Banca Monte dei Paschi di Siena SpA (BMPS) announced a notable increase in net profit for the second quarter of 2025, reporting a 24% year-on-year rise to €413 million. The bank’s financial performance was supported by a robust increase in commercial savings and a significant boost in wealth management inflows. Trading near $8.63, the stock appears slightly undervalued according to InvestingPro analysis, with a market capitalization of $10.9 billion and an attractive P/E ratio of 4.9x. The stock has demonstrated strong momentum, delivering a 72% return over the past year.
Key Takeaways
- Net profit surged 24% year-on-year, reaching €413 million.
- Gross operating profit increased 3% quarter-on-quarter.
- Wealth management inflows rose by 22% compared to the previous year.
- The bank is preparing for a transformative merger with Mediobanca.
Company Performance
Banca Monte dei Paschi demonstrated strong performance in Q2 2025, driven by strategic growth in its core banking operations and a focus on expanding its distribution channels. The bank’s efforts to improve efficiency were evident in the reduced cost-to-income ratio, which improved from 48% to 47%. With revenue growth of 9% and an impressive dividend yield of 11.19%, the bank maintains a GOOD financial health score according to InvestingPro’s comprehensive analysis, which offers 12+ additional key insights for subscribers. This positions the bank favorably amidst ongoing industry consolidation trends.
Financial Highlights
- Net profit: €413 million, up 24% year-on-year.
- Net operating profit: €448 million, an increase of 0.8% year-on-year and 9.4% quarter-on-quarter.
- Gross operating profit: €535 million, a 3% rise quarter-on-quarter.
- Total commercial savings: €167 billion, an increase of €5 billion year-on-year.
- Wealth management gross inflows: €4.5 billion, up 22% year-on-year.
Outlook & Guidance
Looking ahead, Banca Monte dei Paschi anticipates further growth in 2026, with profit before tax expected to rise year-on-year. The bank is optimistic about achieving annual pre-tax synergies of €700 million from its merger with Mediobanca. There is also potential for distributing a 100% dividend without impacting capital levels, reflecting confidence in its capital position and future profitability. For detailed analysis of BMPS’s growth potential and merger implications, access the comprehensive Pro Research Report available exclusively on InvestingPro, covering 1,400+ top stocks with expert insights and actionable intelligence.
Executive Commentary
CEO Luigi Lovallo emphasized the bank’s strategic direction, stating, "The time has come to change the approach to banking for the good of all stakeholders." He also highlighted the company’s progress, noting, "We are moving ahead of our target, thanks to our strong and resilient business model."
Risks and Challenges
- Market Consolidation: The banking sector is witnessing consolidation, which may affect competitive dynamics.
- Regulatory Changes: Potential regulatory adjustments could impact operational strategies.
- Economic Conditions: Macroeconomic pressures may influence consumer behavior and lending activities.
- Merger Execution: Successfully integrating Mediobanca will be crucial for realizing projected synergies.
- Interest Rate Fluctuations: Changes in interest rates could affect net interest income stability.
Banca Monte dei Paschi’s Q2 2025 earnings underscore its strategic initiatives and operational efficiency, setting a positive tone for future growth and market positioning.
Full transcript - Banca Monte dei Paschi di Siena SpA (BMPS) Q1 2025:
Conference Operator, Chorus Call: Good morning. This is the Chorus Call conference operator. Welcome and thank you for joining the MPS Group First Quarter twenty twenty five Results Presentation. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.
At this time, I would like to turn the conference over to Mr. Luigi Lovallo, Chief Executive Officer. Please go ahead, sir.
Luigi Lovallo, Chief Executive Officer, MPS Group: Thank you very much. Good morning, everybody. Many thanks for joining us for the Multipascal first quarter twenty twenty five results presentation. We started the year at full speed. Our network successfully drove growth of commercial activity across the board.
These were visible particularly in our fees and commission dynamic, the inflows into wealth management and the trends in our lending and savings volumes. Overall, this is a confirmation of Monte Paschi competitive market strength, the value of our people and our high performing business model, which is able to adapt to changing macroeconomic condition and evolve with the transformational trends reshaping the banking industry. Our ability to continuously reinforce our home foundation enable us to reach a record fully loaded CET1 ratio of 19.6, one of the highest in Europe with a solid capital buffer. We are making excellent progress confirming that our organization is agile and capable of adapting to our clients’ needs effectively. Our people are lightning focused and committed, proving once again that they are without any question our most valuable asset.
To draw a metaphor for this first quarter results, I will call this the overture to the symphony, which I believe we are capable of performing with our planned business combination with Mediobanca. Since we made our offer in January, Mediobanca has woken up. We appreciate that he has recognized the need to focus on his core banking activities after more than a decade of relying on the dividends of his minority stake in general. As a part of this, it has announced an exchange offer on Banca Generali. We don’t see this as an obstacle in our objective to create Italy’s Third major financial institution.
We are fully determined to follow through on our transaction with a powerful endorsement that our shareholders gave us last month at our AGM. Let me be crystal clear. Mediobanca’s offer for Banca Generali is not an alternative to our more transformative project. While it took our offer to energize Mediobanca into taking control of its balance sheet. The move to expand in wealth management is coherent with our industrial rationale and ambition to create a new competitive force in Italian banking.
Having said that, we would clearly need to fully analyze the transaction strength and weaknesses. There are important questions that need to be answered before we can assess the financial impact for Banca Generali transaction. Let’s go now to some key highlights of first quarter results. Net profit of the quarter hit EUR $413,000,000, up by 24% year on year, driven by a strong operating performance. Net operating profit came to $448,000,000 with positive yearly and quarterly trends.
Thanks to increased fees contribution, effective cost management and reduction in cost of risk. Gross operating profit at $535,000,000 was up quarter on quarter, thanks to the both higher revenues driven by the increase of fees and lower operating cost. Fees and commission also supported the early trend enabling us to cross $1,000,000,000 revenues as last year, while HR costs were higher mainly due to labor contract renewal. Strong commercial performance in key strategic areas, in particular with Wealth Management gross inflows of EUR 4,500,000,000.0 and EUR 1,700,000,000.0 of mortgages, both with significant growth compared to last year. Operating costs fell to EUR $472,000,000, thanks to the strict discipline in the non HR cost enabling to partially offset the year on year increase of labor cost.
Cost of risk at 46 bps decreasing versus 53 bps in 2024 with a declining trend in line with the guidance for the year. The liquidity position of the bank continues to be sound. And finally, as I mentioned, core Tier one ratio fully loaded at the record level of 18.6 supported by the positive impact from the first time adoption of Basel IV. Button on Tier one ratio is close to a remarkable level of eight nineteen bps. Let’s move on now to more details of our results.
As I have just mentioned, NetPropy of the first quarter reached EUR 113,000,000, up by 24.2% year on year, driven by strong operating performance, which confirm the solidity of our business model. We noted that 14 growth versus the fourth quarter twenty twenty four, excluding positive net tax in both quarters. Now moving to the next slide, we are presenting the net operating profit, which in the first quarter amounted to EUR $448,000,000, showing a positive trend, growing plus 0.8 year on year and growing plus 9.4% quarter on quarter. The dynamic was supported by increased contribution of fees income as well as effective operating cost management, while keeping cost of risk under control in line with the guidance. Now, let’s see the gross operating profit, which reached EUR $535,000,000 in this quarter, increasing by 3% quarter on quarter.
It was driven by both revenues grow up by 1% quarter on quarter and lowering lower operating cost minus 1%. Revenue in the quarter crossed €1,000,000,000 again, almost practically confirming last year level. Yearly trend on gross operating profit was supported by resilient revenues, also thanks to the strong net fee income contribution, partly offsetting increased costs impacted by labor contract renewal and higher variable remuneration pool. Cost to income ratio has improved to 47% compared to 48% in the fourth quarter twenty twenty four. Moving to the next slide, where we are presenting some selected information on commercial performance.
The activity of our network is focused on key strategic areas and this delivering results in a very sustainable manner. With this slide, I would like to show just a couple of KPIs that are reflecting the outstanding performance of the business. Total commercial savings were €167,000,000,000 and increased by more than €5,000,000,000 year on year. Wealth management gross inflows crossed €4,500,000,000 in a quarter, up by 22% year on year. New retail mortgages granted in the first quarter reached €1,700,000,000 more than three times compared to one year ago, which is a confirmation of successful relaunch of the lending activity.
New consumer finance flows amounted to almost €340,000,000 with a 23% year on year dynamics. I would like to take this opportunity to thank our colleagues for this excellent results they have achieved. This is successful commercial banking. Now, let’s have a look to net interest income evolution. In the first quarter twenty twenty five, net interest income reached EUR $543,000,000 with both yearly and quarterly trends in line with the guidance given to the market.
The level of net interest income was affected by the decline in interest rate, only partially offset by effective management of cost of funding. Now looking at the volumes, let’s start with loans. We are reporting very strong net loans dynamic in the first quarter with the growing retail is miscomponent. Practically, are growing by EUR 1,600,000,000.0, which translated to 2.5% quarter on quarter with a positive trend also year on year. It has enabled us to increase market share since the beginning of the year.
Such a growth was possible, thanks to the acceleration of our commercial activity and this is a part of our strategy to mitigate the impact of decreasing rates on net interest trend. Now, commercial savings at the level of €167,000,000,000 they are up by €5,200,000,000 compared with the first quarter twenty twenty four. That means 3.2% higher year on year with growth recorded across all components. The quarterly trends was almost stable confirming the solid fund base and reflecting also a selected pricing approach towards the deposit. Also on the share deposit, we are gaining market share from the beginning of the year.
Now, with regard to our banking book securities portfolio, which includes assets classified at amortized cost and fair value to OCI, it stood at EUR 9,000,000,000, almost EUR 11,000,000,000 sorry, almost in line with the previous quarter. The fair value through CIs portfolio decreased quarter on quarter at €1 with duration further decreased to around one point six years and credit spread sensitivity down quarter on quarter to a marginal level of 200,000,000 The dynamic of the fair value through P and L portfolio increased quarter on quarter is related to our market making activity. Now, let’s move to fees and commission income. Total fees in the first quarter are in EUR 400,000,000, up by 8.9% year on year and 6.5% quarter on quarter. This growth was mainly driven by the strong performance of wealth management and advisory fees, which increased by 15% year on year and 21% quarter on quarter.
Again, thanks to the excellent commercial activity and reflecting strong focus on key strategic areas of our business plan. Commercial banking fees growing by 2.7% year on year with a quarterly dynamic reflecting typical year end seasonality effect. Regarding cost, in the first quarter, cost amounted to EUR $472,000,000, decreasing by 1% quarter on quarter, supported by continuous focus on non HR cost optimization and disciplined spending management process. The year on year increase plus 2.2% was mainly due to the impact of the renewal of the LIBOR contract, partially offset by the effect of strict cost and discipline in non HR cost and managerial expertise in this respect. Let’s move now to the asset quality slide.
As you can see, the gross NPE stock decreased in the quarter to €3,600,000,000 with secured component representing more than 17% of the total non performing exposure. Gross NPE ratio is down at 4.5% and net NPE ratio at 2.2%. We are not seeing particular signs of deterioration so far. And as you can see, the quality of our NPE remain under control. So that we expect to further improve our KPIs in the next quarter.
Also leveraging on the effects of our project, aiming at further improvement of our internal work out activity and put in place also some action in order to decrease the stock. We believe that at the end of the second quarter, we will show an additional reduction of this portfolio. Now, a few words on cost of risk and coverage. The cost of risk was at 46 basis points in the first quarter twenty twenty five versus 53 basis points in full year 2024. There is a decline and this is in line with the guidance for 2025.
NP coverage improved 49.5 and I believe that all these trends are in line with our strategy and reflect our conservative approach in managing risk. Liquidity, I think the soundness of our liquidity position was confirmed again in the quarter and encumbered contract balancing capacity stood at €32,000,000,000 ECB funding further decreased now accounting for 6% of total liabilities, down from 9% a year ago. Liquidity coverage at 156 level and net stable funding ratio at 130%. And this is a testament of the solidity of our funding structure. Now, let’s move on to the capital.
The common equity Tier one ratio we reported at a solid level on 18.6%, one of the highest in the European banking system. Factoring in starting this quarter, the positive effect of Basel IV, mainly on non operating risk weighted assets. This impact was somehow anticipated, but the positive effect was even higher than expected. I would like to remind that toll ratios include net profit of the first quarter twenty twenty five and are calculated net of dividend we assume 75% payout ratio on per tax profit. The Tier one ratio buffer remain at very high level of around eight ninety bps.
We have a super strong capital position and we continue to generate capital. So, let me go back to our transaction, which will give birth to a new major player in the Italian banking system. One that is highly dynamic, a leader in key specialized business and with a robust capital position. This is a new competitive force that aims to play an increasingly virtuous role in supporting families, businesses and local communities. I’d like to thank the CEO of Mediobanca, who this morning spent time to suggest what is the best for Monte Paschi.
And I would like to say that we are already awake and we like to challenge ourselves with innovative transformational deal, which for sure require vision, skills and execution capability. The offer is progressing at pace and in line with the announced timeline, supervisory authorities authorization and antitrust authorization are expected by June at the July. Followed by approval of the exchange offer documents and start of exchange offer period. On April 17, the capital increase was approved by Monte Paschi shareholders with more than 86% of the represented capital voting in favor, demonstrating significant support by full spectrum of our shareholders. And our offer represents an unparalleled financial proposition for all shareholders.
The transaction is expected to generate annual pretax synergies of approximately 700,000,000 along with deferred tax asset benefits of around $400,000,000 per year over the next six years. It is projected to deliver double digit accretion and adjusted earnings per share on adjusted earnings per share and a strong organic capital generation, supporting a potential dividend payout ratio of up to 100% without impacting capital levels. The combined entity is projected to have a pro form a share to one ratio of over 16% with a significant excess of capital at our disposal. We believe our offer represents fair value based on Mediobanca fundamental and historical performance. And what is important to underline that is our offer provides immediate and certain value for Mediobanca shareholders.
I’m just repeating in order to be very clear, immediate and certain value for Mediobanca shareholders. We did not suddenly wake up one day to discover that 40% of our balance sheet was in the hands of another management team in a completely different sector than our own area of expertise. The proposed combination is focused on creating stronger, more capital generative business in the markets where we compete. It is not about power games or control of another firm. It is about the bottom line, plain and simple.
Meantime, the financial benefits of exchanging offer on Banca Generali for Mediobanca shareholder are less evident. What is certain that the operation consumes capital, 80 bps says Mediobanca. According to some analysts, the capital erosion is estimated even about 100 bps. That means more limited room for capital distribution. At the first glance, the transaction appears to be neutral, if not negative for earnings per share, even when considering Mediobanca estimated synergies with Banca Generali.
Dividend per share making it complicated to understand where the transaction is accretive to shareholders in terms of dividend distribution. There is also no mention of the potential negative impact of canceling the Banca Generali brand. So financial benefits of the Mediobanca Generali deal are not evident in any case. And our offer on the contrary delivers a significantly better financial proposition for Mediobanca shareholders. Among unclear key issues, there is also no mention of the economics of the announced long term strategic partnership agreement in the Bancassurance and Asset Management business, especially in comparison with the recent agreement signed on April 17 between Banca Generali and the Securizione Generali.
The envisaged transaction include also several areas of attention, which make the deal uncertain at this stage. Finally, objectively, Mediobanca doesn’t have a track record in successfully integrating a business of this scale. Banca Genghali is not an investment banking boutique. So, let me now conclude by recapping the key messages. We are moving ahead of our target, thanks to our strong and resilient business model and the extraordinary diligence of our colleagues across the bank.
We deliver strong economic and commercial performance, net profit plus 24 year on year, resilient revenue supported by significant fee growth plus 8.9% year on year and acceleration of the lending business, new retail mortgage in first quarter ’3 times versus first quarter last year. New consumer loan flows up by 23% year on year. Cost of risk reduction in line with guidance. Capital ratio at the top of the banking sector with 18.6% core Tier one fully loaded ratio. On the back of the positive first quarter dynamic, 25 profit before tax expected to be higher year on year with further room to grow in 2026 beyond our business plan.
Our vision on banking industry, and this is the creation of the new powerful competitive force to better serve families, large company, small and medium business and the local communities. ContePasca intends to play a leading role in this intense and necessary phase of consolidation in the Italian market. The time has come to change the approach to banking for the good of all stakeholders, starting with clients. We will expand distribution channels and reach the offering of products and services to our customer, open new market segment and accelerate investment in technology. All of these requires scale.
The shareholders who supported Monte Paschi turnaround, no. And the all shareholder, I believe, no. That we didn’t just wake up to the idea that our capital must be actively allocated. It is the lifeblood of our business. We are grateful for their support and we will not let them down in the future.
The business combination of Monte Paschi and Mediobanca puts us in a leading position to accelerate towards what we expect would be the most important phase of consolidation of our industry. Thank you very much and we are ready to answer to your question.
Conference Operator, Chorus Call: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. First question is from Ignacio Ulargui, BNP Paribas Exane. I
Ignacio Ulargui, Analyst, BNP Paribas Exane: have two questions, if I may. The first one, it’s on the strong commercial performance in 1Q, which was quite solid. How should we think about growth going forward? How I mean, do you think that there is still more potential of growth coming both on lending and on the especially on the deposits and asset management side? And also wanted was curious about how the margins on this new production has been compared to the back book, whether you are finding it profitably the growth?
The second question I mean, what is the rationale to have such a strong capital buffer? And could you consider to distribute more to shareholders? Just one clarification, if I may. On the CET1 ratio pro form a, shouldn’t we expect the translation of the increase in capital in the quarter to translate to the combined Mediobanca, Montevi Paschi of 16 being above 17?
Thank you.
Luigi Lovallo, Chief Executive Officer, MPS Group: So thank you. I will address the first question, all right. So last year, we plan to reinforce our commercial structure, appointing a new Deputy General Manager in charge to the business, new Head of Retail, new Head of Corporate. So the idea was really to give a boost to our capability to grow on the commercial activity. And I believe that already starting from the second part of last year, we saw significant improvement in all dimension of what is the commercial activity.
So first quarter is a confirmation. We are quite confident that we can keep this pace because it’s just not a matter of higher performance, right? But these are just a combination of all the action we put in place, organization, people, products, and the same time also new tools that will help to be more effective commercial activity using also some technology that is supporting us in better defined customer profile. Clearly, have to match and to combine in the best way the trading between the price that we are offering for attracting new business and our profitability, right? But we strongly believe that we have such a penetration on our territories that the customer will follow us in dealing with our bank and this sort of loyalties that has been proved through the years will help us in growing in terms of volumes with a good trade off between price and volumes.
So I believe we can keep the margin and we can keep growing. And this is a confirmation I was mentioned. This is what I was saying is confirmed by those are the trend in market share. At least this is what we plan up to the end of this year. Clearly, with some seasonal fluctuation that it will come on the third quarter, but also second quarter, we believe will be quite successful.
So, the rationale on capital buffer, right? The rationale is that in this position we can really afford to follow our project combining and joining efforts with Mediobanca. And as I was mentioning, to be in the position to have an active role in the second phase of consolidation. The excess of capital will help us to be stronger from a national point of view and I believe can give an additional option to be even more generous with our shareholders in terms of remuneration. As we were mentioning, the combined entity will have the benefit of a capital this above 16%.
And despite the 100% payout ratio, we will keep growing in capital. So this is an important difference that I believe investors are appreciating because we can ensure sustainability of the remuneration of our shareholder for the next five years, while keeping higher capital for additional benefit that can come, as I said, industrially and financially for our shareholders. It’s just not a matter of projection of one year or two years. And it’s not just a matter to decrease the capital to the level from 14% to 15% or 12%. We are confirming a strong level of capital for the benefit of all our shareholders.
And we will try to optimize in the best way we can once the transaction will be completed. Now Andre, if you want to add.
Andre, CFO/Finance Executive, MPS Group: Yes. Good morning to everybody. Ciao or Nacho. On your last question, as we said, the cap this CET1 ratio following the transaction pro form a at 30% to 74% would be 16.2%. And as the CEO has just said, we can keep, let’s say, the capital stable over time while distributing 100% dividends.
So on the Basel IV impact, it is partially factoring in our projections because as you might remember, we gave a guidance €2,000,000,000 RWA reduction. And now the impact is more positive. It is more about €3,000,000,000 in terms of RWA reduction. The delta, yes, can be translated in terms of higher capital for the combined entity.
Ignacio Ulargui, Analyst, BNP Paribas Exane: Thank you very much.
Conference Operator, Chorus Call: The next question is from Giovanni Razzoli, Deutsche Bank. Please go ahead.
Luigi Lovallo, Chief Executive Officer, MPS Group: Good morning to everybody. Two questions. One again on the very, very strong CET1 ratio on a stand alone basis, which I expect to grow further in the next couple of quarters. So you would be in the condition to approach 20% sooner, is my understanding correct? Do you see growing the volumes on some headwinds, which may prevent this trajectory?
And the second question on the Mediobanca and Banca Generali transaction, are there any read across between the outcome of the Mediobanca General Meeting, which has been called to approve the offer on Banca Generali and your offer? Thank you.
Andre, CFO/Finance Executive, MPS Group: So on let’s say, your first question about steep capital projections, no, I just remember just remind, sorry, what we gave as guidance, I. E, that as mentioned many times, we will have the impact of the date of the internal models by year end 2025, which the impact of which is about is around 809 hundred million euros RWAs and the FRTP impact potentially next year or maybe the year after or maybe never, then it depends on what the regulation will be, which is currently estimated in 400,000,000. While we have, for sure, factoring in our projections, the sustained loan dynamics that we are successfully experiencing.
Luigi Lovallo, Chief Executive Officer, MPS Group: So Giovanni, thank you for your question. So the answer is quite simple. My I’m fully convinced that investor that will vote for the Mediobanca transaction to the next general meeting shareholder will deliver the shares to us because, as I said, the two transactions are not alternatives. And I believe this is what looking at the financial and economics and the benefit that investor already started understanding by approving our increase of capital, the general meeting shareholders, there will be a sort of consistent behavior, right? At any case, we will start again our contacts with our investors to be sure that our transaction would be successful.
But any case, I don’t see any negative or completing situation by voting for General Meeting, Shareholder, Mediobanca and delivering the share. This is what I believe will be the common behavior of investors. Thank you.
Conference Operator, Chorus Call: The next question is from Luis Pratas, Autonomous. My
Luis Pratas, Analyst, Autonomous: first one is as well on the Mediobanca, Banco Generali offer. I wanted to understand better your strategic flexibility. In this scenario that Mediobanca shareholders approved the Banca Generali offer and you gained control of Mediobanca afterwards, can you actually stop the Banca Generali offer if you want to? And related to this, as you calculated the incremental capital impact of doing the Banca Generali transaction under the same terms offered by Mediobanca in case, once again, you gain control of Mediobanca afterwards? And then more about your business plan.
Fees accelerated this quarter. Year on year growth was around 7% ahead of the business plan run rate. How do you expect this line to evolve in the rest of 2025? Thank you.
Luigi Lovallo, Chief Executive Officer, MPS Group: Okay, thank you. Thank you for the question. So about the first question, as I mentioned, the financial terms timetable and the offer condition to which Banca Generali offer is subject are absolutely still unclear. Therefore, it’s very difficult to make an assessment on this transaction overall at this point of time.
Andre, CFO/Finance Executive, MPS Group: Excuse me, Luis. Can you repeat the second question, please?
Luis Pratas, Analyst, Autonomous: The second question is on fees. If basically it’s regarding the guidance of 2025, if could give your expectations for the rest of the year since it started very well in Q1.
Luigi Lovallo, Chief Executive Officer, MPS Group: So, as I mentioned, this quarter was an excellent performance. And in our understanding, I think it’s something that in some way can be more or less repeated, as I said, with some seasonality in the third quarter. So overall, we still believe that for the full year, we can almost keep the pace more or less of the first quarter. So even slightly above the guidance we gave at the beginning of the year.
Luis Pratas, Analyst, Autonomous: Okay. Thank you. And maybe can I just do a quick follow-up on the full year guidance? I wanted to confirm if the full year guidance of 2025 is still to achieve a pretax profit of at least in line with 2024, so the EUR 1,400,000,000.0? Or are you in a can you actually even be above this level?
Thank you.
Luigi Lovallo, Chief Executive Officer, MPS Group: No, no. I think I was mentioning during the presentation. We gave a guideline last time not to be lower. This time, we’re saying will be higher. And this will create a base to have also an IR 2026.
Definitely better than what has been what was planned.
Luis Pratas, Analyst, Autonomous: Sounds good. Thank you.
Conference Operator, Chorus Call: The next question is from Andrea Lisi, Equita. Please go ahead.
Andrea Lisi, Analyst, Equita: Hi to everybody. Thank you for taking my questions. The first one is on the evolution of the commercial dynamics in terms of inflows direct collection that you have observed in April? And which trend do you expect going on? And if you can provide us a detail regarding the investment fees on the contribution of any upfront or performance fees that contributed to total investment fees in the first quarter.
The second question is on the NII. In particular, if you confirm the sensitivity you have provided previously. And which trend of volumes in terms of loan evolution are do you expect also regarding the the current scenario and the feeling you have regarding how your clients are approaching for new lending? And if 02/1926 n I NII, given the current the current curve, is seen above or below the 02/2025 levels. Then just a clarification regarding that the your offer on on Mediobanca, in particular, regarding the success the success threshold of 67%.
That is a threshold that can be can be waived. Do you have any detail regarding a potential minimum threshold condition or you’re just still committed to stay above 67% and so on?
Luigi Lovallo, Chief Executive Officer, MPS Group: Okay. So as I was mentioning, right, saying that we expect to keep the pace of the first quarter, it’s clear that I based my assumption on the fact that already April is getting good signals in terms of inflow into wealth management products. So positive on that. I think we were mentioning also last time, we have a standard almost percentage of upfront fee on total asset management fees, more or less is between 35%, forty %. Are not having our portfolio significant portion of product where performance fee is foreseen.
So practically, there is no particular one off in the total fees that we have because practically the product majority of our products without performance fee. I believe our net interest income will give the floor to Andrea.
Andre, CFO/Finance Executive, MPS Group: Yes. The sensitivity is generally stable. The current sensitivity for minus 100 bps, but the shift of the curve is slight is in the neighborhood of minus €150,000,000 slightly less actually. Then for 2026, given, let’s say, the resilience of our NII, the positive loan dynamics and also the long end of the curve being a bit higher than expected, actually, we expect an NII, which is stable or increasing compared to ’25. And this is supported also, again, by loan dynamics that we expected to be above market.
Luigi Lovallo, Chief Executive Officer, MPS Group: As you were mentioning, our offer is for 67% of the shares. And we are confident about our target. So we are not making any thoughts on a different level up to now.
Andrea Lisi, Analyst, Equita: Thank you.
Conference Operator, Chorus Call: The next question is from Hugo Cruz, KBW. Please go ahead.
Luigi Lovallo, Chief Executive Officer, MPS Group: Hi. Can you hear me? Sorry. Hi. Can you hear me?
Luis Pratas, Analyst, Autonomous: Yes.
Luigi Lovallo, Chief Executive Officer, MPS Group: Thank you. Thanks for the time. I wanted to ask about your M and A strategy. It sounds to me from what you said that if you succeed with Mediobanca, you won’t stop there and you want to pursue the next stage of consolidation. So I wanted to understand what that means exactly.
Do you think there could be further Do you see yourself as a buyer or as a target in that second round? How concentrated do you think the Italian market could end up being in say five years time? Thank you. So, I think I was mentioning also in previous presentation, believe that still we needed to further have a process of consolidation in Italy and probably should be a consolidation that should be a bit innovative. That’s why I think the second wave will start in the coming two years from now probably.
And I believe, given our capital position, know how in integration, the strength of our network because whatever is the consolidation, you need to have a strong franchise, the strength of our brands, the quality of the people. We believe that we can be an important player in this environment, right, of further consolidation. And the capital position that we have will give also, according to me, a competitive advantage in order to look for the best solution for all our stakeholders and to ensure a sustainable remuneration to our shareholders. Thank you very much.
Conference Operator, Chorus Call: There are no more questions registered at this time. I turn the conference back to Mr. Lovalho for any closing remarks.
Luigi Lovallo, Chief Executive Officer, MPS Group: No, thank you very much for this opportunity. And we are going to see for the next presentation that is expected to be August or hopefully earlier. Thank you very much.
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