Alberto Nagel: Good morning to everybody for attending the call of our full year results. This is as you know our first year of the plan and the plan was branded ONE BRAND - ONE CULTURE. And this year led to a strong and capital efficient growth across the board. We had growth in revenue, up 9% to €3.6 billion. All division growing with two positive elements, the growth is where we want to grow so in TFA, which were up 13% to €100 billion.

And RWA overall, so the attention on capital allocation was higher and we managed to reduce RWA by 7% to €48 billion. So both NII and fees grew two digit number and we had even a stronger growth in Insurance. GOP went up 12% flat cost/income and reduced CoR made a 24% increase in net profit and even steeper increase in EPS thanks also to the buyback, which was up 27% to €1.43 per share. Tangible book value flat, ROTE at 14%; an important increase in RORWA, up 30 basis points to 2.7%. CET1 was very robust.

We managed to have a 90 bps increase Q-on-Q to 16.1% and then we announced a buyback, which is part of our attractive remuneration strategy. So this year full year, we have had a total distribution of €1.1 billion, 10% of market cap and roughly 50% increase year-on-year. Out of which, the vast majority so roughly €900 million is cash dividend plus the €200 million of buyback we made last year. So given the strong capital ratio and coherently with our remuneration policy, we have approved yesterday a new share buyback of €385 million to be executed in after the approval of AGM, but is already -- according to rules already upfronted in CET1, which is likely 90, 95 bps of capital consumption. We are on track to deliver our non-financial target in the ESG sector.

So the main I would say feature of this year were basically the push on Wealth Management. The push on Wealth Management was evident in the effectiveness of our Private Investment Banking activity. Basically this year we managed to collect €4.5 billion of net new money and we have to say that our PIV model is becoming stronger and stronger. This is given by or is the results of a stronger integration between teams and our ability to be on events both on CIB and on Private Banking. The another evidence of this strength was the €1 billion that we raised in commitment for The Equity Club, which is I think a very strong number compared to the situation of private equity net new money difficulties across the board.

And also we have enlarged our, I would say strategic partnership with a number of key operator like KKR, Partners Group and Apollo. The second very important news in Wealth Management was the start of Mediobanca Premier. It has been a strong start and we will comment on this after. But I mean after the rebranding and relaunching, the prospective of Mediobanca Premier are much better much stronger and I would say even stronger than expected. We've been working also in offering upscale.

In CIB, the most important element were basically consolidation of Arma, which continues to produce outstanding results and outperforming the market in terms of number of deals and fees, the strong start of energy transition, the fact that the new initiative of the plan -- a part of the new initiative are already in play. We got the BTP specialist status and we are now trading CO2 certificate also outside Italy and we have just launched our presence in Mid International in Germany. Here again, we would say something more on this. But the main take is the -- on one end, increase of revenue and profitability, the second is steep decrease in RWA. In Consumer, we have had another fantastic year in terms of new loans, ability to absorb higher CoF -- higher CoR and higher cost, because of a very important project of digitalization.

So Compass was able to improve numbers in a context of inflation of cost, all kind of cost and has recorded the highest ever net profit in the region of €380 million. We have to stress is that the last quarter was particularly strong with €980 million and roughly €330 million of net profit. This is after some non-operative items we wanted to take on in the last quarters also to prepare better the new year. Basically, we took charges on -- we anticipated €25 million DGS charges. We have done some write-off of goodwill.

So basically profitability would have been even higher without this non-operative item. But if you look at all the single division, we have had quite an impressive trend in record net new money with strong deposit inflow and stronger new recruitment, 30 professionals hired in the last three months. We reached €100 billion of AUM and we have had also quite a significant uplift in terms of revenue. CIB, big rebound in IB activity, in particularly up 49% quarter-on-quarter. This is led by strong Advisory, good lending and ongoing strengthening of the mid-cap platform, notably in Germany.

Again, corporate finance, new loan revenue at all-time high. Robust new loans at €2.2 billion and with a bigger component of Buy Now Pay Later and the revenue confirmed higher than €300 million. So these numbers, they compare very well with the trajectory of a plan. You see this on Page 9 and 10. So we need to go at €3.8 billion and we are already at €3.6 billion and this is led by two components and two different, I would say, driving forces.

It's NII, which is at majority driven by corporate Consumer Finance book. And again, as we are entering in the lower interest environment, we see this as a very positive element, because as you know, the book -- the loan book of Compass or Consumer Finance is mainly done by fixed rate. So basically in a declining interest environment this should give us an edge in terms of maintaining and increasing NII. The second big driver are the fees. The fees growth is led by two basically important producer.

One is Wealth Management is the biggest and you see that basically TFA went up 13% the AUM/AUA went up 20%. So this is another, I would say, strong element to push for further growth in the quarters to come. But this growth, as we always repeat, has to come with optimization of RWA and assets. You see that we managed to decrease by 7% our RWA and we are well on track to -- for the target of our plan. Cost/income asset quality as well, strong EPS and profitability growth on Page 10, you see that we have a plus 27% at €1.53 where we need to go to €1.80.

So basically the trajectory is the right one as it and even better in capital generation. So we have now a target of 14.5% and we are above 15% after the buyback. This is driven by the fact that we are putting a greater focus on capital lighter activity and hence our capital generation is even stronger than the plan. So you see that we had an average capital generation in the previous plan on the previous year which was in the region a 150 basis points. We set a target of 220 and this year we had 290.

So, basically a bank that is growing, but is generating a lot of capital. This of course allows shareholder to have a better and stronger capital distribution and hence value creation. You see that basically we are growing in terms of DPS two digits last year and this year, while tangible book value for technical reason related to some acquisition this year was flattish, but will continue to grow next year. We are quite advanced also in our ES journey. In particular, we are doing a good job -- a very good job in reducing finance emission intensity.

We're already close to the target which was reducing by 18%. Now, we are at 20% emission. We are setting interim sector targets for NZBA, in particular, in oil gas, chemicals, steel, and shipping. We have -- of course, we are already carbon neutral and we are using only renewable energy. We are -- we have advanced even if of course the journey is still longer in term in terms of D&I, in terms of female members as a Mediobanca Key Function Holder and female executive and also total hires.

And I think also in terms of divisional level we are quite advanced. We only had I would say slowdown in green mortgage production because as you know green mortgage market in Italy has been weaker in the last 12 months, but we see this reverting in the second part of the plan. Now, looking at balance sheet most important metrics on Page 15, we see in particular the growth in TFA, which was more than €11 billion and this is part -- is net new money is part is market effect. I think it's important to say that we have had only marginal deposit increase, but we have had a very important AUA/AUM increase. The last quarter was particularly strong with €3.3 billion.

In this quarter, we -- as we would say after we have started to -- we have had our, I would say, campaign in terms of deposit promotion which were supposed to be in the previous part of the year but we pushed them back thanks to the capital market activity we made. And so we see -- we start to see the effect in this quarter but also in the next quarter of net inflows in terms of deposits. Selective loan growth this is part of our choice part of the general market condition, but we see some sign of recovery this quarter with plus 1% Q-on-Q, while we continue to manage the RWA reduction and optimization we have had the minus 7% and -- 2% -- out of which the 2% in the last quarter. Looking at the revenues, we have had positive news coming from all sources of revenues. Of course, Wealth Management was the most robust as well as Insurance 13%, two digit growth.

But we have had quite a sound increase in CIB and in Consumer Finance. And again we have put an emphasis on capital light revenue, which now are 17% higher compared to the previous year. NII has been driven by ALM management. Basically we've been working at the loan book repricing and remix where the vast -- the majority of the growth came out from Consumer Finance, which was very much able to reprice the loan in the last 18 months and we are now reaping the benefits. Corporate loan was slightly down €0.6 billion and hence basically we have seen a widening of the loan yield on the back of the consumer push.

Banking book was higher so €1 billion up year-on-year, so to €11.3 billion with not a longer maturity, so we have a maturity of less than four years and yield up. Funding position has been comfortable. Why? Because we managed to have a number of issuance in the previous part of this solar year in 2024. So we have raised a lot because of favorable market condition. And more recently we are putting more emphasis as I said on campaign to attract new deposits in Private and in Premier.

We have a very low sensitivity so plus or minus €20 million every plus or minus 50 basis points of parallel rate shift. The fee gained more traction in the last few quarters on the back of the strengthening of Wealth Management, in terms of net new money, in terms of recruitment and in terms of also strengthening of CIB. This is organic and ex-organic. Organic because we have had a more positive environment for CIB and Advisory notably but also we have had an important component of new revenues like Arma. Corporate Finance as well managed a 6% increase in fee due to higher business activity and increased Buy Now Pay Later contribution.

Cost. Cost inflation is in part, I would say in good part I would say correlated to our business growth. This year we have had 260 full-time equivalent and basically this is also thanks to net M&A so the one that the company we bought and net of the company we sold like the Revalea. But as our story is a growth story, it's a story of gaining more market share or entering a new market a new product there is an inflation linked to this business growth. As there is an inflation linked to IT project, digitalization, cybersecurity are becoming more and more important.

And there is a general inflation which is related to labor contract renewal and also software so that led to an additional €21 million. So cost/income across the different business remain under control. Basically, we see an increase in CIB which is linked to the fact we are coming more and more capital light so we know that M&A activity is having a cost/income which is higher than the rest of the sector in IB, but is something that we want because we want to produce revenue which are not asking for capital in CIB or less capital. CoR reduced to 48 basis points. Basically, we don't have great news here in the sense of new news in the sense that this is lower than what we have expected.

Our -- we have used a very low level of overlay €47 million. We still have like onetime loan loss provision of overlay. Without overlay our cost of risk would be flat at 57 basis points. Here I would say that CIB and Wealth Management were basically producing negative or very low CoR, while we expected an increase in CoR of Consumer Finance mainly driven by the new mix which is more geared into personal loan. The NPL ratio gross ratio didn't change much notwithstanding the fact that we didn't grow in terms of outstanding loan.

When we go to capital on page 24, it's very important to note what is happening year-after-year. So basically, we were a bank where capital allocation was mainly driven by CIB. We are not anymore a bank of this kind and this is coherent with our target. So only a year ago we had 38% of capital allocated to CIB now we are at 31%. This matched with the increase of the rest and the increase of profitability in CIB led to an overall increase of all return on risk weighted assets.

At group level it went up to 2.7% so 30 basis points so important increase. The only marginal decrease for technical reason is Consumer Finance because this year we have adopted the first time application of the model. But we think that this kind of impact can be reversed in the year to come. Capital generation has been strong Page 25, basically 250 bps earnings generation plus business growth optimization for another for a total 290 bps as we said. Then this was absorbed by 175 bps in terms of payout 50 basis points of M&A to be partly reversed when we will pay Arma with own shares with Mediobanca shares.

And then as I said we landed at 16.1% and then minus 90 basis points of the new share buyback we landed to 15.2%. If we go to divisional results I have said already most, but I would say that basically we were very pleased with all the business trajectory. If we start from the priority which is Wealth Management I think more and more we are convinced that the choice of last year or so using our brand as a catalyst and making closer having all the Wealth Management closer to IB is producing excellent results. In terms of net new money if you see on Page 30 we are now among the top three producer of net new money after Mediolanum and Fineco and we continue to hire and to have net new money that in terms of percentage of existing AUM is quite high. We think that a paradigm is shifting in the sense that after the repositioning of Mediobanca Premier instead of mainly calling new professional to join us we are now asked to be joined.

And I think this give us a different edge in terms of hiring and will be I think a very positive catalyst in the quarters to come. The numbers are I think explanatory on Page 31. If you see our trajectory in only eight years, where we started to be – I mean you remember that we bought Banca Esperia and we created Mediobanca Private in 2016-2017. Again, at that point we had an incidence of revenue of Wealth Management of 19%. Today we are 30%.

We produced €50 million of GOP risk adjusted. Today we produced – this year we produced €300 million so six times what it was only eight years ago. And you see also the fee level now is the biggest component of the group at 52%. Why I'm saying this? Because Wealth Management growth can really impact Mediobanca in terms of numbers, in terms of profitability, in terms of RWA absorption and in terms of valuation. And we have really a territory ahead of us in terms of possible growth, so it's going to be something of this kind for the next 10, 15 years of growth.

Of course there can be a year where we are more effective year where we are underperforming but the opportunity is there and I think we have all the tools to – and we are even more convinced today than a year ago. You see basically Mediobanca Private and CMB today they reached €45 billion of total AUM. We have had ability to raise liquidity events and raised net new money which is 30% above the last five years. And this is also linked to the fact that we have invested in private market initiative. Some of them are branded Mediobanca for instance The Equity Club which raised the €1 billion is an evidence that when we do something, which is basically tailormade by Mediobanca capture some specific incredible teams like investing in mid-cap.

We have very, very strong feedback from clients. We have basically also add a very important number of new clients with this program, which is very important for the future business. Mediobanca Premier has had a very strong start. I mean bankers, financial advisers they want to come and work for this brand. They want to come and work for a group that has investment banking facility and can build and develop an intimate dialogue with families which are entrepreneur.

So we -- this is the sweet spot we are on. And I think it's a sweet spot that we continue, because basically this is the backbone of the Italian economy. Numbers are pretty self-explanatory. So 13% total income increase and 29% net profit. Here again, we always discuss internally how fast should be our growth? And how much should be basically the cost we have to spend for this growth.

For instance, cost here, have been a bit higher than expected. Why? Because basically the more you grow the more you spend in terms of cost of recruitment, but I think in this moment it's very important to keep our growth and not to basically look at mainly cost/income, rather to look at the increase of our network increase of our AUM base. If we go and see CIB, again, there are reasons to be happy even in this field. Why? Because there is an important shift in the focus, we have said something before. You know that.

But if you see the number you see that today Mediobanca is at majority producing revenue outside Italy. Thanks to this diversification of source of revenues and geography. It's basically getting an important improve on number of transaction announced, up 43%. It's targeting the target clients we had in mind. So basically private equity which are now involved in 50% of our transactions and is mainly -- mainly the most important effort that have been done in digital economy with Arma and energy transition with a new team that was setup already some years ago and produced very interesting transaction in Italy, Spain and Portugal.

We think that mid-market on the back of the success of Italy can be another driver of growing revenue and diversification of revenue. For this reason, we have hired the team in Germany. But of course CIB is not only Advisory it's also lending and is also market activity. In lending, you may know that we have set targets for ROA of each transaction. This led to a more selective production and led also to be there when Mediobanca is playing a major role in M&A.

So M&A led financing. While in markets, again, we are pursuing activity like BTP specialist status, that are basically not asking for big capital allocation. Here again, you see Page 37 is a very important slide. You see the evolution of our capital allocation. In 2016 where we didn't have yet AIRB adoption we had a totally different RWA intensity with €27 billion of RWA.

We are down 45% this year, compared to 2016 and we are down 23%, compared to last year. This is diver number one focus on capital light, which is I shouldn't say easier for us compared to others but this is only matter of relative size. The capital heavy activity within Mediobanca CIB were not so big that if you can -- if you are in the process to trim them you suffer a lot in terms of revenue and profit. So we could manage this with increased profitability. Thanks to more M&A and less capital allocation.

Here you see league table and general market position which is broadly, stable/increasing. I would say that this year M&A and DCM were the strong producer, while as we know ECM is still weak. And for the time being, we don't see a big jump coming in the next few quarters. While we see lending recovering – slight recovering during the course of the next few quarters. Consumer Finance, strategic path was mainly on reinforcing.

On one end its strength in own distribution. Compass has always had a huge strength in having a very effective proprietary distribution network. Over time, you can see this slide on Page 46 it's very well done. Thanks, Jessica to have produced this. In 2020, we were producing €6.4 billion of new loans, out of which €1.7 billion were done by basically the network of Compass itself.

Four years later down the road we are producing €8.4 billion but €3 billion are produced by the network of Compass. This gives you the amount of work – gives the sense of the amount of work we have been doing to strengthen the distribution in I would say in an innovative way. So it's not only branches is franchise is new kind of light and variable cost like Compass Link. And more recently the digital distribution since that now a one-third of the total directly distributed personal loan are done through digital. And this also brings us to the fact that new distribution channel like digital platform, which we have heavily improved and reinforced plus Buy Now Pay Later are another very important element to keep Compass growing in terms of new client acquisition and in terms of opportunity to do repeat business.

Now I think we are the largest player in Buy Now Pay Later at physical level with 26000 merchants now under our convention and we are heavily investing in the e-commerce one. So I think that this kind of trajectory of Compass is driven by this kind of investment and strategy. So you see on Page 47, the increase in terms of net new loan and the ability to price the loan at the right condition in terms of also passing through the higher cost of funding and also absorbing the higher cost of risk which is related to the different mix. Because we are – as we produce more and more personal loan directly distributed by Compass, we have higher I would say price and condition and slightly higher cost. The net of this is highly positive to the balance sheet of Compass and is a win-win situation.

Buy Now Pay Later you see the incidence on Page 48. Basically we are now at roughly €140 million, €150 million of new loan production per quarter. And the stock is going up. And this is having an impact in fees because according to the existing accounting rules part of the revenue of Buy Now Pay Laters are fees and you see that in fees this is becoming more material with €20 million of incidence, while Insurance fees for regulatory reason are going down. So Buy Now Pay Later helps also Mediobanca and Compass in particular to keep on – to keep high the level of fees.

CoR of Compass is expected –going as expected in the sense that with the different mix and back to pre-COVID level we have forecasted something like between 15,16 basis points of higher cost of risk compared to original guidance. This is happening so quarter-by-quarter so we don't have this quarter any different numbers. Given the fact that the mix of loans is slightly different because it's made by more personal loan more pricey of distributed by Compass. Insurance add -- in particular Generali had quite a positive contribution. This is on the back of basically, positive operating performance of the company plus, some non-recurring items including asset disposal.

What has to be noted this year is that, as we know, in April, Brussels approved a new Basel framework and hence the CRR was approved. And the transitionary prudential treatment of our minority stake has become therefore, permanent. So this kind of risk weighting is there to stay. And of course, as we know is quite favorable. I would say that, we wanted -- as a closing remark, we wanted -- when we started the plan last year on Page 57, we wanted to have a stronger industrial footprint of the group, which could drive above average growth and sustainable growth.

This would have led superior capital generation, with higher distribution and lower execution risk. After one year, as you can see summarizing on Page 56, we have more than what we wanted. So basically, in terms of numbers, but in terms of velocity rapidity at which we are changing the profile of the group. The bank is more and more centered on Wealth Management, with a capital-lighter CIB, which is more international so less dependent from single market or a single transaction like it used to be in the past less capital-heavy and more synergy with Wealth Management. Now, 55% of the revenue are nondomestic.

And this is coupled with two engines that continue to produce growth and cash flow, at a very high level Consumer Finance on one end, and Insurance on the other hand. All this is leading to a best-in-class organic capital generation, and hence give us the possibility keeping quite healthy capital ratio to have a very I would say demanding and good shareholder remuneration for this year, but also for the year to come. So in terms of guidelines, we have to set to Mediobanca ambitious target, because as we believe Mediobanca is going to be known in the future and already today as a Wealth Management dominant operator, we want to have a net new money which is at the top level in the industry. So we set a target between €9 billion and €10 billion of net new money. We will have flat revenue flat RWA.

This is on the back of some loan growth, which we expect for this year, but this is going to be offset by optimization and regulation. Growth in revenue it will be lower than this year, but it still will be appreciable growth in revenue with

two components: NII growing low-single digit driven by Consumer Finance. Consumer Finance as we know, as we said, as a fixed rate loan book which should benefit particularly when interest rate is going to go down further. Fees are going to be up, low double-digit and the main driver continue to be will be Wealth Management and CIB. Cost/income flat or in the region of 44%, an important investment in distribution platform digital and taking into consideration also higher regulation costs.

Cost ratio -- cost of risk ratio under control at 55 basis points using partly as expected overlays. EPS growth between 6% and 8%. And again, a reiteration of shareholder remuneration, which is done part in cash 70% and also implementing the share buyback, we have approved yesterday. So thank you very much for your patience and attention, and now I give you the floor for questions.

Operator: Thank you.

[Operator Instructions] Thank you. We are now going to proceed with our first question. The questions come from the line of Azzurra Guelfi from Citi. Please ask your question. Q –

Azzurra Guelfi: Hi, good morning.

I hear you during the conference call you are very update on the growth and the success of your strategy. You have managed to give us a very impressive buyback results. But then when I look at the outlook, I'm a little bit puzzled. And if you can help me to reconcile it. You give EPS growth for next year between 6% to 8%.

So, I strip out the buyback this growth in terms of net profit would be between 3% to 6% depending on share price and how much share you canceled. And this is very low compared to what you have delivered in the past where your engine for growth were not yet up fully up to speed like the Wealth Management MBCIB integration and plan the rate coming down expected for next year, which should have been consumer credit. So, what is the conservatism? Is it all linked to higher cost? Because if I look at you expect actually cost to increase because your cost/income is going up year-on-year. Is there any area of conservatism or any area on cost that you could optimize more? And the second one is on capital. It's very strong.

And you have managed to do a significant risk-weighted asset decrease this year. But you're actually just giving out an indication of flattish for next year. Can you give us a bit of color if you have anticipated anything this year? Or if there is more action that could be considered but you are not yet sure to be able to deliver in 2025? Thank you.

Alberto Nagel: Thank you, Azzurra. Look in terms of EPS basically as we are investing a lot and we think that is -- there are this is the right way to let the company develop in terms of hiring people invest in digitalization invest in cybersecurity.

So, part of the growth in revenue is going to be absorbed by cost. Then in terms of -- I don't think we have been prudent because in terms of basically revenue we have forecasted an increase in loan. We have forecasted an increase of €3 billion of loan coming from basically a mix of the three business recovering loan. But I think now it's a moment to invest where basically the opportunity of growth and becoming a more important player in each of this business require more investment. Some costs related to this investment are higher than expected.

When you do the hiring you have to pay in particular in Wealth Management you have to pay an noncompete. So, there again can we -- should we stop to hire or grow less than €8 billion to €10 billion and have a slightly higher EPS? We don't like this. We'd like more to grow. So, basically, this is coming from I would say a very important level of increase of EPS this year and you have to see it compared to what we said 15% average in the next three years so during the plan. I think if you put together these two, we are already more advanced than what [Technical Difficulty].

In terms of capital, yes, we are producing more capital. We think that there will be RWA flattish environment this year. We are going to create as much capital as this year a bit less, but higher than the plan. So, we said 220 bps our capital generation per year. This year we're going to be -- we have been at 290 bps.

We will be in between these two numbers. And this also because you know that we will have LGD at 40% with the standard in 2025. We may have some reversal factor in Consumer as I said. So, there's still a couple of apart from LGD which is taking more time but -- sorry the PD the LGD and the Compass factor can be reversed and hence we're going to have RWA flat this year.

Operator: We are now going to proceed with our next question.

The questions come from the line of Antonio Reale from Bank of America. Please ask your question.

Antonio Reale: Hi. Good morning. It’s Antonio, Bank of America.

I have two questions and one follow-up please. The first one is related to your guidance on fees, particularly around Wealth Management. You had a strong year this year. And yet, in Wealth I think you had €8 billion of inflows despite sort of the Credit Suisse event. Now you're guiding for €9 billion, €10 billion next year, which is a big number.

So are you seeing the development of fee margins next year, because the mix of products, of course, is very important? We've seen growth mainly in the lower fee margin products like BTPs, for example. Can you talk about this trade-off if it exists? And among which asset class do you see the most opportunities to grow? And what fee margin would you expect? That's my first question. My second question is on CIB, can you talk about the outlook? And if you think it's really coming back? And also, remind us of the positive in terms of synergies into your Wealth Management. I think you've talked about liquidity event structured products, but I think it would be great to have more color. And lastly, just really a follow-up on the answers you just provided to Azzurra on capital distribution.

You mentioned capital strong outlook you were above 16%, which I think we need to go back a few years to see you with this much buffers. Now you talked about regulatory tailwinds. And with EPS and flat RWA, you're going to continue to generate even more capital organically. So my question is what are you going to do with all this capital? What's stopping you from considering special distribution? Are you building buffers on the M&A side? Just any more color you can share would be much appreciated. Thank you.

Alberto Nagel: Thank you, Antonio. First of all, I have to say that in the last few weeks and months we have seen a recovery of the, I would say, managed assets intake. So, even July has been quite a good month for managed assets. So the name of the game this year is back to managed assets. Of course, we will still have competition from BTP but we see clients more and more keen also to take on managed assets.

Hence, basically for this reason, we set €10 billion -- between €9 billion and €10 billion of net new money, which is split between, I would say, €4 billion in Private, €4 billion in Premier and €2 billion in factories. Of course, in Premier -- in Private, there would be a component of deposits increase because this year unlike last year we are putting more emphasis on promos, because we see this as a favorable moment to increase our TFA and then to convert into managed assets. Managed assets, it's the name of the game also, because we have maturity of AUA assets, which we are pushing to convert into managed assets. So hence, we see stable ROA. Stable ROA where we see also an improvement in management fee ROA, because management fee ROA would be -- management fee would be stronger this year and ROA management would be slightly up on the back of our effort.

When it comes to CIB outlook, we think that the corporate finance M&A mood will continue to be positive unless some big geopolitical issue arises. Why? Because basically we see the recent weakness in industrial data and in job production, I would say first in Europe and the second in US, a catalyst for faster interest rate reduction. Interest rate reduction and availability of funding are the key element to push for investment banking activity, in particular M&A, but also would be also DCM will continue to be good. And acquisition finance will be better while we are still mixed or neutral on the possibility to have another good -- one very good IPO years because IPO are still a bit subdued. So in essence, I think we can do another very good year in CIB, because basically we will have one technical factor, which is the consolidation for the full year of Arma.

We will have a new source of revenue over the -- not immediately but in the second half coming from mid-corporate. We will have the BTP specialists up and running so new initiatives kicking in and overall positive market. In terms of capital distribution, let's see the progression. If we keep on producing all this capital, either we do some acquisition from now midsized acquisition. Today we don't have anything on the table like the Arma one, so basically midsized bolt-on acquisition that can absorb a bit of this capital or we'll have to understand and think about what we do in terms of extra distribution at the end of the plan.

Antonio Reale: Thank you.

Operator: Thank you. We are now going to proceed with our next question. And the questions come from the line of Giovanni Razzoli from Deutsche Bank. Please ask your question.

Giovanni Razzoli: Good morning, everybody. A couple of questions on my side. The first one is a clarification, I think that the impact from the introduction of Basel IV for Mediobanca is going to be neutral. Can you share with us the details of this and possibly what would be the main driver even if as I said I understand that the impact would be quite limited? And I was wondering whether you can share with us if you think that at a broader sector level in Italy the impact of Basel IV may have some impact in terms of capital generation for the bank's distribution or M&A activity. The second question is on the trend in the Q4 for the CIB fees, especially in the Advisory business, which mostly almost doubled quarter-on-quarter.

I was wondering whether there is here and some large market transaction impact, which can be considered one-off. So what could be the run rate under normal market condition for the CIB revenues on a quarterly basis? Thank you.

Alberto Nagel: Let's start with the second one. I think in CIB you always have from quarter-to-quarter, some element of concentration of transaction. So I would not consider this quarter in terms of fees of CIB as the run rate.

I will consider -- I mean, I would say this year -- this quarter has been 290, I would say that -- I always said that we are happy if we have a quarter between 230 and 240, 250 max. Now we went to much higher than this. It can happen and we'll definitely be there in some quarters in terms of contribution from everybody. But I would say that this quarter was particularly good because of concentration not one big land market transaction, but several. In terms of Basel IV, we don't have -- so CoR Tier 1 2025 with the share buyback will be in the region -- including the share buyback will be in the region of above 14.5%.

And this is comprehensive taking already into consideration all the Basel IV impact. So basically we have neutral/very modest impact. I'm not in a position to tell -- I thought, I mean you meant -- you indicated Italian banks, I don't know if they are the most exposed. I would think that maybe other non-Italian players are most exposed in terms of Basel IV like maybe the French or others. But we have seen that some initiatives being postponed like FRTB.

So in general what I can tell you is that supervision and supervision attitude is such that over time the difference between RWA and assets will be less strong than it used to be. So there is a continuing effort from supervision to basically smooth this kind of important difference between assets and risk-weighted assets. Now as we are not the company that has the most or even maybe we can say at the least uplift in terms of arbitrage of model I think in any case we'll be one of the least affected by any kind of this new approach.

Operator: Thank you. We are now going to proceed with our next question.

The questions come from the line of Pamela Zuluaga from Morgan Stanley. Please ask your question.

Pamela Zuluaga: Hello. Good morning. Thank you very much for taking my question.

The first one is on the deposit growth that you say you're targeting. You're saying that you want to grow the deposits so that you can convert part of them into assets under management. I was wondering if you could tell us how much can you comfortably convert without worrying about liquidity? The second one is on the cost of risk for the Consumer Finance business. You said that it's been trending upwards slightly because of the change in the mix. So where do you see this cost of risk stabilizing once we see the full effect of the mix shift? And if I may just a quick follow-up.

As you've flagged you've done a great job increasing total financial assets but I wanted to confirm again your view on the management margin specifically. How are you thinking about it moving forward? Or should we continue to expect growth to come mostly from volume? Thank you.

Alberto Nagel: Thank you, Pamela. Good morning. We think that a target of converting 70% of the promotion or the campaign into managed assets is the target we should have.

Let's see if we do the 70% we do much more or less. CoR we always said that sort of pre-COVID level makes sense no? It made sense because of the nature. And it makes even more sense today with a different mix. Why? So sort of pre-COVID level so something in the region of €220 million meaning industrial CoR of Consumer was already a very good level pre-COVID. Now with this new mix which is more geared into personal loan I think the sort of €215 million €220 million it's a target we have in mind.

Now it won't be this magnitude because we will use part of overlay but I think it's reasonable to think that this number looking forward. I confirm that management fee marginality is going to stay where it is and slight improve on the back of strong push on managed assets we are pursuing. And I have to say and I have to repeat what I said we are seeing some positive feedback from clients. So clients are more and more interested now in managed assets rather than only in AUA. Of course, when we will have the placement of the BTP we will have more BTP.

But customers are now back to managed assets compared to the situation compared to the environment we have been seeing in the last 12 months -- 18 months.

Pamela Zuluaga: Thank you very much.

Operator: Thank you. We are now going to proceed with our next question. The questions come from the line of Hugo Cruz from KBW.

Please ask your question

Hugo Cruz: Thank you. It's mainly about NII. So you guided for €3 billion loan growth. That's quite a lot almost 6%. But then you guide for also margin to expand in Consumer with lower rates.

So I struggle to reconcile the guidance of limited growth in NII. So where should we see the NII weakness? And is that related perhaps to the cost of growing in deposits? So a bit more guidance here. And perhaps or the NII guidance is influenced by your hedging strategy as well. It would be very helpful. And then just a question on -- you're looking at one year ahead with your guidance this year.

Do you see any risks of the bank tax coming back? Any risks there impacting the Italian banking sector? Thank you. Alberto Nagel : So €3 billion are coming from on one hand recovery in CIB. Why recovery in CIB? Because there has been this year a very low use of RCS. We think that this year for technical reason there will be more demand for that and more use for that. There will be some more acquisition finance.

That would be in the second part of the year coupled with lower interest rates and more demand for mortgage. And Compass will continue to print the growth we have been seeing. So, all together, this makes this €3 billion. Now as I said as we are pushing a lot on TFA and conversion, we are more active in this promo campaign. We started to be more active after we have done the funding plan.

So we have done most of the funding plan with bonds up until the third quarter, starting from the fourth quarter, and even in this quarter we have put more emphasis on campaign for deposits. So we will have a transitional period, which will last next year of higher cost of deposits. And this is one reason for you to reconcile a bit on one hand assets yield and liabilities. Overall, this should produce not only an increase of NII. But this increase NII could be even better if we have a further decrease in interest rates, because Compass book is fixed rate books and it adjusts immediately while this fixed rate books are longer maturity adjust immediately in terms of liability and hence the NII of Compass will benefit from a further decrease in interest rates.

Tax on bank you have always this room or in Europe all over the place, because of the situation of public finance. So, basically, it's very difficult to elaborate on this. We can -- what we can say only is that banks are a big producer of revenue for the state in terms of tax and already tax rate for Italian banks is among the highest in Europe. And then we are now only reading speculation in newspaper but we are not involved in any discussion.

Hugo Cruz: Thank you very much.

Operator: We are now going to proceed with our next question. The question comes from the line of Domenico Santoro from HSBC. Please ask your question. Domenico Santoro : Hi. Good morning.

Thanks for taking my question. First of all, thank you very much for the disclosure. We never say this, but thank you for the very good disclosure on numbers. I think this helps also the story and thank you to Jessica and Luisa. I do have two questions.

One on the NII and one on capital and distribution, which is probably more a follow-up given that you just answer to the colleague on the NII. When I see your guidance on the NII low single-digit, it looks a bit timid compared to the other banks that have presented the numbers recently they are a bit more bullish. So given that you just said that NII can be better if rates go down, I wonder if you could tell us what is the exit level that you imagine in terms of Euribor in June of next year, which is the base for your estimate and guidance? And the other question is on the capital instead, because you're generating more and more capital. And my understanding is that, the 100% of net profit is a bit of a limit for you to distribute to shareholders. But you just before answer to the question of the colleague that, you might think about some extra distribution at the end of the plan.

So that basically implies that you can go beyond that 100%. And in order to make some calculation, what is the level of capital, which you can go below given the peculiarity of your business? Thank you very much.

Alberto Nagel: Good morning. Thank you, Domenico. So our assumption is that of Euribor of 2.3% at June '25.

So maybe you are right in terms of being timid, in terms of NII but we prefer to be timid and to invest more to have some net new money more net new money which requires a bit of higher cost of deposits. So basically, it can be a phase where we want to stress this because we want to create then more conversion opportunity. And basically, we prefer to have a slightly higher cost of deposits and funding less bonds and more deposits and a bit of higher cost of funding. Capital, look, we set the target of being in the region of 14% at the end of the plan. We have set a target of having €1 billion of share buyback.

So we have announced the first last year this year the second. If things are going as we want we're going to announce at June 2025, the third one and that should be making up the sum of €1 billion. So there is still an open window for June 2026 to do more, if we have enough capital and if we don't have better opportunity of growth in terms of bolt-on M&A. So there is still this possibility to do more provided that we have enough capital and we have also -- we don't have other M&A opportunity. The payout in general the payout should be in the region of 100%.

So this is a limit all banks have and we have two. So basically, we cannot play without this basic rule. But still we have some flexibility because as I said in June 2026 we'll see how -- where we are in terms of numbers in terms of capital in terms of also supervision expectation and then we'll take a decision.

Domenico Santoro: Can I have also a follow-up on the NII sorry what has prevented the NII in the CIB this quarter and Consumer Finance also to expand given the volume evolution?

Alberto Nagel: There was a technical element this quarter in the sense that normally Compass hedges is activity the deposits and the cost of funding and the assets twice a year. So basically in June and December, we may have some one-off element related to the cost of hedging.

So my belief is that next quarter Compass will continue to show the growth we have been seeing in the previous quarter because there was this one-off element. In CIB is more related to volume. In CIB volume has been weak for two reasons. One intended. So the kind of loan returning ROAC certain threshold we have basically not renewed but the overall market has been weak in terms of production.

So we do expect this is going to be partly reversed in the coming year, because there would be more activity but it will take some time of course to build this. So it will be a growth in CIB more in the second half of the year rather than the first half of the year. While in Compass we will continue to see growth in every quarter.

Domenico Santoro: All right. Thank you, very much.

Operator: We are now going to proceed with our next question. The questions come from the line of Britta Schmidt from Autonomous Research. Please ask your question. Hello Britta, your line is open. Britta, we couldn't hear you.

If you can just ask the question, your line is now open.

Britta Schmidt: I've got three questions please. The first one on the net new money, can you give us an idea about how much of that was recruitment? And how much of that was organic and how much of the €9 billion to €10 billion for 2025 is coming from hirings versus organic? The second one would be on the Wealth Management margin. Do you maintain the 90 basis point ambition? And what are the main tools to get to that? What sort of mix shift in TFA do you think you need to deliver or what sort of shifting clients do you think will lead to that? And the third one will be on the cost of risk. I think you said ex overlays it was around 57 basis points.

That did include some write-backs this year? What is your underlying assumption going forward? Is it fair to say it's around 60 to 65 basis points with the mix? And maybe you can give us an idea as to what overlay usage you have included in the 55 basis points for 2025? Thank you.

Alberto Nagel: Hi Britta. Starting from your second question. What we are doing on the back of the repositioning and rebranding of Mediobanca Premier is also all new set of products which are in-house guided. Doing this like other operating to the market, we are going to internalize more marginality.

And so basically, all the efforts is to do more managed assets and to improve the marginality of this. Of course, the overall marginality will not change much because it takes time. So you do this year and there is sort of maturity of existing products. So the net new money and the one that is coming to maturity is not moving the overall -- greatly the overall marginality which will stay as it is broadly. But in terms of management fee ROA, we will have some sort of uplift.

In terms of net new money sources, we will have in Premier, give you a bit the breakdown. In Premier is different from Private. So we have €4 billion each target. I would say Premier will come 60%, 55% from recruitment and the remaining part from organic. In Private, it will be less recruit.

It's not a big -- it's not a big driver for Private. It will come -- the vast majority from existing network and I would say 30% coming from liquidity events. So basically, liquidity events, as we know in Private is a big driver of growth. In terms of overlays, we as expected, we plan to use in the region of €90 million this year, so coherently with the plan. So last year, we used a bit less.

This year, we're going to take €UR 90 million and we will stay still with an important buffer overlay for the last year of the plan and after. This is a bit the -- what we have in mind as of today.

Britta Schmidt: Thank you.

Operator: We have no further questions at this time. I would like to hand back to you Dr.

Nagel for closing remarks. Thank you.

Alberto Nagel: So just to say something at the end for the next coming Q, the next coming Q will be basically similar to this one net of basically the nonrecurrent items. So this month, we have had some I would say supporting factor from nonoperative item of Generali. So of course we need to strip this out.

In terms of fees, as I said, it will be basically a good quarter without the extra I would say component of concentration of fees. So, I would say closer to the Q3 and -- but also -- and over time of course, this fee level will grow because basically, we will not have a big shift in Wealth Management because Wealth Management is more done through quarter-by-quarter increase rather than a big jump in the first quarter. In Wealth Management, normally you have December and June, where you have some banking fees, while in September and in March, you don't. So basically NII will have this trajectory which will go progressively up. So, it will take some quarters to go up because we will need to do this new loan production, but it will be a very solid quarter taking into consideration this technical element.

Thank you very much and hope to see you again when we do the first quarter results. Thank you very much.