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Operator: Good day, and thank you for standing by. Welcome to the Banca Mediolanum 9 Month 2025 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Alessandra Lanzone, Head of Investor Relations. Please go ahead, madam.
Alessandra Lanzone: Hello, everyone. It's a pleasure to meet with you again. As you've seen with a strong third quarter behind us, our 9-month picture is in good shape. And today, we are going to take a closer look to our results. What's powering them and how we see the road ahead. Just a quick note before we start. You're welcome to ask a question at the end of the presentation in the language of the line you're calling from. We will answer in Italian as usual, with a real-time English translation. With that, I'm pleased to turn the floor to our CEO, Massimo Doris, who is joined by our CFO, Angelo Lietti. Massimo, over to you.
Massimo Doris: Thank you, Alessandra, and good afternoon, everyone, and thanks for joining us. Let's start with the context. 9 months in inflation in Europe returned to around 2%. Interest rates remain restrictive. Equity markets advanced unevenly, bond yields were volatile, currencies were choppy and geopolitics remained a persistent headwind. In this kind of environment, discipline matters and steady execution is rewarded, and that's where we stayed focused. We plan for this noise and kept on doing the fundamentals as well, prioritizing our proven trademark levers over one-off moves or tactics. And this discipline come through in our 9-month number. From earnings to revenue, the trend is up. Net income up 8%, operating margin expanding 5% and an 11% lift in the net commission income. We also reached 2 record milestones that we are proud of. Over EUR 150 billion in assets and more than 2 million customers. Another strong year is shaping up. Our 9-month performance reflects preparation and a simple aim to provide our customers with the same dependable, hassle-free service, we never fail to deliver. Two points stand out. First, we delivered strong overall net inflows underpinned by a 21% year-on-year surge in managed asset inflows. This supports healthier recurring fees and also strengthens customer relationships. Our Family Bankers continue to convert customer engagement into advised investment solutions, enhancing quality as much as quantity, increasing share of wallet and improving retention. Second, our revenue mix proved well balanced. As the interest rate tailwinds softened as anticipated, recurring fee income increased markedly, thanks to higher average managed assets more than compensating for lower NII, while protection policies and credit volumes picked up year-on-year. Below the line, we stayed disciplined on costs while investing in growth levers that matter namely technology, network quality and the customer experience. Capital and liquidity remain robust well above regulatory thresholds, giving us the flexibility to keep investing in our business in all market environments while delivering attractive and rising shareholder returns. Our business in Spain is progressing in line with plan and in breadth without distracting from our core Italian focus. As we enter the final quarter, our priorities are clear. Keep leading inflows with a managed asset bias, protect profitability through revenue mix and discipline, sustained high-quality customer acquisition as well as network growth and execute with the same level of rigor that has driven quarter-by-quarter improvement in operating margin this year. Let's walk through the 9-month details. First up, economic and financial highlights on Slide #4. Let me start with the headline number. Net income came in at EUR 726 million, 8% ahead of last year, mainly thanks, as we said, to a material recurring fee growth driven by strong inflows into managed assets. Our core business set a higher bar -- high bar. Contribution margin surpassed EUR 1.56 billion, and operating margin EUR 891 million, both advancing by 5% year-on-year. We solidly outperformed the interest rate headwind. Net interest income fell 5% to EUR 582 million. Yet, our results came in stronger. Q3 added significant value year-on-year. We anticipated that net interest income would narrow the gap versus last year, and it is now moving toward our full year guidance for 2025, which we have further revised to end up closer to the result of 2024. Our working view is that 3-month Euribor averages 2.17% in 2025, notably lower than the 3.64% average in '24. The impact, however, is partially offset by a more favorable volume mix, supported by increasing liquidity from customer deposits. And looking ahead, 2026 points to a higher net interest income. Importantly, while our commercial initiatives put near-term pressure on NII, they fuel growth in net commission income, which at the 9-month point, climbed 11% to some EUR 967 million. Every component of gross commission income posted strong gains. As expected, recurring fees contributed the largest share. In fact, combined management and investment management fees, rose to over EUR 1.24 billion, marking a solid 10% rise over the same period last year. This expansion was underpinned by record net inflows into managed assets, which lifted average assets by EUR 13 billion year-on-year. This came despite market volatility and a weaker U.S. dollar weighing on Q2. However, Q3 saw a supportive market backdrop. In fact, as you can see Slide #9, there was a solid uplift in Q3, 7% higher than Q2, benefiting from constructing markets as well as strong flows. So volumes boosted the recurring fee income. At the same time, a somewhat different mix favoring fixed income funds, together with the increasing equity-oriented inflows via Intelligent Investment Strategy, which begins in lower fee money market funds compressed the average recurring fee from 212 to 202 basis points year-on-year, in line with our expectations. Let's now focus on the key ratios across the first 9 months. The cost income ratio came in at 37.2%, edging lower versus H1, as could be expected given the cost seasonality. There is also a cost efficiency component that should support year-end, and we can now confirm we finish out 2025 below 40% as per our cost/income guidance. Acquisition costs measured against gross commission income held steady quarter after quarter, ending the 9-month period at 34.3%. Finally, the cost of risk annualized on a 12-month rolling basis stood at 15 basis points, and we expected it to normalize toward around 20 basis points by year-end consistent with our guidance. Slide 8 provides more detail on the other income statement lines, and let me flag a few. Banking service fees climbed 29% to nearly EUR 182 million on the back of strong certificate sales, especially in Q2 with some follow-through in Q3. As you know, certificate fees are booked upfront in the P&L. Net income on other investments was EUR 23.5 million, up 29% year-on-year, reflecting a larger Q2 Mediobanca dividend and higher valuations on our treasury portfolio after Italy's rating upgrade. The 50% increase in provisions for risk and charges reflect the same dynamics we saw in H1. On risk provisions, last year's favorable legal resolutions led to one-off partial releases that were not present this year. For network indemnities, the increase remains volume driven, higher commissions naturally require higher provision. Fair value showed a significant improvement to EUR 23.4 million from EUR 10.3 million last year. The stake in Nexi was fully disposed of in Q2 leading to a substantial uplift from the negative mark recorded in the same period last year. We also saw a positive contribution from treasury trading activity. Let's turn to Slide 5. For a brief look at the business results in the first 9 months. Commercial activity was strong, lifting total net inflows by 14% to EUR 8.16 billion, supported in large part by the success of our time deposit campaigns. Notably, inflows came from both new and existing customers, underscoring the effectiveness of our marketing and acquisition engines. The clear standout, however, was managed assets, which flows of EUR 6.58 billion, up 21% year-on-year. And with October now in the year-to-date figure stands at EUR 7.3 billion. We are firmly on track to reach our EUR 8 billion to EUR 8.5 billion guidance in managed asset inflows, topping the EUR 7.6 billion record from 2024. As shown on Slide 34, for the first 9 months of 2025, we again topped accelerating in managed asset net inflows, extending a 4-year leadership streak. And even with the updated classification, which also includes the lower margin segment of administered assets with fee over or fee-only pricing models, we came in second place, only a touch behind Fideuram. Let's now refer back to Slide #5. As we said at the beginning, we crossed the EUR 150 billion milestone in total assets, ending September at EUR 150.4 billion, 9% above year-end. The credit book also posted growth, reaching EUR 18.44 billion, with asset quality remaining solid, as shown by an NPL ratio of 0.78%. And this was thanks to loans granted, which increased 37% year-on-year, totaling EUR 2.79 billion. Gains were also solid in General insurance gross premiums up 23% to EUR 114 million, driven by stand-alone policies, but even more so, by a renewed uptake in loan protection policies in line with mortgage expansion. Turning to Slide 6. We crossed the 2 million customer milestone, adding 147,700 new customers and lifting the base up 4% at the end of September. Our Family Banker network at the group level expanded in step, also up 4% to 6,682. As we noted earlier, Intelligent Investment Strategy gained clear momentum, about EUR 4.4 billion is currently parked in money market funds set to transition into equities over an average of 3.5 years. Since the beginning of the year, EUR 1.5 billion has been added, rising a material 43%. Another EUR 2.9 billion is slated to move into mutual funds over the next 12 months, as shown on the last 2 lines of Slide 6, including some EUR 800 million from Double Chance deposits and over EUR 2 billion from installment plans flows, which continue to build steadily. Our trademark model keeps proving its value. It bears customer convenience with long-term consistency for the bank, supporting recurring fees and strengthening the durability of our revenue base. Let's move on to another key pillar of our model. Balance sheet ratios shown on Slide 7. Nothing dramatic here and by design. Capital strength is one of our defining advantages and a cornerstone of your long-term confidence in Banca Mediolanum. For the first 9 months, the full set of capital ratios reinforce an already robust balance sheet, comfortably exceeding regulatory thresholds and sector averages. Our CET1 ratio moved up to 23.2%. The exit from the stake in Mediobanca is now fully incorporated, contributing slightly above 1 percentage point. In light of this, the Board of Directors has resolved to pay a more generous interim dividend this year, namely EUR 0.60 per share, which indeed factors in this one-off benefit from the Mediobanca sale we executed in July. The interim dividend will be paid November 26 and corresponds to a total of EUR 443.5 million. Let's take a moment to focus on our Family Banker network in Italy, which crossed the 5,000 mark, reaching 5,046 financial advisers in the first 9 months. Since January, 245 new colleagues have joined us, many with prior experience as branch managers or customer relationship managers in other sectors. We also welcome a strong pool of young talent through the project NEXT, our key growth lever to shape the network of the future, ensuring generational continuity as well as enhancing the productivity and profitability of our senior bankers. Our banking consultants are top graduates who begin with a 6-month executive master at our Corporate University, finishing with the FA certification, then go straight to hands on work alongside the senior Private Banker or Wealth Advisor with the remuneration covered by the senior. The numbers in Slide 37, reflect the success of the project. As of today, 556 Banker Consultants are already active in the network with an additional 207 currently in training. We expect to overcome 800 by the end of 2026. This strategic project is already paying off. For the almost 700 senior bankers supported by a Banker Consultant for at least 12 months, productivity has stepped up materially. These were already ahead of their peer group, and now the gap has widened sharply. The advantage in managed asset inflows has increased 6x from plus 7% to plus 43%. About 1.5x in loans from plus 28% to plus 42% and almost doubling in protection policies from 29% to plus 54% and again, almost doubling in terms of customer acquisition from plus 41% to plus 80%. We are more or less satisfied with the progress so far and confident about what comes next. Our network is set to keep growing faster, and we see clear upside in productivity. With that in mind, let's turn to Slide #30, which tracks the last 5 years of productivity in terms of average assets per banker for the 1,000 Private Bankers and Wealth Adviser who make up the top tier of our network. As you can see, at EUR 64.2 million average asset per banker we are already almost double the industry average [indiscernible], which is EUR 34 million. This gap has expanded in recent years. underscoring our strong commitment to the network quality as well as higher recurring revenues per banker. A productivity edge that thanks to our dedicated efforts, we expect will keep trending higher. Now let's turn our attention to Spain by commenting on Slide #32. Given Spain's impressive step-up in volumes we chose to double down on acceleration to achieve a real step change in scale. This resulted in higher level of costs, mainly linked to a scaling up of our platform, increased activity all over the country and incremental marketing spending. Therefore, the effect on the P&L reflects a cautious investment choice and aimed at supporting growth and building long-term value. It's also worth noting that net interest income dropped by 24% compared to the same period last year. And given the significantly smaller scale of our operation in Spain, the increase in net commission income there was not sufficient to offset the gap. Operating margin reached EUR 44.5 million, reflecting a 32% decrease compared to 9 months last year, mainly due to the factors we just mentioned. Net income stood at EUR 38.9 million, 28% lower year-on-year. Total assets grew by 14% since the start of the year, reaching EUR 14.8 billion, with managed assets rising 15% to nearly EUR 11.2 billion over the same period. Net inflows stood out once again totaling EUR 1.54 billion, 68% higher than last year. Managed asset inflows contributed EUR 1.37 billion, an impressive 45% increase. On the lending side, the credit book expanded further, reaching EUR 1.67 billion, an 11% increase versus year-end. Meanwhile, the number of Family Bankers is down by 1% to a total of 1,629. But what matters here is the material increase in productivity in the past 5 years. Just like the domestic market, average assets in their portfolio went from EUR 5.5 million in 2020 to over 9 million today. Finally, our customer base in Spain has grown to 270,750 marking a strong 6% increase since the beginning of the year. In closing, let me first recap our guidance for 2025. Net inflows into managed assets at around EUR 8.5 billion. For 2026, volumes are expected to remain similarly strong, assuming normal market conditions. Net interest income, down some 1% compared to 2024, and based on current yield curves, we project an increase in 2026. Cost-income ratio of below 40% and cost of risk around 20 basis points. Dividend per share to increase compared to the previous year, of course, subject to shareholders' meeting approval, this dividend talking about 2025, of course. Looking ahead, analysts broadly point to a strong net inflows into managed assets, resilient recurring fees and solid operating and commercial momentum into Q4. And I couldn't agree more. As we wrap up, I'd like to confirm that our recurring business engine is tracking last year's peak run rate, which reinforces our positive outlook for the year ahead. Our priorities continue to be growing the network and enhancing the productivity of our Family Bankers, delivering sustained net inflows into managed assets, expanding the customer base, building durability in any context through consistent execution, sharing the value we create with our shareholders through dependable dividends. 43 years on, we continue to create value in the same way, a consistent model, a clear strategy and a real delivery built on a long-term vision our ownership-oriented people and daily customer trust. Thank you for your attention, and Alessandra over to you.
Alessandra Lanzone: Thank you, Massimo. We can now open the question-and-answer session. Please try to limit a couple of questions each at the beginning. And then if we have time, we can continue, that is for sure. Thank you very much.
Operator: [Operator Instructions] Question from Luigi De Bellis, Equita SIM.
Luigi De Bellis: [Interpreted] I have 2 questions. The first one is net inflows. It is really impressive between EUR 8 billion and EUR 8.5 billion and you expect a solid trend in 2026 as well. What are the main reasons why you think inflows will be robust in the year to come as well? Do you see any special opportunities due to the inflows mix in terms of transition from administered assets into managed assets and so on and so forth, network? You have increased the total sales network by over 100 professional. What's the expected trend? Can you provide some update, some color as far as the Wealth Managers and Private Bankers network is concerned, also in terms of the assets they manage.
Massimo Doris: [Interpreted] Thank you. So net inflows into managed assets. Well, we -- why do we expect 8.5 billion inflows next year as well? Well, provided market are normal. This is what we expect, should bear market materialize, should market collect by 20% or 30%, it will not be possible to report EUR 8 billion to EUR 8.5 billion net inflows into managed assets because when the market crashes, it's more difficult to grow. But it's also true that in that type of market, we make the difference because, of course, we report fewer inflows, but the others do report much, much lower inflows. So we nonetheless can broaden our market share. So if markets say, behave, we believe we can once again generate to EUR 8 billion to EUR 8.5 billion into in terms of net inflows into managed assets plus the network is growing. So I think that inflows should be growing as well because points of sale [indiscernible] are increasing, the demand for advice is increasing. So I really think that we have laid all the necessary groundwork to keep growing. Also, we are in November, and we are providing a range of EUR 8 billion to EUR 8.5 billion in terms of -- in terms of inflows into managed assets, you have to consider that this net inflows include certificates. These certificates do have an auto-callable option. Certificates normally track S&P or [ FTSE ] Indexes. So if a year later, the 2 indices are above the initial strike price, the certificate would pay out a significant coupon and repay principle. If either one is below the threshold, no coupon is distributed and the following year, you go in check again and see whether you are above or below the expected level. If it's above, you pay the coupon for that year and you recover the previous year coupon as well. These difficulties closed, so to speak, and you return the principle to clients. We have about 400 million certificates which we sold between November and December last year, which actually are part of net managed assets, and they are above -- they have reached maturity. Both indices are above the initial strike price. So potentially, they may return in a principle to customers. So the money may be transferred from the certificate, which is managed assets into deposits, which is administered inflows. Being November and December, the network simply doesn't have time to transition the money from administered to managed assets, and by the way, the transition is justified by a beautiful reason. That's to say the certificate performed very well. But that being year-end, would cause a gap of about 400 million between administered and managed -- better said, in managed assets for that reason because there is no time essentially to fill that gap. As far as the network is concerned, well, the sales network recruitment policy will continue. We'll continue recruiting new bankers, 20% of them, they have a significant portfolio already, a significant amount of assets under their management. Another 20% of them are more junior professionals. So they are not bringing a lot of assets with them. And then we have people whose background is in insurance and others that come from different areas. And then we have banking consultants. So I really have to say that clients do appreciate and they continue to express their appreciation for advisory in general. There is a recent market research by Prometeia, according to which a sales network used to manage just 9% of Italy's assets and they are up now to 20%. Traditional banks used to manage over 70% of Italian wealth, and they went down to 60%. So you see the advisory model is really meeting a specific need on the part of clients. As far as both Private Bankers and Wealth Advisers are concerned, we have about 1,000, putting them together. There is a significant trend that is steadily going up. I believe that the average advisers, our portfolio will keep increasing. The number of people probably will slow down in terms of growth, not because we will hire less, but because every couple of years, we will kind of raise the bar and it will be increasingly difficult to pass to the upper tiers and become either a Private Banker or a Wealth Adviser. As you can see, in 2029, 2020, we saw a decline in the number of Private Bankers and Wealth Advisers simply because the bar was set to a higher level that point. So those people who could not comply with the new requirement fell off that category. Then they came back in, in 2021, where you can see that significant jump forward. Private Bankers have an average of 51 million assets in their portfolio, in 5 years we'll have fewer Private Bankers, but with a bigger average portfolio. So the total will be higher in terms of assets, but lower in terms of number of professionals. We are sticking it all on quality. We want them to be qualified, highly professional bankers managing increasingly larger portfolios.
Operator: Next question, Enrico Bolzoni, JPMorgan.
Enrico Bolzoni: [Interpreted] Good afternoon. First question, I would like a clarification on management fee margins. Clearly, this year market have moved a lot. And can you confirm that taking into consideration the daily average assets and that the margins have started to increase in the third quarter compared to the second quarter. At the beginning of the year, they were higher, clearly. But do you think that should markets remain stable we might continue to see an increase in management fee margins in the coming quarters. Second question, can you give us an update on performance fees that haven't crystallized yet, but which might do so by the end of the year as compared to the water -- the high water mark.
Massimo Doris: [Interpreted] Let me start with the second question first. EUR 150 million roughly are the performance fees we may potentially collect right now. Talking about management fee margins, recurring management fees and investment management fee margins, between the second and the third quarter, they were unchanged. What is actually affecting this fully expected decline in margins? Mainly one thing that is the behavior of the sales network. I already hinted this at the call when we published the first half result. The reason remains the same. In the last 2 years, and this year is no exception, 100% of net inflows into managed assets that flowed into funds flowed into bond funds. So 100% in bond funds, then equity funds raised slightly, grew slightly, but the worst was for flexible and balanced fund. But let's say that 100% of flows went into bond funds. Bond funds have a lower management fee compared to equity funds. And therefore, of course, you see this decline. In addition, there was a EUR 1.5 billion increase in money market funds linked to the Intelligent Investment Strategy where the management fee is 20 basis points. So 1.0 billion more means that average fees are strongly impacted. Should we worry? Of course, not. Equity markets are tight. At a certain point, they will correct. If we take a look at the past during 0 net interest rates, 100% of our flows were into equity funds and our clients had increased this portion a lot, then bond funds are back to being interesting, thanks to the increase in interest rates. And finally, they can be a good solution for midterm needs for our clients. And then this is also an asset class that may certainly level of risk since equity markets are so tight. In the last 2 years, net inflows into managed assets were really skewed towards bond funds, which means that now clients have a better balanced mix. When markets will correct, our clients will be much more at ease, and they will then be able to flow once again and to invest once again in equity markets where prices will be much more interesting. So these 202 basis points could certainly decline, especially if our Intelligent Investment Strategy is going to grow further. When markets are going to move down, we already experienced this back in 2023. Just as back then, there is going to be an acceleration in the transfer of flows from money market to equity fund. So we go from 20 basis points to 250 basis points in terms of recurring management fees, with an increase in average fees. In 2022, there was a strong decline. And then there was a very sharp acceleration. You see this -- the light blue bars above 2022 are the step-ins where the installment would be doubled or tripled and would flow into equity funds. So the average fee at that point would really report a sharp increase because, as I said, a couple of billion, if I remember well, were transferred for money market funds with a 20 basis point fee to equity funds, featuring a 250 basis point fee. So we have to just get used to this sort of volatility of the average fee and the average fee margin. Having said this, I've repeated this quite often. I believe that margins will dip slightly really a matter of a few percentage points because of our clients' mix. Since we are acquiring wealthier and wealthier clients, of course, not only Wealth Clients also younger clients that are not so rich, but also wealthy clients would not invest 70% in equity markets. 40-year-old and 70-year-old clients, the risk being the same would, in any case, show different investment mix especially if the 70-year-old has millions of -- in assets and the 40-year-old has EUR 100,000 in assets. So if the high or ultra-high net worth individuals have a more -- a higher bond investment share. This will mean that the average fee margin is going to be slightly lower, but I believe that it's not going to go much below 200 basis points. I don't foresee our average fee margin to go below the 195 basis points. Right now, they are at 202, but they could go up to 207, 208 basis points because if the markets go down, there will be an increase in equity investments with all the consequences I've already described.
Operator: The next question is from Elena Perini, Intesa Sanpaolo.
Elena Perini: [Interpreted] I do have 2 questions. The first one is on NII and the new more optimistic guidance you provided. I'm not sure whether you have already covered this topic because I had to disconnect briefly, but I'd like to know what are the main drivers underpinning your new guidance? Then I have a more technical question in nature concerning taxation because you were the one that promoted an action at the European Supreme Court that resulted in the judgment on the regional production tax that has an impact on dividends. Could you share some numbers with us in the light of the budget law and how much you could be reimbursed refunded or in negative terms what kind of impact would a 2 percentage point increase in regional production tax would have on your results?
Massimo Doris: [Interpreted] Okay. So NII, at the start of the year, our guidance was minus 5%, and now we are saying minus 1%. What happened in between? Well, the main reason is that actual data point to about EUR 1 billion more on current accounts that pay 0 fees. So it generates no income. And of course, EUR 1 billion more that you collected no cost made us go from minus 5% to minus 1%. In 2026, the outlook for NII is an increase. I mean we expect NII to go up, but always assuming the yield curve is the same as today. Should the curve change, our outlook will change, too. But considering today's forward curve, this is what we expected because there are certain fixed rate securities that are about to mature, say, BTPs bonds that would yield 0.2%, 0.3%, 0.4% that are reaching maturity and be replaced by other BTPs that have a much better payout. Also, you have to increase -- consider the increase in our flows. So like I said, we managed to gather deposits at very low cost. We have increased our activities in terms of lending as well. So the improvement is essentially due to those BTPs that we're paying off very little amount of interest, a very little interest. And instead, they will be replaced by higher paying BTPs. As to your second question, I hand it over to our CFO.
Angelo Lietti: [Interpreted] I have to say that a draft budget law was circulated, but the government is still working on it. Minor change would change the overall picture completely. So we want to wait for the final law to be passed to express ourselves. I make quote some of the figures mentioned by our competitors, but considering the draft budget law as is today, it's manageable by us or by other banks, it will have an impact on the regional production tax, it will help us free up reserves on the non-deductability of payable interest and so on and so forth. And also, you mentioned the European Court of Justice judgment, which is final. Italy hasn't actually fully incorporated this judgment into its national laws. But apparently, the government set up some kind of reserve, earmarked some money to return the money to the banks that were unduly taxed because of the dividends they received from our foreign-based subsidiaries. So as far as the draft budget law is concerned, we think it's manageable. There are obviously positive and negative impacts on us and other banks as well.
Massimo Doris: [Interpreted] Before we continue on with Italian line, I'll rather hand it over to the English line for a minute, and then we'll get back to Italian.
Alessandra Lanzone: Let me hand it over to the operator on the English channel for the Q&A session.
Operator: And now we're going to take the question from English line. And it comes from the line of Hubert Lam from Bank of America.
Hubert Lam: I've got a few questions. Firstly, on -- you mentioned for NII, now you expect 2026 to be higher than '25, at this stage, how much higher do you expect it to be? The second question is just a clarification on performance fees. You mentioned that if the year ended today, you would have accrued EUR 150 million, just double check, does that EUR 150 million refer to the full year or just to come up just that EUR 150 million that could happen in Q4 alone? And lastly, I just want to check also on the dividend of EUR 0.60. You mentioned that it also includes the Mediobanca proceeds within that EUR 0.60. How much of Mediobanca is within that EUR 0.60?
Massimo Doris: [Interpreted] Talking about the NII increase. This could be a double-digit increase when compared to the 2025 level. However, it's a bit too soon to really talk about this considering the present yield curve. The EUR 150 million performance fees have to be added to the ones that have been accounted for in the first 9 months. So it's plus EUR 150 million. And as to the EUR 0.60 dividend, the Mediobanca portion accounts for some EUR 0.20. So it's 1/3. Thank you, Hubert. We will go back to the Italian line. If there are no other questions on the English line. Yes, I hand it over for the next question.
Operator: From Gian Luca Ferrari, Mediobanca.
Gian Ferrari: [Interpreted] Actually, I was going to ask the same question as Hubert. So we are talking about an incremental line in terms of dividends for 2026, 2028, you said that Mediobanca stake sale accounted for EUR 0.20. So these let's say, that a cleanup starting point would be EUR 0.80. If we multiply the amount of -- the dividend amount you are paying out now, we multiply it by 2 for the next few years. Will you be following this trajectory? Or are you going to pay out even more?
Angelo Lietti: [Interpreted] well, talking about the trajectory -- the dividend trajectory right now is a bit premature. At year-end, our ideas will be clear. The fact that the sale of Mediobanca as a stake accounted for EUR 0.20 out of the total of 60, but that had no impact on our accounts because the extra capital generated by the sale of Mediobanca was equal to EUR 150 million. So we may say that EUR 150 million are worth EUR 0.20 in terms of a portion of dividend paid out. As far as the trajectory of future payouts are concerned and future distributions. Well, those depend on a number of things that will be more visible at year-end.
Massimo Doris: [Interpreted] Let me add 2 comments. Our business is rock solid. In the medium term, I don't expect a collapse in profitability assets are growing in 2008, 2011 or in 2022, assets declined, obviously, because markets were declining. Though we reported in those years too, we reported positive net inflows, and this has an impact on recurring fees. But crossing our glance forward, I think that net of performance fees that may or may not be generated, I think that our income statement will be growing. Our P&L will be growing and consequential -- as a consequence, dividends will be growing. Also, the CEO is a major shareholder in the bank, and he and his family do love dividends. We've always been a generous bank when it came to distributions, we will continue to be generous. But at the same time, we always keep an eye on the long term. We have a robust capital ratios, and this kind of guarantees us the possibility, the opportunity of paying attractive growing dividends even in years where the net income maybe is not that high. But since our capital ratios are so robust, we could pay out more and have maybe capital ratios decline a bit because they are so high. So I don't know whether we can think that the basic dividend is EUR 0.80 or EUR 0.85 whether it will go up by EUR 0.05 or EUR 0.08 a year. At this point in time, I don't know. But I myself as the CEO and as the shareholders, I am extremely interested in making shareholders happy, myself included, and that is why we want to continue to be generous with dividends.
Operator: Next question, Alberto Villa, Intermonte SIM.
Alberto Villa: [Interpreted] I need just a couple of clarifications. Again, NII guidance, does the 2026 guidance include commercial activities and initiatives? Or the expected growth is actually tied to assumptions that do not take into consideration commercial campaigns that have short-term impact on NII? Second question in regards to Spain, robust growth and keeps on growing strongly. However, the contribution to net income was not growing. It was actually declining. What is your view on future profitability, whether this after this growth and investment, do you believe that the profitability in Spain will start to be comparable to the one you have in Italy? So structural profitability. The operating margin declined even though all the business activity numbers were growing. Can we expect to see a growth that sees -- that is in line with the operational performance and the growing number of clients and inflows?
Massimo Doris: [Interpreted] I'll start with the second question. This year, we decided to really start investing a lot in terms of the platform. So we had to revise the app and the website. They were sort of getting old. And also marketing costs we wanted to have a higher visibility on the territory and also commercial costs with aggressive rate initiatives so as to acquire and win over clients. And by the way, these same clients are seeing a good transition to managed assets. This is as far as this year is concerned. And next year, of course, we're not going to repeat exactly the same things. So Spain's profitability is going to improve, no doubt. This was only a onetime step that we introduced to really get up to a new level and start growing again to create the stepping stone so that we could grow again. As to the 2026 NII guidance, it includes the commercial initiatives as we did in prior years. So these costs were based on the present yield curve. Looking forward, should things change and they would be higher and then the same -- it will be reflected on the same guidance and vice versa. So really, there is no major impact from commercial initiatives to next year's guidance, but they have been included in the guidance. Going back to Spain, we should highlight the fact that the balance sheet -- Spain's balance sheet is different compared to Italy's structure. So it was more affected by the rate movement. And compared to the Italian market, it is much more competitive. In Spain, mortgages are less expensive than in Italy. Between 2005 and 2008, I was the CEO there, and I can say that things are rather different compared to Italy.
Operator: Giovanni Razzoli, Deutsche Bank has the next question.
Giovanni Razzoli: [Interpreted] Good afternoon. I have 2 quick questions and a more philosophical one. So the first question is about capital. So Mediolanum has a business model that is generating income grows. I mean, the company grows, but you are also growing your own capital. Currently, you have a leverage ratio that continues growing. Do we have to interpret this capital ratio, which is twice as much as your competitors as a guarantee that dividends will continue growing, considering that year after year, you will have a number of one-off components, et cetera. But have I -- I mean did I get you right? When I say that you are not going to make any extraordinary action, any management -- managerial action or anything, but you will keep growing year after year and dividends will grow at the same pace. Then you talked about the guidance for 2026 NII, which should be growing in terms of the level of double digit. So that I'd like to understand what kind of amount -- the total amount we're talking about. The final, more philosophical question is about AI. The whole industry is talking about Artificial Intelligence, how to engage customers via AI, ensuring at a convention, you showed us your new app, et cetera. But you're still betting on the human touch on your financial advisers. Don't you think that the AI is generating kind of a hype or is a hype?
Massimo Doris: [Interpreted] Okay. Let me take your first question first. Having a robust capital ratios allow us to pay out attractive dividends even when net income for whatever reason isn't as good as expected. You may also pay out 100% of net income because the capital ratios are so solid that we can have them soften a little bit and still keep going perfectly well. The other thing is regulatory changes. In the past, rules were passed that forced us to -- I mean, that absorbed a lot more capital. So if your capital layer is thinner, you have to recapitalize the bank and thus, you have to pay out lower dividends. If you are strongly capitalized as a bank, you can, of course, pay out dividends that are higher with a total peace of mind. So guidance for 2026 NII, yes, 10% plus 11%, plus 9%, I don't know. It's what we expect. But once again, we expect these numbers based on today's forward yield curve. AI, just like back in 2000 with the onset with the advent, rather, of the Internet, I think that this technology is being a little bit overrated. I'm not saying it's not good. It will be absolutely fully pervasive. It will be used everywhere just same as the Internet. It's being used everywhere. There are no companies that don't use the Internet and the same will apply to Artificial Intelligence. But just like back in the early 2000 time, they were saying that trading online will mark the depth of financial advisers, and this did not happen. Well, I think that the same goes for Artificial Intelligence. If you are a do-it-yourself investor, probably you will have, at that point, an even more highly performing platform, more efficient comparing to the most developed and the most Avant Garde trading online platforms of today. But Artificial Intelligence will never be able to meet the following demand by customers. Customers want to earn a lot of money, but they want no risk. Combining the 2 things is impossible. So when the client is going to ask AI to put together an investment portfolio generating 5% returns in real time -- sorry, in real term, at zero risk, I'm really curious to see what kind of answer the system is going to give to clients. I mean, no matter how intelligent that system is. I don't think that the 2 things can go together. So like I said, investors will be able to count on a faster, more efficient, more accurate, easier-to-use platform. And so the market will expand, but it's also true that, that technology in the hands of a financial adviser will be a tool that will help the adviser work better, more efficiently and faster. And when the customer is going to ask generate a portfolio that would return 5% in real term, but assuming 0 risk, the financial adviser will take a seat, and you know how seat decline rather and start explaining to the client that is not doable, but there are a number of options to try and meet their needs as best as possible. And also, I don't think that the advice given by Artificial Intelligence when customers say are panicking because markets are crashing. Well, I don't think Artificial Intelligence can provide the same degree of the peace of mind, the ability to calm down clients when things are going down the drain. AI cannot pat you on the shoulder and tell you to relax. So AI will be a tool that will make the business more efficient, more -- I mean faster and it will be also an additional very efficient tool for financial advisers. Those companies that decide not to invest in AI right now, in 10 years' time, will be in, I think, deep distress. It's as if in the year, the early 2000s, you have not invested in the Internet. By 2010, you would not have had a website, you would not have been able to contact customers online. This technology, AI, I mean, is here to stay. It's a fantastic technology, but I don't think it can turn our business model upside down. In this business, the person, the financial adviser, the human being will continue be a success factor and will be absolutely in demand. I am 100% persuaded of this. And this does not apply to Banca Mediolanum only. It will apply to all sales networks, and it will apply to traditional banks as well because more and more clients want to talk to somebody. So of course, they're going to cut down on the number of branches, but physical branches will never disappear entirely because the need for a human relationship is important.
Angelo Lietti: [Interpreted] Let me go back to the NII guidance because I see that it's a matter of interest. Today, we are just giving a guidance, it's a forecast. And as with any other guidance, I confirm that based on what we know today and the information we had today as the CEO was saying the current curves and the possible forecast we are providing with possible commercial campaigns. I confirm once again that we will brush the double digits. But then I would like to really think about this with all of you because, say, it would not come out to be 10%, but 5%, Considering that we are dealing with Mediolanum's figures, the net income impact would be 2% to 3%. So 14 to 15-month guidance, having volatility of 2% to 3% as compared on the net income figure is not really material. So we are now discussing whether it's going to be 7%, 8%, and 10% that Mediolanum is really very, very careful when providing guidance. Based on what we know today, this is the guidance we can provide. Then if along the year, things will change and rates curve will change. The guidance will change accordingly. But once again, considering the amount of net income Mediolanum generates, this is really a trivial, is negligible.
Operator: Are there any other questions? We have no further questions. So I hand it over to you, Ms. Lanzone to conclude the call.
Alessandra Lanzone: [Interpreted] We end the conference call here. We are going to meet again at the beginning of February for the financial year 2025 results. Thank you.
Operator: This is the end of the conference call. Thank you for participating, and you can now disconnect. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.