellent number in Italy, but also in the rest of Europe. Now this happens thanks to a very low level of deteriorated credit, and they are going down.

So now we have EUR 615 million. NPL ratio is 1.6%. Now we are not seeing a significant signs of deterioration and our default level is one of the lowest levels of the industry, which is only 0.43% for us.

Let me now talk about 2026. We will be focusing on the current economic scenario. But at the same time, I can confirm you that one of our targets is to be well below 20 bps in terms of cost of risk also for the next 12 months. This is Slide #17.

Now if you also analyze the hedging, so the coverage that we have in our group, well, AA Group itself is right at the top of the sector in Italy, but also in Europe. The coverage ratio is now 59.2%.

Now this number, if you consider also the additional coverage generated by coverage pillar 1 together with the addendum reaches in general 60.5%. Now those levels will guarantee the fact of having a competitive advantage position in case the scenario changes, which is what happened in the recent past.

This also gives us the opportunity to keep working with determination in our growth strategy. Next slide would be #18. So it is with so much satisfaction that I can tell you that our MREL requirement, so it has improved. MREL was reduced by more than 3% points versus the MREL required for 2025. Now MREL is going very well.

So once again, the authority told us that we did an excellent job. So the buffer improves. In terms of bonds, the only change versus the previous quarter is the use of the recall option on EUR 107.5 million of T2. In the next table, #19, you can see that also during the closing of 2025, we keep a very high level of NSFRNL.

Now basically, the first one is 141% LCR is 177%. In Slide #20, I would like to wrap up the first section of my presentation by showing you our asset position. As for CET1 ratio in terms of banking growth, but also in terms of credentials, so on Credemholding reached respectively, 16.99% and 15.82%, thus confirming the very strong capacity of the group to be able to generate capital in an organic way even if we grow at a high pace, much bigger, higher than the average of the system.

So the expansion of our risk-weighted assets, RWA, this is due to Basel IV, but this is also due to the expansion of the volumes. Now this is more than offset by benefits generated by also considering that there's a dividend proposal, which is EUR 0.75 per share already included into these numbers.

Furthermore, as for the ratio, we also have to consider the impact by 11 bps due to the sell-off, if you will, of the provisions due to the latest Italian financial law. Now the total requirement for 2026 is 8.55%. Now this requirement already includes the new P2R, which is 1.25%. This is the lowest in the Italian banks directly controlled by the European Central Bank. So our buffer stays very high, very reassuring -- which is 727 bps. Next slide will be #21.

Now just a couple of minutes for -- I mean, considering the growth and our future positioning. This is now Slide 22. Here we go. So in the last 4 years, we've been able to increase by more than 13%, the level of our loans to customers. In terms of absolute value, we have EUR 4.5 billion.

We have acquired a new direct collection money, EUR 6 billion. And first and foremost, we've been able to increase indirect collection in a very, very significant way. So from EUR 55.8 billion in '21, we now have EUR 73.4 billion in 2025.

Now the increase was around 31% and in absolute values, this turns into more than EUR 18 billion growth. Now this progression brought us to have a comprehensive growth of our TB total business by EUR 28.2 billion over the last 4 years, which means plus 23%.

Now this is confirming once again the execution capacity we have. So we can grow organically and sustainably. In Slide 23, you can see that after 2024, that was really excellent, well, 2025 is anyway on revenues levels versus 2021, which is still very significant.

This means we have increased our revenues components in a structural way by more than 40% Furthermore, our current size and the growth objectives we keep having will allow us to have continuous expansion of revenue flows. I can also tell you that we look at the next 24 months.

So thanks to the synergies with our networks and firms, in 2027, we think we will go back to the total revenues level we had in 2024 with a different balance, so much more balanced between commissions on the one side and financial interest on the other.

In Slide #24, you can see that in the recent years, in the past years, which is what we also told you in the previous conference calls, have been characterized by a strong commitment of our group in terms of technology and digital developments.

There's been an intense activity in terms of projects and it was aimed to generally refreshing the facility management backbones. Now this result is changing, and it will be improved in the future significantly.

It will change our IT backbone together with our positioning so that we can better seize the opportunities of the next technological evolutions, thus translating them into performance increases resiliency and once again, cybersecurity.

We will then be able to focus our future investments in 5 main strategic drivers, the growth and the range of products because, of course, we want to respond to the needs of our customers. We will support our supply chains to maximize synergies, thus improving efficiency and effectiveness of our business model.

The reduction of the expenditures and costs, thanks to the continuous optimization of processes plus adoption of an operating model, which will be more and more digital and effective.

We will have TI technological innovation so as to speed up the commitment of the group in the adoption and the use of new technologies. For example, the data intelligence at the service of the business together with the improvement of customer experience.

Last but not least, we will have a continuous improvement of IT safety and security systems improvement, thanks to the new IT backbone as well as the investments that we will take into account for new technologies. Slide #25, this is to draw the conclusions of this call.

Now I wish to highlight our competitive positioning today. Also in terms of the next challenges that we will be taking up. Now we will have a very high level of, let's say, challenge data. Our business model is diversified and comprehensive. We can generate value in many different economic cycles. The creation of synergies within the business model that we have will also go through our excellent capacity of execution.

And as we've been showing also in the past, this will be crucial in order to have the expansion of the size of our group. Furthermore, as I said a couple of minutes ago, the seamless internal innovation plus the digital evolution that we are performing will turn into a strong support to the management of human relations.

We would like to increase the value of our human digital model, which is absolutely essential in order to develop revenues, especially in terms of commission flows. Last but not least at all, in a scenario which is still characterized by strong uncertainties, our Credem Group is one of the soundest groups in Europe. So we have plenty of attractiveness in terms of new customers, but also in terms of sustainability because we believe in our growth strategy. We also would like to keep developing all of our business lines. Now this is it with my presentation. So don't hesitate if you have questions.

[Operator Instructions]

Question number one comes from Luigi De Bellis.

Luigi De Bellis fronm Equita SIM. I have 3 questions. The first one is on the interest margin. So considering [indiscernible] you give us some color on your expectations for 2026 and if it were possible to [indiscernible] because you talked about wanting to go back to the same levels you had in 2024, plus the main drivers on the [indiscernible] could you give us some color on the possibility on the interest margin considering rates increase, for example, with [indiscernible] to 100 basis points?

The last question is on the competitive scenario on the private banking wealth management measure project from Intesa Sao Paulo in order to increase the number of consults. Can this have an impact on the competition of the market at least from other networks? What is the competitive scenario you see in terms of recruiting and retention of consultants and also in terms of the collection for the managed savings in 2026?

Thank you. The first question on sensitivity would go to Mr. [indiscernible] from the Valores department. I will answer the second and the third question on the financial margin, 2026 expectations, together with the project concerning PB Private Banking.

Now as for the sensitivity, we have a parallel increase of 100 basis points. In that case, we have EUR 98 million in case of same time or parallel production, 100 basis points at minus EUR 54 million.

Now as for the other questions on the financial margin or interest margin, well, what we foresee for 2026 is an interest margin, which will be flat. Now if you consider the results we managed to reach in 2025, thanks to the volumes generated in 2025, but also due to the rate coverage strategy as well, they will be able to offset the impact of average rates that will be lower than the average of the recent months.

Now as for the -- well, attention, if you will, to volumes, well, our target was the following: we would like to reach at the end of 2026 with an increase, which will be slightly higher and growing. So the target is 3%, thus contributing with a significant dynamic also for the next year.

Now as for the topic having to do with, if you will, wealth management and private banking. Now first and foremost, I may tell you that for this year, 2026, the simple objective is EUR 4.5 billion of direct and indirect collection of which almost EUR 3 billion of managed collection and insurance business.

So under this profile, a very important role will be played by Credem [indiscernible] Private Banking. Now in the recent years, but also at the very beginning of this year, 2026, I have to say that we haven't had any difficulty in continuing our recruiting activity and development in terms of internal lines, but also thanks to, let's say, external recruitment, so private consultants and financial consultants as well. And among other things, in Credem [indiscernible] Private Banking, we will keep having them together with Credem Bance, where, as you know, we have another channel dedicated to financial consulting services.

So I have to say that competition will increase, as said well, but well, for the time being, no, we don't see any difficulty under this point of view. Well, rather the opposite. I mean, we are really seizing opportunities that are coming as a consequence of our transactions and operations on the market.

The next question is from Giovanni Razzoli, Deutsche Bank.

I just have one question. Will you ask European Central Bank, if all possible, to apply the calculation on assets on banking group level instead of holding level? And if so, how long would it take?

Giovanni, now as you now, at the end of 2025, so last year, the directive has been harmonized into Italian regulations. It was published in the official journal. Apart from those 2 steps, it may be necessary to wait for the harmonization of those instructions into the surveillance instructions of the so-called [ 285. ] So these are the steps required to define the right legal framework so that we can really work with the European [ surveillance ] systems so as to shift the scope.

But this is not automatic. So don't forget about this. So today, we have significant [indiscernible]. But in terms of timing, as I said before, well, it depends on when we are able to start the dialogue, I would say, reasonably within 2026, and we will be able to get some indications about this, but this is not sure.

Next question is from Matteo Panchetti, Mediobanca.

I have a couple of questions. The first one concerns your commissions. So what are the expectations for 2026? Can you give us some color on the key drivers? And my second question is on the distribution of capital because we saw that over the years, CET1 growth. And have you considered a possible increase of the -- well, dividend payment? Third question, as for P&L, where do you see possible upside in 2027, I mean, the highest level?

Question number one. It concerns the commission levels. As for the 2026 guidance of banking fees, what we expect is slightly better result versus the one we got in 2025. Let me talk about the management and intermediation or brokerage commission because the dynamic of the 2025 production will guarantee a high level of returns on management recurring commissions, so net of the performance fees. In '25, but also in 2026, this line will be the main driver for the growth of income. This is what I've highlighted previously. We're very happy of the attractiveness dynamic, I mean, new flows of money that happened in 2025. This will lead to an increase of this revenue line.

Once again, we won't consider performance fees, and it will be well above 5%. Of course, it depends on the evolution and development of the market because, as you know very well, they may have an impact on the value of the masses. So as for this question, I think this is it. I mean, I've given you the main drivers that will guide us also this year.

Now as for the other question concerning the payment of dividend, as you must have seen, the Board of Directors decided to propose the confirmation of the dividend we already had last year. But I need to highlight this. I mean, our profit level in terms of recurrent levels, well, this level is lower than the one we had last year.

And I think this is an important positive message because it shows a very special focus on the market. And again, it confirms a very stable remuneration for our solid shareholders' base. This means that there will be a growth of [ DPS ] over the years. We've always shown as a group to be able also in difficult economic cycle,to distribute, I mean, to pay always and consistently dividends. This is what we've been doing for almost 20 years. The exception was 2020 because of the ECB recommendations anyway. Well, the future, if you will, strategy of the dividend will be decided once again by the Board of Directors.

As for your last question, if I'm not mistaken the question was on our work position on income, I mean, for 2026, right? So well, we do have a target. We would like to get close, as I said before, to what we got in 2025. So this means we want to guarantee stability and growth, especially on some components.

[Operator Instructions]

For the time being. We don't have other questions prebooked.

Thank you very much. I would like to thank you for listening, to your patience. And I wish you a nice continuation of the day. Thank you very much for attending.

This is the Chorus call operator. The conference call is over, and you can disconnect your devices.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]