Alberto Nagel: Good morning to everybody, and thanks for joining the call. We are halfway of our plan, so ONE BRAND - ONE CULTURE. And the first half of the second year has delivered €660 million of net profit with a return on tangible equity of 14%. We have had a strong commercial activity across the different business, and we have improved all our business position. In Wealth Management, we have had roughly €5 billion of net new money.

In CIB, we have not only confirmed our strong positioning in Southern Europe, but also thanks to Arma, we have had an important leg in the fee-generating business. In Consumer Finance, we have printed more than €4 billion of new loans, and this is clearly above sector growth. So for this reason, revenue were up high single digit. So 6 months on 6 months, they were up 7%. Cost/income ratio stood at 42%.

And the main driver has been in the last 6 months, the important growth in fees, which is one of the theme of our plan, so producing more fees and using less capital. So fees were up 30%, driven by CIB and Wealth Management. The CoR was stable with some encouraging sign of a slight decrease in the quarter. This led to, as I said, an important jump in profit and also in EPS, which went up 10% to €0.79 per share. High capital generation confirmed, this is another important feature of our plan.

So grow revenue without using too much capital and producing a lot of capital available for distribution. So our CET1 stood at 15.2%, if we include 10% of payout, also taking into consideration the possible next buyback, we're going to end up at 14.8%. So interim dividend, the amount will be fixed in the next Board meeting and will be paid on May 15, but clearly reflects the increase of earnings. Now looking at the second quarter, we have seen a clear acceleration of the business development across the different business sectors. So Wealth Management revenue up 10%; CIB 46%; Consumer Finance, 3% and insurance 11%.

So all 4 business contributed positively to the dynamic of revenue, and we have reached nearly €1 billion of revenue, which is all-time high in terms of revenue in this second quarter. So 14% increase Q-on-Q. Here, what we want to underline is the NII trend. NII, you remember in the last call, NII was a bit disappointing because it was a bit lower compared to our expectation. We have been working hard to basically fend off this trend.

And now we are in a position to see that NII is going up Q-on-Q, 2% and the main driver are consumer finance and CIB growth of loan book. On this, of course, we will elaborate further in the conference. The second important element, as I said, was the number we printed in fees. We have had the highest ever quarterly results in fees with €316 million. This is up 36% Q-on-Q.

And again, here is CIB and Wealth Management, the main driver. CoR, the stated CoR 175 in Consumer Finance is 3 bps lower than the first Q and underlying CoR is down 10 bps in the second quarter. GOP and net profit were at record levels. So GOP was €500 million and EPS of the quarter was €0.40 per share. Going through the different business, our priority, as we said many times, is to develop a massive wealth management operation.

This is happening, and this is happening faster than expected because if you see the increase in net new money, it's 30% year-on-year, not only in terms of amount of size, but also in terms of quality. So 2/3 AUM, just 1/3 is AUA and deposits. This is one of the best-in-class growth capability because if we compare the growth rates on TFA, we are nearly at 10%. And if you see the comparison with other more affirm player, we are showing the fastest growth. This is also driven by our model.

Our model of PIB is clearly supportive of NII and -- net new money, sorry, because of liquidity events. Here, we have had roughly €1 billion of liquidity events and mainly generated by our network. So TFA reached €107 billion. So this is clearly €13 billion up year-on-year, and it's making our target of €115 billion in a year's time more achievable. What is important to note is that after 1 year, Mediobanca Premier is clearly becoming a big driver of growth.

Recruitment plus 22%, average portfolio is plus 80% and new private clients is 2x compared to the pre-repositioning of Mediobanca Premier. But on this, we will elaborate further. So this reverted into important increase in revenue, €252 million as opposed to €228 million and also a net profit also taking into consideration that we are investing a lot. And so we have naturally a dynamic of cost, which is linked to the growth of our network. CIB was a very, very positive trend and a very positive trend in the second Q.

This is on the back of rebound in activity, rebound in M&A, but I have to say more driven by our strategic initiative, which are the initiative that we have announced a year ago when we have outlined the plan. These are a mix of M&A and new initiatives. So basically, we have seen an important increase in fees, and this is driven by advisory. Advisory was pretty robust in Italy, large and mid, but also in non-Italian advisory. So basically Spain, France and notably, if we want to say U.K., the Arma, but Arma is not a U.K.

player, is a player -- a European player. So you see how we are reshaping this business. From being a purely Italian player some years ago, mainly using capital to generate revenues, now we are having 60% of revenue, which are not domestic, and we are more differentiated between large cap and mid-cap. And as I said, this is coming without massive use of balance sheet. On the other hand, we have had a recovery in corporate lending, already noticeable recovery, which will continue in the next few quarters.

It's not a big jump, but it is important to support the NII. So profit were high -- close to the highest level. Consumer Finance, another very, very positive and strong quarter. Based on the strength of Compass in generating new loans. So we are up 6% Q-on-Q, €2.2 billion.

Above sector average, you see that we are growing at 8%, while the market is growing at 7.5%. This is revered in a solid loan book growth. So we have had €300 million of loan to the loan book. And we have had also a slight decrease in CoR. So you see that growing -- we are seeing a growing risk-adjusted profitability.

So NII on average loan was up 10 basis points, and it's staying at a very high level, 7.3%, but also the NII minus CoR on loans is going up to €555 million. So we are having really a very good trend in terms of both growth and profitability so -- which were the goals that we had when we have published our latest plan is to work at the bank which should have high and sustainable growth through a stronger industrial footprint. So our play was and is mainly industrial, so becoming stronger, deeper in each of our verticals. This growth, as I said, is not linked to massive use of balance sheet and RWA inflation. On the contrary, our plan said, and we confirmed RWA neutral from year 1 to year 3.

This is leading to high distribution with a low execution risk. So after this second quarter, we are able to, on one hand, confirm the guidance of '25. So NII resilient fee, low double-digit growth, net new money between €9 billion and €10 billion and EPS between 6% and 8%. And the distribution is 70% cash out -- cash payout plus buyback. On the contrary, given the trend in revenue and the outlook for NII and fees, we have revised slightly up the revenues from €3.8 billion to €4 billion.

We have revised slightly up also net profit to €1.4 billion. And we think that we're going to stick to this 10% payout with an element of, I would say, additional distribution on 2026, which will trigger our distribution -- will bring our distribution from €3.7 billion to €4 billion. This is going to be mainly a cash component, and it will be in the region between €300 million and €400 million, more €400 million and €300 million, and it will be according to actual plan split into, I would say, interim dividend in 2026. So as I said -- going on Page 11, you see that our revenue trajectory was pretty interesting. 7% increase in revenue is, I think, an important sign of the development of the bank in a moment where normally banks, in particularly, if they rely on NII, they have a declining revenue rather -- or stalling revenue rather than increasing revenue.

So 7%, it's important, but it's more important to see that the so-called capital-light were up more than double, so 18% year-on-year. They roughly are now half of the total revenue of our group. We said that this is the highest quarter in terms of fee. You see on Page 12 that this is driven by an important increase in 2 business, CIB, thanks to Arma and to advisory in Italy. And also, there has been also a pickup in lending fees, but also in Wealth Management, where we had roughly reached €150 million of net fees in a single quarter.

NII back to growth in Q2. This is basically effect of 2 trends. The first is -- and more important is consumer finance. The loan book and the marginality of Compass and the fact that Compass is starting to harvest the lower cost of funding, which will, I think, play more effect in the quarters to come is a great supporting factor. The second one is CIB loans, were up 8% Q-on-Q, reflecting a gradual recovery in corporate.

We still have a subdued activity in mortgage, which we think will still last for some quarters. So the 2 positive are mainly Compass, Consumer and CIB. We have had a positive spread effect in consumer finance and in banking book. And we are starting to see a lower cost of funding. You see this on Page 14.

So funding stock was stable or slightly up at €64 billion. And we are starting to see Wealth Management deposit costs going down. Here, we have to manage -- we had to manage the growth in terms of net new money and also deposits with the need also to decrease this cost. So it's always an equation that we have to solve every single quarter depending on our priority. The priority has been in the last few quarters to grow our net new money.

So we still have a wealth management cost, which is supposed to go further down in the next few quarters. Bond stock spread is basically flattish or slightly diminishing. And we have still a very small amount of maturity bond expiring to be refinanced this year. Group CoR is at 50 so -- basis points. It's lower than our guidance.

So our guidance was in the region of 55. We have had a positive trend across the different business. And notably, you see here in this Slide 15 in the CoR of consumer, where we have had a decrease both in underlying and stated in Q2. So this led to 50 basis points of CoR for the 6 months. And a very low use of overlay because you see that we have used only €14 million overlays in this 3 months.

So asset quality remains very good, excellent with 2.5% gross NPL ratio, less than 1% net NPLs and especially the coverage, it's pretty good, and we can say something more on Compass asset quality, which has even improved. So one important theme of our plan, as I said before, is growth, growing the business, growing the bottom line, using better the capital. This is a very important topic which we -- to which we stick every single quarters and not only a single quarter, but every day. So how we use the capital to grow. You see that we have been reshaping the allocation of capital in the last 2 years with a 3% decrease in RWA trend.

And this is on the back of managerial effort priorities. And this, of course, associated with higher profitability led to what we were fishing for a strong increase in divisional return on risk-weighted assets. So at group level, we are now at 2.8%, but you see that every single business is going up in terms of profitability. And this is the effect of both better operating performance, but also more careful and follow-up in terms of RWA saving. Capital generation has been, as expected, strong.

So earnings 140 basis points, less the deduction of Generali and the payout. So basically, we are in the region of 15.2%. Then if we take into consideration according also to the latest indication of our supervisor, the fact that we may distribute or we plan to distribute a further part in terms of buyback at the end of the plan. This is going to be 40 basis points lower to 14.8%. I have already said a lot of -- given a lot of details of nuance on the trend of the different business, but let's go and say something more on Wealth Management.

In Wealth Management, it is important to note that the new net new money is mainly on managed assets. And this is coming from Premier primarily, but also from private. And also, we have had quite a good quarters from asset management, thanks to our product factory. We still have ongoing deposit inflow. And we -- as I said before, we are always contemplating and promoting campaign to attract liquidity through events or through interest rates offer.

That after, we are converting to AUM, AUR. This is leading to a very strong franchise performance. On Page 26, you see the management fee trend is going up 14% year-on-year. But you see also that this number in terms of franchise TFA was €28.5 billion a year ago and now is €33.4 billion. So we are growing franchise -- management franchise fee in a steady way, and this is what we like so having a wealth management that is more steady in terms of the growth of its fee and less volatile.

The second element, which is coherent with our plan, is that the franchise net new money is coming or is invested, if you want, more and more in our product. You see on Slide 26 that 60% of the franchise net new money is converted into in-house products. This is something that we wanted to have not only to retain more profitability and to internalize more margin, but because we have developed a very good capability in our in-house product offer. The private banking is going up in terms of net new money and in terms of expansion through liquidity events. This is something that it's growing because we are becoming more and more important in mid-corporate in Italy and not only in Italy.

And the second element is private market initiative, which reached roughly €5 billion of committed capital. You know that this is going to be invested in some quarters, and we will see this in fees, which are normally higher than on the liquid in the coming quarters. To note, Mediobanca Premier, on Page 28, this is really important to see the potential of our group in this sector. So you see that the capability to attract bankers has been steadily up with 132 professionals in 1 year. So we have had a very important bump in this kind of ability to attract and recruit bankers.

The portfolio that we are taking with new bankers is 80% higher than pre-repositioning of Mediobanca Premier and as well as it is going up a lot. The number of clients -- the target client is 2x compared to a year ago. And hence, this is also converting to increased asset gathering capacity. Given a look to CIB, as I said, CIB is going through important reshaping and quite a positive one. So it's enjoying on one hand, the corporate activity, which has improved.

So we have announced 52 deals in the last 6 months. So it's nearly 30% up year-on-year. And this is basically both our international presence and the Italian one. Then we have enjoyed a record year of Arma Partners. Arma Partners has delivered €58 billion of transaction last year, its best year since inception, since the starting -- the start of the company, is having a fantastic trend, and we are very lucky to have done a partnership with them in a moment where digital economy is booming and is supposed to stay like this for the foreseeable future.

Energy transition and private capital are the other 2 drivers as well as very good trend in market activity. Our market activity becoming BTP specialist is more material, is more complete in terms of product, and hence, we do expect more revenue in the future from this kind of activity. So no need to comment further on market position. You see the numbers on Page 35. Here, revenue are going up steadily, but also it's important to see the different composition.

It's mainly advisory and used to be mainly capital-heavy revenue. And this is converting in quite a nice trend in terms of PBT and net profitability. Consumer, we said about the exceptional performance of Compass. Every year, we say exceptional, but then Compass priced us better the year after. And this is driven by the 3 main elements here on Page 37, a very strong distribution network, physical and digital and a very strong capability to price the loan preserving the value.

This is on the back of credit history of a lot of Italian family, 70 years of experience, 70 years of sophistication in our model, which tend to continue to adjust the price on value. And of course, the new tools or the new product, buy now, pay later has become a huge driver in terms of new customer acquisition and hence on repeat business. So you see that the trend on Page 38, it's quite healthy, new loans by product. So plus 6%, it's an important number. So €2.2 billion in Q2, we never had in the past.

So it's clearly led by the stronger franchise, stronger loan origination capability of Compass, and this is driven by a huge investment we have been doing. We are still doing in digital and buy now, pay later and in light physical. The profitability on Page 38, it's as well very important. And what I want to note with you is, on Page 39, the asset quality. So we have said already on CoR, we expect CoR -- we expected CoR to go up this year because it's a function of the different mix.

So more personal loan, more profitability net, but a touch higher in terms of CoR. Well, in the last quarters, and this is something we see even this quarter, we have seen less CoR that we were expecting. We have to always to understand that given the new mix, we're going to have compared to the past, higher CoR, but then the ability of Compass to collect and to price may lead to this quarter where we have a notch down in terms of CoR. If we see the underlying mix of our deteriorated assets, you see the big -- it was already very good, but you see up to June '18, '19, we had a net NPLs composition, which were mainly done by net NPLs with overdue more than 90 days. So 77% were more than 90 and the rest were less than 90.

Now we have the opposite. 77% is net NPLs with overdue less than 90 days and only 23%, it's above this. What does it mean that the strength of Compass is also its balance sheet. So we are having a provision policy, which sets aside immediately well before the 90 days, so protect the future P&L with a big provisioning day 1. So insurance has been quite good as expected.

And here again, is the positive effect of having an exposure to insurance in banks is something that we have maybe discovered ahead of others. And -- but also now we see that, thanks to the Danish compromise, everybody is looking to have an exposure to insurance because it's the correlated and has a great return on assets and on capital. So going to the last part of this presentation, we are on track to deliver our vision of Mediobanca. The vision of Mediobanca is a vision on a bank centered on wealth management. Wealth management is our priority, developing organically.

Mainly organically, the business is our priority. And this is happening because we see already that we have more than 30% of banking revenue coming from wealth management and more than 50% of group fees coming from -- we have a visible net profit contribution, which is going up. So it's not only already material, but in terms of contribution, it's going to go up. And we will be more and more seen, as we are already in part as a diversified financial and not a bank with balance sheet. This is also linked to the fact that, as we said, capital-light CIB is happening through the managerial efforts and M&A we did and the fact that CIB is not working on its own, but is working more and more in a synergic way with wealth management.

And this is generating a stronger net new money inflow. We enjoy 2 business that are decorrelated to this trend, so consumer finance and insurance, and this give us important revenue growth outlook and a big capital generation available to be distributed. So I said about the guidance '25, I said about the guidance '26, we can elaborate further in the Q&A session. We think that Mediobanca is very well positioned in the next couple of years, 5 years, at least the foreseeable future, where basically, we should take much more market share in Wealth Management, in CIB and in Consumer in a moment where NII for the vast majority of banking, as you know, is going to have pressure. We're going to have basically this year, flattish NII.

And next year, we're going to have a positive dynamic, so basically a slight increase. In fees, we are having, as you see on Page 46, this is consensus across European banks. We're going to have 10-plus increase in fees. And this is the reason why we are focused on our plan. And in the meantime, as you know, we have received a proposal from another bank.

And here, we have summarized the reason why we consider this proposal not in the interest of our shareholders. Basically, we don't see value or strategic rationale neither for us nor for the offer. Why? Because we are very different animal, doing a very different activity. So one is, as I said, a specialized bank, another is a commercial bank. If we put together these 2 animals, we don't have neither a big commercial bank nor a specialized entity, which can grow faster, not using capital and a big remuneration.

We are going to have something of a hybrid, which is for -- at least according to our view, not positive neither for us nor for the offer. There are no overlaps in the business. So we don't have -- we have very little room of cost cutting also because we have different business with different systems. So we can't cut and have -- use a unique system -- IT system or a digital platform because we have different business. We think that there are important dis-synergies from -- in revenue.

So we saw that the offer put out a number in terms of important revenue accretion. We see important revenue attrition. So we think that the combined entity will be having less revenue than the 2 banks before any combination. And this is linked to the fact that the new entity will not be a bank of choice for entrepreneur. And hence, we see that there will be attrition of revenue, driven by loss of client and loss of professional.

There is a high execution risk because basically, we think that nobody -- as it is not an agreed deal with due diligence and understanding of each other, our shareholder, given the relative size, are asked to own 60% of the combined entity without Mediobanca having any possibility to do a due diligence on balance sheet and on business combination. So we are going to take contingent liability that are stemming from the offer balance sheet. And we have been doing this for clients, and we have seen a lot of cases in the past. The track record of putting together retail, commercial bank with wealth or investment banking activity is on average, very poor. And to our knowledge, there is no one single case of success when this transaction happened in a style way or non-agreed way.

The poor cultural fit is linked to the -- what I said before, so the fact that we have different story, different business, different target segment. And basically, also, there are some elements that are more on -- if you want, on the financial side rather than on the industrial side. So today, Mediobanca is positive gear on macro. So as we said, enjoy an revenue and earnings trajectory, which is different from commercial bank. We never had a history or problem of asset quality or litigation.

And so we think that our profile will be diluted, should we do a transaction of this kind because of negative projected revenue and earnings growth from commercial bank in general and the offer in particular. We think that there are element of attention given the fact that some important common shareholders that enjoy this position in a different way compared to the other shareholder of Mediobanca and the other shareholder of the offer. And last but not least, because when you discuss about the offer, the financial terms are even more important than the industrial because, of course, you can like or not a transaction. But if you have a very good consideration, and this is cash, you can also think that the industrial profile is less important. But here, the transaction is all in shares and has no market premium compared to a standard offer of this kind.

This is why our Board has issued a preliminary valuation, a preliminary judgment on this offer, which is not positive at all. Thank you very much. I've been a bit longer than usually, and its now time for your Q&A.

Operator: [Operator Instructions] And the first question comes from Azzurra Guelfi from Citi.

Azzurra Guelfi: A couple of questions from me.

One is on your review and upgraded guidance for 2026. You have increased your revenue and now your net profit is also above consensus. Can you give us a little bit of color on what has changed into the -- to drive the revenue increase? And also, in light of the offer as well, how do you see the development of your core business like CIB and Wealth Management, if they have already been impacted. And if you can share a little bit of color on how do you plan to have sustainable revenue growth in this uncertain time for your franchise? The second one is on capital. You historically had a payout of around 70% plus excess visibility buyback.

Now in the slide, you indicated 100% payout. Is this going to be all cash? And would this basically imply a significantly higher dividend per share versus consensus, not just because you increased the amount, but because of the different distribution?

Alberto Nagel: Thank you, Azzurra. Best wishes for you for the future quarters. And apart from this, coming to your revenue, what's behind the guidance upgrade? In terms of revenue, we are seeing a better trend. We are seeing a better trend in NII.

And we think that this trend can be fostered by the 2 main drivers that are consumer, which will continue to print additional loan and hence, increased loan book. And this is coming with a decrease in cost. So of course, there may be some pressure on condition to clients. But normally, when this happens, there is always a time lag. And so Compass will continue to have a very strong NII trend.

In corporate, we don't expect for this 6 months. But after the 6 months, we see more acquisition finance coming. For the time being, we have been doing more, I would say, normally corporate lending, and this is enough to counterbalance the decrease in interest rates. In 2026, we will have Compass plus CIB doing more. So this is for the NII.

For the fees, we are seeing clearly an acceleration of the fee of wealth management in -- provided that markets stay stable in terms of more management fees and less fees coming from other wealth management activity because of NAV trend and also conversion of liquidity events and deposits. So basically, these are the 2 main drivers. So we have seen also the new plan of Generali. So apart from trading, which is very difficult to predict, but the core revenues are supposed to grow a bit more than what we thought, so from €3.8 billion to €4 billion. In terms of impact on our business, today, we have seen a very important response of our people, of our bankers to what happened.

So there is a team spirit, which is very strong. The team spirit is to show at this moment that we stick to our priority. We show to ourselves and to the client that we are "best-in-class" or a very, very strong bank in terms of culture and delivery. Going to distribution. Now let's, I would say, go in some more detail compared to what I said about '25, '26.

So this year, we're going to have 17% cash and roughly €4 billion -- €400 million of share buyback. This is going to -- and the execution -- this is the execution of the buyback we have approved in October '24. So with this, we're going to end up in the region of 14.5% of core Tier 1. Next year, we will have the execution, if we approve it, of the buyback in October '25. Plus, we will have 100% of cash, which is 100% of net profit distributed.

And this will revert into roughly €400 million of additional dividend to be split into installment in interim. And all this will lead our -- core Tier 1 is expected to land above 14%, which is coherent -- exactly coherent Azzurra with what we said 1.5 year ago when we presented the plan. We said the landing point of our core Tier 1 at the end of the plan will be in the region of 14%, 14.5%, leaving also a small buffer in terms of M&A.

Operator: And the next question comes from the line of Pamela Zuluaga from Morgan Stanley.

Pamela Zuluaga: I have 2 questions.

The first one is around net new money flows. If I understood correctly, you said you've been benefiting from growth in your network and the push for hiring financial advisers. Could we see maybe a deceleration in net new money trends that could reflect some normalization in this regard? And then the second question is specifically on margins. You've already flagged that there were more flows into assets under management versus assets under administration. Could we expect this to continue? And in relation to this, as a BTP specialist, are you worried about the BTP Plus potentially being a headwind for this expectation in terms of maybe weighing on margins overall?

Alberto Nagel: Thank you, Pamela.

Look, for the time being, we are having quite a good trend in the last few days and weeks in terms of net new money. Then we have also -- so we do expect to continue with this trend, knowing that we have different layers to work on. For instance, in order to increase our net new money, it's not only the fact that we rely on new entrants or new hiring, but we are working also on existing financial advisers and bankers to increase their average portfolio. So before, I would say, up a year ago -- until a year ago, we were putting more emphasis only or mainly on new recruitment. Since 9 months at least, we are putting a lot of emphasis also growing existing banker portfolio and financial advisers.

So this is an important layer to be exploited because we have an important part of the network, which is having a target portfolio, for instance, in Premier of €30 million. But the previous recruited bankers and financial advisers sometimes are below this, and we are doing a very strong effort to increase there. So we have different layers to maintain the run rate of €9 billion to €10 billion of net new money. Margins are supposed to be flat. So we prudently assume that -- then, of course, there will be an impact on the BTP new issuance.

But on the other hand, we are also placing more and more, I would say, not only private markets, but also equity or, I would say, more rich product made by our product factory. So we can counterbalance the BTP effect with other placement. And in general, our assumption on the guidance are based on flat margins.

Operator: And the next question comes from the line of Luigi De Bellis from Equita SIM. Luigi

De Bellis: Two questions for me.

The first one is on the fees trend, so highest quarter ever. Can you elaborate on the evolutions for the coming quarters for both the CIB and Wealth Management? How much is sustainable the trend on Q2 that is outstanding compared to the average run rate of the last quarters that are more in the range of €250 million, €260 million? The second question is on the NII and the positive volume effect on the CIB. Can you provide more details on the sequential growth of the loan book in the quarter, along with some considerations on the credit spread and its evolution for the upcoming quarters, specifically?

Alberto Nagel: Thank you, Luigi. So when you look at our fees, you don't have to be neither depressed if you see the Q1, neither overexcited if you see Q2 so -- because we can have this kind of volatility. We have a very good pipeline, very strong pipeline.

But then it depends where we -- when we finish some deal in terms of signing, in terms of closing. So what I can say is that we do think that the trend we are seeing in the next few quarters, the first one and the second one -- sorry, the third and the fourth one are going to be coherent with the guidance of low double-digit growth of fees with some variability. So we can stay between the first and the second. We can stay closer to the second. It depends on some closing of deals, in particular, in CIB.

In Wealth Management, in Consumer, they are more steadier and more predictable. In -- for instance, we know that every single bank, even in Wealth Management have in December and June, some banking fees that are charged in the last quarter of the solar year or in June. So also this is a seasonal element. In terms of NII, we haven't seen a great rebound in margins, but we have seen a bit more demand or availability of credit in CIB. So our overall -- I'm not speaking now of CIB, but speaking in general, our budget, which was supposed to be difficult to be achieved a quarter ago in terms of new loan -- the additional net new loan of €2.5 billion, today, it seems realistic.

And in -- this CIB will stay at least at the outstanding level. So if I remember well, more than €14 billion, which we have today, will stay like this even in the next couple of quarters, so -- and may go slightly up. So we don't see a decreasing trend in CIB.

Operator: Next question comes from the line of Britta Schmidt from Autonomous Research.

Britta Schmidt: Just coming back to the CIB revenues, Arma had a very large contribution in this quarter.

Is it mainly seasonal? Or are you also seeing an increase in the baseline for the revenues here? And then a second question related to governance. There were some comments on the press on the Generali Board renewal pointing to Mediobanca wanting to retain the Board member. Is this related to the continued approval of the Danish compromise? So if you weren't able to appoint a Board member, could we see the Danish compromise disappear? And what will be the impact?

Alberto Nagel: Thank you, Britta. Well, it's not seasonal in the sense that we clearly have seen a stronger intake of mandate starting from already 6 months ago in Arma. Arma is increasing its presence, hiring new partners, is developing some sector that were not so developed in the past, thanks also to our push and investment.

So part is linked to the fact that the market is more supportive and they are seen as a clear leader. So imagine that they have -- 80%, 90% of their business is sell side so today, with the decreasing interest rates and the private equity that has a lot of money in terms of dry powder and also need to offload assets, we think that this trend will continue. Of course, then there can be a quarter which are exceptional because we have closing of some deals and quarter which are less important. So variability in this business is a bit of the name of the game. But this is coming on a trend of consolidation of the presence of Arma in the sector and supportive macro because the macro in terms of cost of funding, cost of financing and deal activity is positive.

Governance. Yes, as I said yesterday, we have 2 main drivers in looking at the election of the next Board of Generali. The first one, given the importance of our investment, we want to be confident that the management team and the Board, which is elected is as good as we can as is possible in terms of delivering the plan and continuing to have the performance -- operative performance and the distribution that we are used to that were very positive for our last few years of Mediobanca consolidation. And the second that, as you said, according to existing rule, in order to have our risk weighting, which is not a Danish compromise, is a bit of a mix because we risk weight part and we deduct part. So it's not a pure risk weighting.

We need to have one representative in the Board. This is linked to not only the rules to that, but also supervision expectations. So for this reason, we may -- we will work at a list to be presented because last year or the last Board was done by the Board of Generali, the Board list and a representative of Mediobanca was included in the Board list. This time, the Board of Generali said clearly that they are not in a position to file for their own Board list. So we need to somehow go back to what we used to do before this kind of practice was introduced 3 years ago.

Operator: And the next question comes from Giovanni Razzoli from Deutsche Bank.

Giovanni Razzoli: One clarification on the numbers and the 2 more strategic questions. The first one, we've seen clearly a very strong advisory fee generation in the quarter with a very strong contribution from Arma. Is it correct to assume that in this quarter, around 2/3 or more than 2/3 of your advisory fee were generated by your foreign franchise? And the second question on the numbers. The Compass origination remained very strong at €2 billion in the quarter or slightly above €2 billion.

I was wondering whether this can be seen as a kind of steady state level, which is difficult to exceed given also capital constraints or even if this level can accelerate as probably lower rates may stimulate more business by Compass. The other 2 questions on the capital. You have focused on the dividend increase and the distribution increase. During the presentation, we have highlighted that Mediobanca is a capital-light business, is very profitable. I was wondering whether in a medium-term perspective, there is a further step that you can take of starting discussing the possibility to return the excess capital to shareholders as in the last couple of years, you mostly concentrated on bolt-on acquisition, while retaining an evident excess net capital.

And the last question, if I may, as a part also of the transaction, which has been announced, in the past, we have seen some of the shareholders focusing on the potential streamlining of the cost base of your holding function. It would be possible to have your view on whether it's possible or not possible to streamline the cost that you are looking there.

Alberto Nagel: So Giovanni, thank you for your question. So yes, 2/3 of the advisory are coming in this quarter from Arma. But Arma, we started to consolidate a year ago, a quarter less.

So because last year, we started to consolidate from Q2. This year, we have 2 quarters included. So there is -- in the quarter, this is the impact. In the 6 months, there is a quarter more. So the difference is also the different perimeter.

Then Compass, I would say, growth is always stable. The beauty of Compass is that is a bit decorrelated from macro and tends to be a machine that prints depending mainly, I would say, from the strength of its distribution network. So the more we invest in digital, the more we invest in buy now, pay later, the more we invest in some physical light branches, the more we can print. And of course, we can have a moment where we are more prudent. This is -- imagine that Compass adjusts its pricing every 2 weeks.

So it's a very dynamic company. So Giovanni, what you're saying is already what we are doing in the sense that when we say, okay, 2026, we're going to distribute €400 million on top. This means -- and we're going to end up at -- the end of the plan at 14% -- core Tier 1 plus 14%. We are already doing what you said. We are always to take into consideration that some bolt-on acquisition like Arma can happen.

So we need always to maintain a buffer, but we could elaborate further on capital distribution towards the end of this fiscal year. Always -- when we look at the holding function, there is always the tentative to streamline them. On the other hand, we need also to take into consideration that holding function are going to have an inflation, which is linked to a number of -- because holding functions are supporting the different business. So basically, we have also inflation there, which is coming from a big development of the group. If you have much bigger consumer finance, much bigger ID and wealth management, you need to invest in IT, you need to invest in platform, you need to invest in risk management, you need to invest in compliance.

So you have DORA, you have ESG. So there are a number of elements that are against the cost cutting or more on cost inflation. Now in fact, seeing holding function going down is difficult. You can see costs going down because you close branches, you do a merger with an entity which has a big overlap, which is not our case with the offer. And so basically, also when we say, okay, there can be some cost synergies.

If they are not branches, yes, there can be synergies in putting together the holding function, but our holding function costs are below €200 million. And so basically, how much can you cut? Basically, can you cut 1/3? Maybe, yes, okay, €50 million, €60 million of less cost in putting together the 2 holding function, but this is not material in a transaction of this kind, and it would be impossible to be done on a stand-alone basis because we have -- we, as all the other banks have projects which are not basically ordinary. DORA, for instance, is a big project. ESG is a big project. Risk management has always to be upgraded.

So it's very difficult to say we can cut severely all the inflation costs. Going back to Arma, I want to tell you that if we strip out -- to give the sense of the underlying business, if we strip out Arma from our numbers, 6 months on 6 months, Corporate Finance is up 40% year-on-year without Arma.

Operator: The next question comes from the Domenico Santoro from HSBC.

Domenico Santoro: I actually answered the question. So everything is clear.

Alberto Nagel: Domenico. I don't know if there are other questions. It seems that we are done. Thank you very much for your attention and patience and hope to see you soon in May when we'll have the third quarter results. Thank you very much.

See you soon.