Good morning, and welcome to UniCredit's second quarter 2026 results. Our CEO, Andrea Orcel, will take you through the presentation.

This will be followed by an analyst Q&A session with Andrea and with our CFO, Stefano Porro. As ever, please limit yourself to two questions.

With that, I'll hand over to Andrea.

Thank you. Good morning, and thank you all for joining us.

Following an outstanding first quarter, I am pleased to present another record performance propelled by our core, contributing to the strongest first half in UniCredit history. These results demonstrate the strength of our business, the magnitude of our profitable organic growth, and the impact of our continued transformation.

Unlocked built the foundation; Unlimited is leveraging them, accelerating our trajectory and ensuring we are future-ready. This quarter, we achieved significant quality market share gains across all our regions while accelerating our transformation agenda, further improving efficiency and structural profitability.

It is proof our model is winning. It is enabling profitable organic growth while improving our operating leverage unlike any other bank.

None of this would be possible without our people. Their commitment, their care, and ownership are what makes UniCredit so special, leading in every market where we are present.

To each of them, my thank you. Today's results mark the 22nd record quarter, the best second quarter, and the best first half in UniCredit history.

They confirm the Unlimited step change across both acceleration and transformation, delivering exceptional core revenue profitable growth, further improving operating leverage, and reaching new highs across GOP, NOP, net profit, and return on tangible equity. All in spite of the negative one-offs related to Commerzbank offer and the acceleration of our Russia compression.

Because of this performance, the continued strengthening of our business and well-established lines of defense, we are upgrading our ambition again. We now expect 2026 net profit to reach circa €11.5 billion, excluding integration costs, and to be well above €11 billion including them.

This is in spite of negative circa €140 million extraordinary impact from Banca Progetto and Rober in Romania. Our net profit expectation would benefit should these not occur.

Our year-end CET1 ratio is also expected to improve to circa 15%, putting our capital on a stronger trajectory to absorb the impact of Commerzbank full consolidation. Our 2028-2030 ambition will benefit from the 2026 base effect and momentum.

It will be further improved by the full consolidation of Commerzbank and the value that applying our blueprint will deliver. Slide 3.

Over 20 quarters, Unlocked built a record of profitability, efficiency, and distribution excellence that set a new benchmark for banking. We unified as one, simplifying and streamlining.

We trusted and empowered our people while harnessing scale, and we built lines of defense to protect our future, all while continuing to invest. Now, with Unlimited, we are elevating our sustainable trajectory, going beyond the limits of legacy banking, gaining quality market share by growing revenue without sacrificing margin or asset quality, and resetting the efficiency frontier, leveraging new tools.

Unlimited is a new blueprint for the future, combining the strength of a traditional bank, the agility of a fintech, and the dynamism of a technology company. Slide 4.

A step change in acceleration. This marks the second consecutive quarter of significant organic market share gains across all regions.

These gains were targeted by client segment and product, accelerating growth, improving business mix, and strengthening the structural profitability of our franchise. This acceleration starts with investment in our people, factories, technologies, and channels.

Training hours per employee increased by 22%, while 2,600 new colleagues joined the group in the first 6 months of the year, 84% hired directly into the business. We continue to invest and innovate across our product factories, expanding our offering while capturing a greater share of the value chain.

At the same time, we advanced our fully integrated omnichannel model, combining the strength of our people with digital and AI-enabled capabilities. Initiatives such as Buddy in Italy and Prime in CEE demonstrate this evolution.

Investment in technology and AI are enhancing productivity and client experience, translating directly into stronger commercial momentum. Customer loans, deposit, and total financial assets all increased by 8%, driving higher revenue per client, core revenue growth of 5%, and overall underlying revenue growth of 10%.

This is the virtuous circle of Unlimited. We invest to become more productive and gain profitable market share, which, together with improving efficiency, turns into sustainable net profit growth at high return on tangible equity.

Slide 5. Unlimited transformation.

This is also the second consecutive quarter of a significant step-up in our AI-assisted transformation, enabling us to accelerate operational redesign and related efficiency gains. These gains have allowed us to hire talent, invest in technology and AI, and reduce cost simultaneously.

Our transformation starts with our people's commitment to improving in search of excellence, embracing change and simplification, and leveraging technology and AI. We continue to redesign and simplify our organization.

Since 2020, we have reduced organizational layers by 45%. We now operate a single AI platform that enables scalable solutions across the group while continuing to deploy AI against clear bottom-up business cases that deliver sustainable results.

These translate into both capital and operational excellence, with non-business costs down 5%, enabling us to fund investments that enhance productivity and client experience. This is what resetting the efficiency frontier looks like: not a one-off, undifferentiated cost cut, but a structural, targeted, and self-reinforcing transformation.

Slide 6. Unlocked comprised a series of major transformation projects to modernize our core technology and operations.

For example, evolving our IT infrastructure and cybersecurity, accelerating our move to the cloud, centralizing our trading and trade finance engines, and revamping our security service platform, all while using an advanced nearshoring model to bring our 13 banks' operations and technology closer together, optimizing processes and cost. Unlimited goes further, rethinking again our operating model with AI and new technology as key enablers.

We're deploying targeted AI to completely redesign our key processes, including KYC, onboarding, corporate lending, investment, and transaction monitoring. In payments, we're exploring new rails, actively contributing to the digital euro pilot and to the launch of a euro stablecoin through Qivalis.

In tokenization, we are building future-ready investment solutions for our clients, enabling greater automation, scalability, and efficiency across the investment cycle. Throughout, we measured our investments by outcomes, not by inputs.

Every euro we spend must enhance growth or efficiency and stand the test of time that may well increase the pricing of the necessary technology and AI. By transforming and accelerating at the same time, we're building a bank that is truly future-ready.

Slide 7. Our Q2 record performance is a clear beat of both expectation and last year across all operating lines.

Its true strength is even more fully apparent once you adjust for: one, the negative trading one-off and temporary RWA impact linked to our increased position and related protection in Commerzbank; two, Russia more accelerated compression; three, the more even quarterly distribution of our provisions; and four, last year large positive one-off linked to life insurance internalization in Italy. Adjusted revenues grew 13% in the quarter, with strong core revenue contribution up 7% as we gained profitable market share across all countries.

Costs continued their gradual decline, further improving our best-in-class operating leverage. Adjusted GOP and NOP were up by more than 20% in the quarter and more than 15% in the half, accelerating.

Adjusted net profit grew more than 20% to €3.1 billion in the quarter and €6.3 billion in the half, maintaining best-in-class return on tangible equity of respectively 23% and 24%. Finally, adjusted EPS, DPS, and tangible book value per share were up respectively 28%, 16%, and again 16%.

This confirms the strength of our underlying business, the momentum of our transformation, and the discipline of our execution. Slide 8.

Overall, revenues were up 7% in the quarter and 5% in the half. Adjusted revenues were up 13% in the quarter and 10% in the half, accelerating, driven by our targeted market share gains without compromising margins nor asset quality.

Net interest income was up 2% sequentially, down 1% in the half, slightly up excluding the impact of Russia compression. Fees and net insurance grew 14% in the quarter and 11% in the half, with their weight in net revenues increasing to 39%.

This was the result of a strong commercial dynamic, with both loans and deposit up 8%, maintaining an NII RoAC of circa 20%. We expect NII to accelerate in the second half.

Equity investment net of hedging cost further strengthened our performance, increasing by €900 million in the half, more than offsetting Russia compression. Overall, our revenue base is growing faster and becoming higher quality and more diversified.

Slide 9. Overall, net revenues were up 5% in the quarter and 4% in the half.

Adjusted net revenues were up 14% in the quarter and 10% in the half. Cost of risk remains structurally low at 17 basis points and within our 2026 ambition of 15 to 20 basis points.

We used circa €70 million of our overlays, mainly to absorb an update to the IFRS 9 macroeconomic scenario, given the changed conditions. Our overlay stock is now at €1.6 billion.

Adjusted net revenues on RWA stand at a top tier 8.7%, up 0.4% in the quarter. Asset quality improved further quarter-on-quarter.

Net NPE ratio was down to 1.4%, coverage improved to 45.9%, default rate reached a low of 0.8%. Slide 10.

Efficiency continued to be a defining strength. Costs were down again despite inflation and continued investment: 2% excluding new perimeter, 1% including it all.

Non-business costs fell 5%, with most savings reinvested into technology and AI and the frontline to boost revenues. Our cost-income ratio remained best-in-class, improving both in the quarter and in the half.

The result is a record GOP of €8.8 billion, with contribution from both sides of the jaws increasingly driven by our AI rollout. Slide 11.

Our quarterly organic capital generation of 85 basis points more than covered the quarterly distribution accrual. Our CET1 ratio increased to 14.3%, 14.5% excluding the 19 basis points impact from the increased Commerzbank position, which we expect to reverse by year-end, and 15% pro forma for the Danish compromise.

This beats our expectation and puts our capital on a stronger trajectory to absorb the impact of Commerzbank full consolidation. Italy delivered exceptional, strong organic growth without sacrificing margin nor risk, and is well-positioned to leverage market disruption from consolidation.

We're growing market share in our targeted client segments and products well above expectation, and we'll provide you an update of our three-year target in this regard later this year. The acceleration step change is visible: the number of our SME client is up 4% and wealth clients 9%, while our client penetration continues to improve.

As a result, revenue grew 3%, propelled by core revenues up 5%. Net interest income was up 2% sequentially, driven by quality loan growth of 8% and continued commercial discipline with NII RoAC at 23%.

Our corporate lending market share increased by 1 percentage point in the half, with improving margin as we rebalance our mix. We continue to increase market share in our targeted retail products with discipline.

Cost of risk decreased 2 basis points to 24 basis points, reflecting the continued quality of the loan book and discipline underwriting standards. Fees and net insurance were up 14% and reached 47% of net revenues, up 5 percentage points in the half, with strong delivery across the board.

Investment fees grew 8%, reflecting increasing relevance of our offering, with total financial assets up 9%. This strong commercial performance was supported by investment in the franchise, including the hiring of 800 new colleagues, 90% of which client-facing and business role, that will support continued acceleration in the future.

The step change for transformation is also increasingly visible, supporting this growth while continuing to reduce cost. Costs were down 1%, driven by non-business costs down 5% while continuing to invest.

Cost-income improves to 32.5%, remaining best-in-class. Net revenue to RWAs at 10.4% confirms strong capital discipline alongside growth.

AI impact is becoming increasingly tangible, both in terms of commercial productivity and in terms of operational efficiency. GenAI is supporting Buddy advisor to provide faster, more consistent, and higher quality client interaction.

Credit processes are now being automated through AI, reducing time-to-yes and improving efficiency and client experience. The combination of acceleration and continued transformation translated into GOP growth of 5% and RoAC of 31%, maintaining Italy's position as the most profitable banking franchise in the country.

Slide 13. Germany is delivering strong organic growth while demonstrating that sustained investment, disciplined execution, and transformation translate into best-in-class efficiency and profitability.

The acceleration step is visible. We continue to strengthen our position in targeted segments, adding more than 3,500 new private and affluent clients, and reinforcing our position as the best bank for the Mittelstand and trade finance.

This commercial momentum translated into revenue growth of 3%, propelled by core revenue growth of 8%. Net interest income increased 5%, driven by quality loan growth of 3%, with NII RoAC at 19%.

Cost of risk increased 9 basis points to 22 basis points, reflecting a more normalized provisioning profile while asset quality remains strong. Fees and net insurance were up 13% and now accounts 36% of net revenue, up 4 percentage points in the half, with strong delivery across the board.

Investment fees grew 16%, reflecting the increasing relevance of our offering, with TFAs up 3%. The strong commercial performance is supported by continued investment in the franchise.

Germany remains a top employer. Hiring was up 24% as we continue to invest in client-facing capability and future growth.

The step change for transformation is also increasingly visible, supporting this growth while continuing to reduce cost. Costs were down 5% in Germany, driven by non-business costs down 9% while continuing to invest.

Cost-income improved by 3 percentage points to 35.3%, further strengthening our position as the most efficient bank in the country. Net revenue to RWAs stood at 8.1%, confirming strong capital discipline alongside growth.

AI impact is becoming increasingly tangible. The rollout of advanced fraud prevention solutions and other AI-enabled initiatives is helping us enhance client experience, improve effectiveness, and further simplify our operating model.

The combination of acceleration and continued transformation translated into GOP growth of 8% and RoAC of 23%, confirming HVB as the most profitable and efficient bank in the country. Slide 14.

Austria continued to strengthen its market position. The step change from acceleration is visible.

We continue to acquire targeted clients across key segments, with more than 1,000 new SMEs. This commercial momentum translated into core revenue growth of 4%, with overall revenue flat.

Net interest income increased 2%, supported by quality loan growth of 6%, with NII RoAC improving to 16%. In corporate, we gained 43 basis points of market share over the last 12 months, further strengthening an already leading franchise.

Cost of risk remained negative, 12 basis points, still benefiting from releases. Fees and net insurance were up 8%, reaching 31% of net revenues, with particularly strong performance in investment fees, up 14%, with total financial assets up 9%, reflecting deeper client engagement and growing penetration.

The strong commercial performance was supported by continued investment in the franchise. We hired around 200 colleagues in the frontline and continued to strengthen capability across both business and transformation.

The step change from transformation is also increasingly visible, supporting growth and investment while reducing cost. Costs were down 3%, driven by 4% decrease in non-business costs while continuing to invest.

Net revenue to RWAs stood at 6.8%, confirming strong capital discipline alongside growth. AI impact is also becoming increasingly visible.

More than 360 AI agents are now supporting multiple activities across the franchise, helping improve response time, productivity, and client experience. The combination of acceleration and continued transformation translated into a GOP growth of 2% and RoAC of 27%.

Slide 15. CEE continues to benefit from its leading position across the region, a strong primary client base, and high digital engagement, while remaining well-positioned to capture further growth opportunities.

The step change in acceleration is visible. We continue to strengthen client relationships across the region, growing affluent clients by 19% and standing as the best bank for SMEs in the region.

This strong commercial momentum translated into 6% core revenue growth, 5% for overall revenue. Net interest income increased 5%, supported by strong quality loan growth, up 11%, with NII RoAC at 23%.

Cost of risk increased 24 basis points to 13 basis points, normalizing from past exceptionally low levels due to significant writebacks. Overall asset quality and underlying cost of risk remain stable.

Fees and net insurance were up 9%, reaching 31% of net revenues, up 2 percentage points in the half, with strong contribution from investment fees, up 22%. Together with 19% total financial asset increase, this reflects the continued development of our affluent and wealth franchises in the region.

The strong commercial performance was supported by continued investment in the franchise, hiring around 1,000 colleagues, mostly in the frontline. The step change in transformation is also increasingly visible, supporting growth while reducing cost.

Costs were down 1%, a first for the CEE, supported by non-business FTE decreases of 6% as we continue to reinvest and invest in technology. Cost-income improved to 33%, confirming operational excellence.

Net revenue to RWAs at 8.1% demonstrated strong capital discipline while supporting double-digit balance sheet growth. AI and new technologies continue to be key enablers of transformation.

With now over 75% of clients digitally active, we are leveraging AI solutions to improve commercial effectiveness, simplify processes, and further enhance client experience. The combination of acceleration and continued transformation translated into GOP growth of 8% and RoAC over 27%, confirming CEE's position as a profitable growth engine.

Slide 16. Client Solutions remains a core pillar of our capital-light growth, powering the quality and resilience of our topline.

Client Solutions generated €6.5 billion revenues, up 7%, and €4.7 billion of fees and net insurance, up 14%. Growth is broad-based across all product factories, with visible benefits from internalization, including double-digit fee growth in Italy, in Germany, and in the CEE.

Corporate Solution revenues reached €3.1 billion with a 28% RoAC, leveraging strong client activity in advisory and financing, with fees up 26%. We maintain our role of trade finance powerhouse, with top-tier position in every country we operate in and best trade finance provider in Western Europe and Germany.

Client risk management fees were up 15% with receptive market condition for hedging products. Individual Solution delivered strong growth, with revenues up 18%.

Insurance revenues were up 32%, driven by internalization and strong commercial activity. We're number one in Italy in unit-linked, with a market share of over 40%.

Investment grew around 13%, with on-market funds above €41 billion, up more than 80%. Payment Solution remains solid, with fees up 3%, driven by transactional payment services across all geographies.

Slide 17. The messages are clear.

First, 22 consecutive record quarters mark an undeniable track record and delivered sector leadership across all critical KPIs. Second, we have significant lines of defense to protect our future.

Third, Unlimited step change is underway, leading to upgraded ambitions. We now expect full year '26 net profit at circa €11.5 billion, excluding integration costs, and well above €11 billion including them.

2028 and 2030 net profit ambition are upgraded to well above €13 billion and well above €15 billion, without diluting expected return on tangible equity. Year-end CET1 ratio should land at circa 15% pre-full consolidation of Commerzbank and the connected 2025 share buyback cancellation, in the 13% area pro forma for both, much better than initially expected.

As such, UniCredit 2026 distribution are also confirmed. Slide 18.

We have significant inorganic optionality with opportunity across all our 13 countries, some of which we have captured initially through high-return financial equity investments, and now through the potential Commerzbank value-creating acquisition. Including the tender shares, we have reached 47.6% of shares and 49.65% of voting rights, given that the treasury shares have no voting rights, potentially moving Commerzbank from an attractive financial investment to a strategic transaction that we expect to generate substantial value and further accelerate Unlimited EPS and DPS trajectories.

It would improve UniCredit's strength, diversification, and client franchise in Germany and CEE, as recognized by rating agencies. We believe Commerzbank has underinvested in recent years to deliver in the short term.

It is now time to reverse this trend and prioritize overall transformation, substantially investing in talent, in technology, and in AI initiatives to transform the bank. We are upgrading our pre-merger value creation potential from €800 million to €1.2 billion by 2030 by anticipating part of the post-merger synergies, which we are, for now at least, reducing to €800 million.

Considering only pre-merger value creation, our capital has been deployed at an overall RoAC of 15%, well above the return of our share buyback. Our 2026 dividend and share buyback are confirmed, while the trajectory for net profit, EPS, DPS, and distribution beyond 2026 shall improve.

We now expect regulatory approval potentially as early as fourth quarter 2026, and shortly thereafter intend to take the necessary step to exercise control and begin executing Commerzbank Unlocked. We're seeking constructive engagement with the German government, the workforce representative, and bank's governing bodies and stakeholders.

A cascade offer in Poland is not currently foreseen. Slide 19.

Beyond its strategic fit, the attractiveness of Commerzbank lies in the value creation achieved by applying the Unlocked blueprint, which we intend to roll out as quickly and decisively as possible. This starts with putting Germany and its Mittelstand truly back at the center, leveraging a stronger product offering, greater scale, and increased investment capacity.

At the same time, the connection between Germany, Poland, and the rest of Europe should be further strengthened, and digital, data, and AI capabilities across the franchise accelerated. The value creation opportunity is substantial.

We see €350 million of revenue initiative potential upgraded versus our initial assumption, notwithstanding international lending and treasury asset optimization that shall both reduce risk and release capital. €1.4 billion of potential targeted efficiency are confirmed.

Importantly, this is not about cost cutting for its own sake; it is about reallocating resources, improving capital efficiency, and reinvesting to build a stronger franchise for clients, employees, and shareholders. While technology and AI will be key enabler, it is Commerzbank employees that will accelerate transformation, simplify the operating model, and enhance the client journey, as we have experienced across our group.

There is a clear opportunity to create a stronger Commerzbank, a stronger UniCredit, and a stronger pan-European banking group for Europe. Slide 20.

Beyond the financial impact, a strategic transaction would create a stronger, more diversified, and better positioned European franchise, with a broader client base, enhanced geographic diversification, and greater exposure to the client segment and product in which we always intended to grow. Germany would become the leading contributor of the group earnings alongside Italy, with a great balance between Italy, Germany, and Austria and CEE.

The client portfolio would also strengthen, with increased exposure to SMEs, affluent, and private client, and further reinforce our position in Germany through a highly complementary franchise. We're entering this phase from a position of strength.

UniCredit has invested more than €5 billion in the last 5 years and built €1.6 billion of overlays. We see an investment of €2.2 billion in Commerzbank to accelerate value creation and make the franchise future-ready, and would expect €500 million of additional upfront coverage on the Commerzbank loan book to protect it.

Greater group diversification and an increased balance across geography, client segment, and revenue streams may support further rating upgrades and related funding benefit. Slide 21.

UniCredit year-end CET1 ratio pro forma for the impact of the transaction is expected to remain in the 13% area from day one. Indeed, the initial capital impact of the transaction is now expected to be around 200 basis points, net of the cancellation of the 2025 share buyback, assuming consolidation by year-end.

Said capital impact would reduce significantly if consolidation occurs later, as initially expected. Considering only pre-merger value creation, our capital has been deployed at a RoAC of 15% overall, well above the return from our share buyback.

UniCredit 2026 distribution remain unaffected. UniCredit distribution for '27, '28, '29, and '30 are expected to improve through Commerzbank contribution beyond the now expected more positive trajectory of Unlimited standalone.

We're deploying capital at attractive returns, maintaining a strong capital position, and improving our earnings growth and distribution trajectory. Slide 22.

We always envisaged HVB and Commerzbank operating in parallel for 2 to 3 years, aligning the two banks industrially and culturally before considering any merger. We believe this is the most effective path to unlocking value for all stakeholder while laying the foundation for long-term success.

Importantly, most of the value is created pre-merger, as we are upgrading our pre-merger value creation from €0.8 billion to €1.2 billion by 2030, while reducing, for now at least, the additional merger synergies to €800 million. At the same time, we would see investment being brought forward, increasing from €1.7 billion to €2.2 billion upfront, accelerating the transformation of the franchise, and €500 million of additional upfront coverage of the Commerzbank loan book.

This reflects our intention to prioritize investment and long-term value creation over short-term results and distributions. There would be more upfront investing, creating more value over time and accelerating delivery of a future-ready bank.

Slide 23. Commerzbank further enhances what is an already compelling standalone equity story.

Even before considering Commerzbank, our standalone trajectory is exceptionally strong, combining double-digit per-share growth at high RoTE and industry-leading distribution. Importantly, the reported 2026-2028 growth rates understate the strength of the underlying trajectory as they still absorb the impact of an accelerated Russia compression.

The figures shown today are directional and reflect only what is visible today before a potential merger. As we continue to execute Commerzbank Unlocked, we expect the trajectory to strengthen further beyond 2028 and towards 2030.

The transaction is expected to increase our 2026-2028 net profit CAGR by 6 percentage points and EPS and DPS CAGR by around 4 percentage points, reaching 17% and 18% respectively. In short, Commerzbank is reinforcing an already compelling standalone story, further improving profitable per-share growth and distribution for our shareholder.

Slide 24. Before question, let me leave you with five key messages.

First, Unlimited confirms a step change, marking our 22nd record quarter and the best second quarter and first half in our history. We continue to deliver at pace, accelerating and securing targeted profitable market share gain in every country, as promised.

Second, this is coupled with an unmatched transformation-led efficiency, resulting in lower cost and unique operating leverage, all while investing, again, as promised. Third, we're delivering exceptional operating leverage, record GOP, NOP, net profit, and return on tangible equity, along with an improved capital trajectory.

Fourth, we're upgrading our 2026 net profit at high return on tangible equity and capital trajectory, translating this into better prospects for '27-'30. Finally, we now have an even more compelling standalone profitable growth and distribution story, which may be boosted by the disciplined deployment of capital in Commerzbank.

Let me now open the line for your question. Thank you.

Thank you. First question on the Danish compromise.

Santander said they expect the approval of the Danish compromise in August. You've been waiting for a year for this approval now.

When do you expect it by, and does not having it yet limit your strategic options? Second question, do you see your CET1 ratio as a hurdle to participate in the ongoing Italian consolidation wave, and how should we read today's call for an EGM?

Thank you.

Sorry. Danish compromise first.

We always said that the Danish compromise would would be we expected it in the third quarter. Some others thought it could be earlier.

We always say third quarter. We remain third quarter.

If I had to take a guess, it's probably September, but our expectation has not changed, and we are rather confident that we're going to get it. Does does that limit our options?

No. I think it just reinforces our capital and it recognizes that we are conglomerate and that we have internalized insurance.

Obviously, in the future it gives us more flexibility around insurance assets, but that is not a limitation at the moment. Is our CET1 is CET1 a hurdle to participate in Italian M&A?

No, I think that the hurdle is that at the moment we're observers. At the moment we are gaining a disproportionate amount of market share organically, targeted specifically in the client segment that we want to grow into, and that trajectory we think will be significantly accelerated by the fact that all other banks may be involved in M&A, and not easy M&A.

Anything that we would ever do, as would need to beat that hurdle, and the hurdle for Italy at the moment, given how the team is performing, is very high. If there is a hurdle, it's not capital; it's how the performance who can beat the performance of the team in Italy.

Not an easy not an easy one. How should we read today's call for EGM?

I think today's call for EGM is linked to two things. One, to have the possibility, not the obligation, to have the possibility, if we choose, to to convert the physically settled TRS on Commerzbank to settle it in shares at a similar exchange ratio as the one of the rest of the offer, and so it will it would align that percentage to the other tender shares, which we think is good and which we think also strengthen our capital.

It is an option because, A, we haven't decided whether we will we will convert the TRS yet, and we haven't decided if we confirm it whether we will convert it for shares or for cash. It is flexibility, giving us more capital flexibility going forward.

The second thing, it is it would allow us to tap the US market with AT1, as AT1 in the US have a different structure and require underlying shares potential to settle. Therefore, we are aligned to some other European banks with an ability to to tap the US market and get benefit from that.

I think these were the two Yes. Thank you, Andrea.

Good morning, and thank you for taking my questions. I have two: one on Commerzbank and one on 20 2027 capital return.

On Commerzbank, you reached 46% stake before TRS, which will allow you to pursue control quickly. I would like to understand whether the German government showed interest in talks thus far.

I know it is premature, but I'm going to ask it anyway: is there a scenario in which you could fast-forward the integration of Commerzbank? Second question on 2027, I would just wanted to understand how you would approach capital return in light of the €2.2 billion investment and €0.5 billion additional coverage.

Will the entirety of this €2.7 billion go through P&L, and will you pay 80% on the stated net profit, or will you exclude one-offs? Thank you very much.

I think that the German government has signaled quite clearly in the media their interest to talk. It is the right time, I guess.

As indicated by them, the market has spoken, and now we have a period which I could call of limbo between having closed the offer and potentially receiving authorization, which is anywhere between, I don't know, 4, 5 months or more than that. In this period, it makes total sense to align with the other stakeholder, German government and works council alike.

I think for now, we haven't said that as lip service. We do believe that combination needs to be done in the right way, and the difference between having a successful merger and an unsuccessful merger is how you actually execute it.

We think that having two banks that are aligned, principle, value, culture, model, technology, etc., makes merger a lot softer, a lot more effective, and therefore we are convinced that we will need 2 or 3 years keeping the banks separate before doing anything. To be clear, even if we had a higher stake, we wouldn't be merging earlier.

Obviously, this is all predicated on expectations. We do not have control of Commerzbank yet.

We can comment only on what we see from the outside. We will update those views if and when we are on the inside.

This is the first one. 2027 distribution.

I think for us, we need to distinguish distribution for UniCredit and distribution for Commerzbank, and obviously this is under the assumption that we indeed take control of Commerzbank. Distribution for UniCredit, we do not see any change.

Meaning, to take your words, '26, we already said we have confirmed distributions. For '26, I'm talking about UniCredit, and we may actually improve our interim dividends given the strength of the business.

We will give you more detail on that. The totals and the 80% payout remains confirmed.

For '27, '28, '29, '30, we expect gradually better distribution if Commerzbank is part of the perimeter, given that we have deployed capital at better return than if we had done the share buyback, and therefore we think on a per-share basis we are going to have a positive impact. The concept of 80% payout, 50% dividend, 30% share buyback, is confirmed.

With respect of Commerzbank, I would take a slightly different point of view, to be transparent, as part of the CBK Unlocked. We envisage a need to bring forward investment, accelerating the transformation of the franchise and the delivery of the future-ready bank.

Outside-in, that means investment for about €2.2 billion. This would be at the level of Commerzbank.

This would be shared among all shareholders and may impact short-term profit and distribution, including in '26. This would be reflecting our view that investment and long-term value creation should be prioritized over short-term returns and distribution.

This, at this point, is hypothetical. We don't have control yet.

We don't know when we're going to consolidate, but it is obvious that if we start making the investments that are needed, that affects net profit, that mechanically affects distributions. We will see when we're there what the real impact is.

I think these were your two questions. Yeah.

Let's move to the next.

Morning. It's Antonio from Bank of America.

Just two questions from me, please. The first one is on NII.

If I look at the growth in NII this quarter, it looked like it was driven almost exclusively by volumes and seems to imply some margin pressure. Now, I wonder why that was the case, also conscious that Russia was flat this quarter.

Can you maybe talk through your moving parts in NII, and can we expect a sequential pickup in NII from here, given also the move in Euribor? I think you've added another €7 billion or so to your structural hedge this quarter.

Interested to hear your thoughts there on NII. My second question is, I think, straight and simple, and is to do with your 2025 fiscal year buyback, the €4.75 billion you've accrued.

Should we definitely rule this out and assume that this is no longer happening? If that's the case, why haven't you added it back to your CET1 ratio?

Thank you.

Antonio, on the full year 2025, when you say should we definitely move it out, definitely is if we get control of Commerzbank and we consolidate. In that case, definitely move it out.

We don't have authorization yet. There's still things that can happen, and that's why, for the time being, not having confirmation, we're not moving it out.

In your words, and I would add another thing: moving it out upfront and then taking it and then spending it later would create really a lot of swing on our capital trajectory that I don't think would be helpful. Primarily, we don't have closure; therefore, the share buyback for the moment remains suspended until such time that we have closure.

If the closure is positive, then it gets canceled; if it's not, it gets reinstated, to be very, very clear. This is where we're on that.

On NII, I think Stefano is going to take you through, but I would say in Italy, margins are up. In other countries, there has been a declining margin market-wise because of the growth rates that I think are market-related, and we have followed, not to lose track, and the rest is delta compression.

As we have said in the presentation, we think NII will become a much greater contributor to the group in the second half of the year because of the underlying rates dynamic and because certain other dynamics on margins are stabilizing, especially in places like the CEE and Germany. Let me pass it to Stefano.

Let's start from Q2 and also first half because you mentioned Russia. We have grown the net interest income 2% quarter-on-quarter, 0.4% when we are looking the year-on-year.

The effect on the first half deriving from Russia is €70 million down. Otherwise, the increase first half on first half would have been higher.

In relation to the client spread, asset side of the equation, if you look the first half, the client spread are flat. Are around 138 basis points.

As highlighted by Andrea, we are up year-on-year in Italy and in Germany, while due to the market trend, we are down in Austria and in Central Eastern Europe. In Central Eastern Europe, as you have seen, the growth rate of the lending is very, very strong.

In relation to the deposit side, the deposit pass-through is flat, we are at 30%. We are flat in Italy and Germany, slightly up in Austria, slightly down in Central Eastern Europe.

Expectations for, let's say, the client spread for the group, you can assume flattish trend. Deposit pass-through flattish for 2026, can be 1 point up in '27-'28, but nothing more than that.

We are expecting to keep on growing on the lending, probably a normalized rate when you are looking to second half '26, but in relation to '27 and '28, we are confirming growth higher than a nominal GDP trend in the countries. You mentioned sequential pickup.

Yes, do expect a sequential pickup in the trend of our net interest income, structural hedge contribution, and rate assumption. The rate assumption is 2.3% Euribor for this year as an average, around 2.6% for '27 and '28.

Taking this into consideration, the contribution from the structural hedge is expected around €400 million this year, the positive. The cumulated contribution until 2028 is €1.3 billion cumulated, so that the positive effect on net interest income, €2.4 billion cumulated until 2030.

That's very clear.

Yes, good morning. Thanks for taking my questions.

Just wanted to have a thought first of all on Commerzbank, a follow-up to what you said earlier. In terms of next steps to increase your stake further to just under 50%, then you are now considering the TRS and converting potentially in shares.

Just to check, we talking about potentially up to 13% additional stake that you would get from that. Would you consider also in the discussions with the German government to potentially acquire part of their stake, their 13% stake, or is there no discussion, or you think this is completely premature and won't happen for another 2, 3 years?

At what level would you consider that merger and full combination, because in theory, you could get that at 75% of the AGM, which is 60% stake roughly. Then, just on the synergies, what gives you the confidence that you can generate already €800 million by the end of '28?

The timeline is quite short. If you don't mind just elaborating a little bit on what are these kind of easy wins that you think you can achieve.

Then just one comment on the capital. It's clear you're at 13% on a pro forma basis.

Just how quickly can you get the other reductions that you've talked about, in CBK Unlocked? I think it was €30 billion €33 billion.

How quickly could you get that and to generate more capital for the group? Thank you very much.

Okay. Thank you, Delphine.

Let's start with one. Let's be very clear, maybe I wasn't.

The answer to Andrea's question on the EGM and on the TRS is only related to the physically settled TRS, 3.2% thereabout. When we state that we have reached, or when people state that we have reached either circa 47% or circa 50%, that includes that 3.2%, okay, because it is physically settled, we can take ownership of it whenever we want.

Okay? It's only that 3.2%, and it is already included in the stakes that we have in the presentation.

We are only saying one thing: that because it's physically settled, the timing of executing on the TRS, is to our choice, we have optionality on timing, and we have optionality on whether to do it for cash or, assuming that the EGM approves it, for shares. Timing and cash or shares allow us to maximize our capital flexibility, if you want to call it this way, and not affect in any way, shape, or form any distribution, nor have any concern of any reason.

At the moment, that is what it is. Secondly, you ask about the government stake.

I think you said it, in my opinion, it is too premature. What we're seeking is a face-to-face engagement, where a lot of the misunderstanding and, in our view, misleading information can be cleared up, and where we will, in my view, demonstrate that we agree a lot, lot, lot, lot more than we disagree, and to find a cohesive way of going forward.

We would be delighted to keep them as a shareholder. If they stayed as a shareholders, it would be obviously, who would not?

For the time being, way too premature. What level of shareholding would you consider for the merger?

Look, if you look at sorry to go back to my experience in the future, but when you do a lot of M&A, M&A fails for two reasons. One, you're dragged into paying too much, and then you're pushed of doing the wrong thing to try and demonstrate that what you have paid was worth it.

We don't want to do that; we haven't done that. The second thing is not be thoughtful in the way you're going to integrate two companies that have different culture, different business model, etc.

If you're trying to integrate two companies before you have aligned them, you will have an enormity of disruption, which is why we said 2 to 3 years. That's what we see from the outside.

Not that they're right or they're wrong, or we are right or we are wrong, we're just misaligned, and it will take time. That does not mean that 2 or 3 years we will not generate value.

In fact, we're telling you we will generate €1.2 billion of value while we're doing that, while we are realigning. Then value creation moving parts, okay?

The value creation moving parts and why €800 million so quickly. If you look at the composition of our value creation on Commerzbank, a lot of it is executable very quickly.

Point number one: we have a substantially lower price point on all of our procurement, and people don't look at that a lot, but we have a lower, lower price point, and that affects technology, it affects a number of significant purchases that the bank does with all of our providers. Expanding that group price point to Commerzbank will have substantially cost effect.

That's why we said that a significant amount of our value creation, if I recall correctly, 40-50%, is non-FT related. That's one of the levels.

The second thing that we can generate very, very quickly is the moment we were to be able to plug our factories into Commerzbank, that's why this transaction is a lot more about revenue synergies than other things, we can crystallize those very, very quickly. We know how quickly because just by partnering constructively with Alpha, you can ask them how quickly they have crystallized those revenues on their side, and some of the growth you're seeing in our factories on our side is linked to that.

Now consider Commerzbank as part of the group, we would crystallize it both sides. That's another big chunk that is easy, is not disruptive, and can be done really, really quickly.

Then there is another point which has to do with the setup of the international network. Let me be clear on that.

We keep on winning powerhouse trade finance of the year across Europe. We won it in Germany more than 1 year, we know what we're talking about, and we have absolutely no intention to create any disruption to the German corporates that we're trying to serve, quite the opposite.

Some of them will realize that our trade finance engine is a lot more advanced and can provide a lot of supports. Centralizing the trade finance engine, centralizing the trading platforms in one place and renouncing to lending in geographies and with clients that we don't know as well as the European ones that we focus on can be done very quickly and is outside of Germany and outside of Poland.

In fact, will determine some potential either hiring or redeployment of people in Germany as we centralize those engines into Germany rather than having them spread externally. Another point is Commerzbank, like us, has relied or is relying increasingly heavily on nearshoring in Poland, in Czech Republic.

We believe we have one of the most advanced nearshoring models, fully technology and AI-enables. We got praised several times on that.

Synergies on those are very quick to execute. They're not in Germany and they're very quick to execute.

As you can see, there is a lot of things that we can do quite quickly, and I probably didn't list them all, that are completely unrelated to merging. They are related to aligning, to getting organized, and that's why I think we will speak a much clearer language between the two sides once we talk to each other.

Then the last point that you had, the €33 billion RWA reduction in CBK. I think overall 2 years.

It depends on a number of things, but the great thing about PPA and repricing is that you get everything repriced to market upfront and you don't lose when you sell them. We believe that there are significant assets in treasury around asset-backed security, international government exposure, including the Italian one, and lending in the US, in Latin America, to real estate projects, trade, and other, I don't know, data centers, etc., that can be disposed relatively quickly.

We will not have a complete understanding on that until if and when we get in there. Given our experience in other places and what we think is in there, 2 years, and we will try to front-load as fast as we can.

Thanks very much for the presentation, and good morning, everyone. I just have two questions.

The first one is on the organic capital generation and how should we think about organic capital generation over the coming quarters. If I just look to the target of around 15% by full year '26, and I look to the benefits from Danish compromise and the RWA reduction, I don't get a big capital generation.

Just wanted to get a bit of your thoughts if that is because you are planning to accelerate lending growth. If so, how that would impact your revenue growth?

If not, if there is any other headwinds that I'm missing. The second one is on your 2028 guidance target of being well above €13 billion.

Just wanted to get a bit of whether there is any impact on that from the end of the hedging costs of Commerzbank stake, or if it's just more the delivery of Unlimited and the increased commercial focus. Thank you.

Sorry, Ignacio. The restructuring charges and hedging cost 2026, first of all, with respect to our integration costs, that is what you're mentioning for 2026.

As we modulate. We can go as low as zero, or we can go to a level that allows us to deliver for you in the short term, but accelerate in a number of places.

We keep that flexibility. Usually, we take a decision at the back end of the year when we see what opportunities are there and where they're going.

This approach to integration cost will continue, but will always be done thoughtfully to maintain the targets that we're giving you. When we tell you well over €13 billion in '28, we will deliver, or we will strive to deliver, well over €13 billion, and that is including integration cost.

We can modulate them. With respect to hedging cost related to Commerzbank, you have two scenarios.

Scenario one, you exclude everything that is happening on Commerzbank. Then the numbers that we are giving you for '26, for '28, for '30, include the hedging costs of Commerzbank and include the integration cost that we want to do.

Okay? That's one scenario.

That's why we're saying that before you look at Commerzbank, Unlimited, or the core of UniCredit, the core engine room, is performing better than we even expected, and is improving to the €11 billion to €11.5 billion area this year, and then well over €13 billion, well over €15 billion. This is, like-for-like, just acceleration of the core is driving that.

We will review where we are in the third quarter. If instead we get to a position where we need to consolidate line-by-line Commerzbank, then it changes, because obviously, in the numbers that we are giving you, we are also eliminating the hedging cost, because we no longer need hedging cost if we consolidate Commerzbank as any other bank in the group.

In that case, yes. Okay?

I'll let Stefano comment on the organic capital generation. Yeah.

Do expect organic capital generation higher than distributions fundamentally in every quarter, but when we are looking to the second half, you can assume that. In relation to risk-weighted asset trends, some data points for you, not different in comparison with we discussed in the past.

We mentioned Danish compromise. When there is the Danish compromise, there is a capital benefit of something more than 50 basis points, but there is a nominal increase of risk-weighted asset of around €6 billion.

Then operational risk, at the end of each year, considering the trend of the revenues, do expect that around a couple of billion more of risk-weighted asset deriving from operational risk are going to be there, not only for 2026, but considering the trend of our revenues, also for 2027 and 2028. We add a very strong lending dynamic, and as a consequence, absorption of the capital connected to business dynamics.

On average, we are expecting to be able to have capital efficiency action in place in second part of '26, but also during '27, that are able to mitigate the capital absorption in terms of risk-weighted asset deriving from the business dynamic. The difference can be €1 billion, €2 billion, but not more than that.

This is reassuring in relation to the capacity of the group to keep on generating capital, and this on an ordinary basis. Then, as highlighted by Andrea, commenting, let's say, the full consolidation of Commerzbank and the relative capital efficiency, then when this capital efficiency will kick in, that is an extraordinary booster to the capital generation of the group during the course of '27 and '28.

Morning. A couple of follow-ups, please.

Firstly, just coming back to the last question. When you previously gave the guidance at 50% ownership, I think it was for 280 basis points.

If you take the cancellation of the €4.75 billion buyback deduction, take that on the consolidated RWA base, that's about 100 bps of relief. That gets you to 180 bps.

Just to confirm, the difference between that 180 bps pro forma prior guidance versus the 200 bps today is this PPA and timing difference related to the organic capital generation and goodwill. Firstly, I just want to clarify that.

Then the second question, just on the pull-forward of the synergies, an extra €400 million to be recognized by 2028 as opposed to 2030. What do you need to achieve that pull-forward?

Can you do it before going to an AGM and replacing the supervisory board and listing the new management team for Commerzbank? What drives that extra pull-forward?

I'm thinking about your alignment versus integration point. Thank you.

The short answer on your first question, the 180 basis points is correct. Indeed, we have told you that the timing difference is 20 to 30 basis points, we are slightly under what we thought it would be.

Actually, if it went all the way into the second quarter, we would be even more under what we thought it would be because, the time passes, we get more benefit. That is capital.

Obviously, as time passes, we take control and we consolidate later, and therefore, it takes me to your second question, we realize the value creation later. I think what we are assuming at the moment in giving you the numbers that we're giving you is that we obtain the authorization and we would be able to indicate the action and for Unlocked to be executed with determination from January 1, 2027.

What do we need for that to occur? We either need alignment with all parties and execute, or we are in a position to call an EGM and exercise the control through the calling of an EGM ahead of the AGM in May.

We would do that if that's necessary, but our expectations are not to having to do that at the moment. If we have everybody on board and on the same direction, we think that from January 1st, the bank should be directing towards executing the pillars of Unlocked, hopefully adjusted for a constructive, detailed conversation on all the things that we'll probably have missed from an outside-in and that we can benefit from by talking to the people involved.

I hope it's clear.

morning to everybody. A question on the capital.

Is it fair to assume that 100 basis points of impact on the CET1 is a kind of worst-case scenario today? If we move 2, 3 years down the road and we do assume the consolidation of Commerzbank, what would be the pro forma CET1 ratio or the impact on your capital in case of merger with Commerzbank, regardless of the capital generation that you would make in between?

Because at the end of the day, what you are saying today is that by 2030 your ambition is to merge Commerzbank with UniCredit. Another clarification on the CET1 ratio: I was wondering whether the above 13% CET1 ratio just after the consolidation of Commerzbank, whether it's going to be Q4 '26 or 2027, already incorporates the impact of the mandatory convertible that you have announced today.

That's my first question. The second question is just a clarification on the synergies.

You have basically increased by 50% the synergies from €800 million to €1.2 billion pre-merger with Commerzbank. You mentioned before that this is mainly due to non-HR-related costs, you mentioned procurement, you mentioned the trade finance, you mentioned the foreign franchise.

Is my understanding correct that these increase mainly related to these areas? Thank you very much.

Okay.

These 200 basis points are I don't know if you want to call it the worst-case scenario, probably is. It is what will occur if we do consolidate line by line by the end of the year, okay?

If you want to call it worst-case scenario, as we said, if it slides, it becomes less, okay? Stefano has given you an idea, 20, 30 basis points less, okay?

This is point number one. Point number two, over time, if you assume we're not assuming, but if you assume that we increase our participation above 50, you know that we have a 80 basis points friction on capital linked to the fact that, under European regulation, the excess capital to minimum for minority shareholder is not counted in the total capital of the acquiring bank.

Obviously, if we were to increase our position, that 80 basis points would proportionally go down. That's if we were to increase the position, you would have a benefit through that.

That's the second point. The third point that is not linked to any of those two things is that as we land around 13%, as we deleverage Commerzbank, and post having done the integration cost and the investment necessary, the acquisition will generate substantially more capital than UniCredit standalone would have generated.

Why? Because we're deleveraging a very significant franchise under our umbrella.

Therefore, regardless of the 200, regardless of the 80 basis points, regardless of that, the, call it organic capital generation of the group, and I think not many people have picked up that, going beyond '27 is going to come up very significantly, which is one of the reason why we're indicating to you that the distribution for UniCredit consolidated in '27, '28, '29, '30 will improve materially, is linked to that also. This is for capital, and let me know if you got all of that, and otherwise we can get you more information.

The 13% CET1 area we're saying because it's not that precise given that PPA is flip-flopping because of rates and the shape of the curve, post-CBK consolidation does not include anything but what there is today, okay? It include where we land at the end of the year, number one.

It includes the consolidation line by line of Commerzbank, number two. It does not include the conversion of the physically settled TRS.

Obviously, if we were to execute it, we won't, in cash, it would be dilutive to that number; if we are executing in shares, it would be neutral, plus/minus, to that number, okay? It does not include anything else with respect to tapping the US market, etc., etc.

This is an ability that we are, in inverted commas, acquiring to optimize our funding and our hybrid capital abilities into '27 and beyond, not before. Stefano will correct that, probably.

Especially because we are referring in this case to additional Tier 1. As I explained before by Andrea, the EGM is called in order to approve the issue of shares for a contingent convertible additional Tier 1.

Probability-wise, these shares are not going never to be issued. When we are going to issue AT1 is the same like issuing a euro-based AT1, there is no impact on the common equity Tier 1 ratio, but only to the Tier 1 ratio.

It would be part of the normal execution of our funding plan. Then

finally, your third question on synergies, yes, but not only. Non-HR costs are linked primarily to procurement, and they're linked to other optimization that we can do.

Procurement is a broad term because there are other optimization we can do in technology, in AI, and in a number of things. We have also said that what we can do in inverted commas quickly is optimizing head count outside of Germany, internationally, and also optimizing nearshoring centers.

The reason it has moved, and most of the move, if you see, is revenue-based, is, number one, a more aggressive view on how fast we could deploy our factories within Commerzbank and make them benefit from those. We have a pilot with Alpha, we see it on our banks, we're assuming an alignment, and we can do that quickly.

That's on the revenue side, mostly. On the cost side, it is procurement, and it is some HR outside and some HR in nearshoring centers if we're able to extract synergies.

This is what has changed, and we have just front-loaded what we thought we had to wait for merger to do, because now, in our experience, we can do them earlier.

Thank you very much. Very clear.

Before I close, I would ask you to join me in congratulating Iacopo, who is now formal head of IR of UniCredit. He has survived a quarter, and that's a lot to be said.

Thank you very much to everybody for listening on the call, and we'll see you in the roadshow. Thank you.

Bye-bye.