Good afternoon, and welcome to our first half results conference call. First half results are the best ever, with net profit at the highest level, €279 million, total assets at highest level, €121 billion, and net inflows for the first half at the highest level ever, €4.4 billion.

Focusing on the net inflows, the quality has been improving over time, and we are very confident to keep going with this quality thanks to the strengthening of our asset management hub and the new release of products. Let's start, as usual, from numbers.

Page 4, net profit accelerated in Q2, as I said. In the first half, the overall results €279 million; in the first half, 152.

This number comes from an acceleration of both the components: recurring net profit at €180 million, and the variable net profit at 43.6. If you see the variable net profit, you can see that there is a one-off of €20 million, a tax charge.

This is due to the application of the standard corporate taxation in Luxembourg for our asset management company, following the current unavailability of a tax benefit for the asset management company. We will see it later.

Page 5, now we'll go through the revenues components, starting from net financial income. Overall net financial income closed at €97 million, or 189 in the first half.

Again, also in this case, the good results come from positive contribution by both components: net interest income slightly higher, 84.8, and a higher contribution of trading gains and others thanks to the significant contribution from Intermonte. Overall, the total net interest margin closed at 1.96% that is in line with our guidance.

Page 6, the other component of revenues, total gross fees. Second quarter, €393 million, overall first half 741.

While the variable fees, you see the acceleration in the second quarter thanks to the positive market trends and the great quality of the investment strategies. Overall margins for gross recurring fees is in line with the previous quarter at 107.

Focusing on the recurring components, you have two different parts. The first one is about investment fees.

Here you see a double-digit growth. In particular, the second quarter was very strong at 258, and here the results is the sum of an acceleration in advisory fees and an acceleration of management fees, both at double-digit growth.

In terms of margins, here you see a pick up of the margins at 1.44%. This is basically driven by the positive trend of the markets, but we stick to our guidance of margins at 1.4% and 1.42% for the mid-term.

Page 8, the second component of the recurring fees, that is about other fees. Other fees were very strong in the second quarter, €46 million, and as a overall result for the first half, above €90 million.

Again, here we had very strong entry fees thanks to the excellent work in product placement, structured products, strong results also in brokerage commissions thanks to solid activity of both retail and corporate clients. The last but not least, you can start seeing a pickup also on the banking fees.

Overall margins on other fees pretty stable over time at 0.16%. All the revenues components grew at double-digit growth, while the cost is greatly in line with our guidance.

Let's start at page 9 with the payout ratio. Overall payout ratio slightly lower than the targets announced.

Payout ratio FA's ordinary payout at 35.5%, I remember that the guidance here is 36%; cost of growth below 12%, at 10.5%, excluding a positive one-off; and the overall payout to third parties close to 6.2%, in this case excluding a negative one-off, and the 6.2% is broadly stable in line with the second quarter of the previous year for some seasonality. Again, very solid steering of the cost of the network, and we continue to share the revenues with the targets we announced.

Page 10, you see the operating costs. Here we are slightly higher compared to the guidance of 6%-8%, and this is basically driven by the acceleration of all major projects.

We have, as the Insurbanking, and I will give some numbers on Insurbanking later, Intermonte is going very well, as well as all the project linked to artificial intelligence. In the non-recurring components, you see a spike at €5 million, and this is basically all investments for future growth.

Are about advisory to scout the markets, to think of the strategy for the next years, is the typical one-off when you are close to the launch of a strategic plan. Page 11, operating leverage.

In terms of operating costs on total assets, we achieved the best results at 0.27%, and also all cost-income ratio measures are in line or better than expected. Closing this first part of presentation, page 12, very solid results in the core components, very solid operating lines and results.

Below operating lines, you see an improvement for the normalization of some one-off. About the tax charges, the €20 million, thanks to the positive discussion with the Luxembourg authorities and the initiatives in our asset management hub that we will explain in the business update part, we are confident to reabsorb this spike, and we have a guidance, medium-term guidance, by the end of 2028 around 27%-28%.

Last bullet, you see the contribution of Intermonte, strong acceleration of the overall results, €6.2 million of net profit, impressive the synergies, revenue synergies already close to €8 million on a target for the first half in the range €10 million-€15 million. This is in great part thanks to the structured products, some sub-advisory mandates in asset management, and we will see further improvement both in this part of the business as well as in the M&A activities.

Now moving on to next section, balance sheet, page 14, starting from the total liabilities, everything is pretty stable. Due to the strong activity in asset management in the second quarter, you see the client deposits slightly higher, from €13.9 billion to €14 billion, the second half.

Cost of funding slightly higher, 0.77%, in line with the trend of the interest rates. Page 15, on total asset side, also here pretty stable numbers.

Overall interest-bearing assets at €17.1 billion, with the yield on these assets slightly higher at 2.73%. Last page of this chapter, page 16, we have capital and liquidity ratios.

Also here, very stable numbers: total capital ratio at 19%, leverage ratio at 5.7%, and liquidity coverage ratio and net stable funding ratio well above the threat requirements. Now let's move on the assets, recruiting and net inflows part.

Page 18, the usual presentation we introduced in the first conference call of this year about total assets in which we give also the trend of Insurbanking business. You see the histogram.

The €121 billion, as I mentioned, the highest level ever of total assets, BG total assets, while the 7.9 billion is about Insurbanking, the assets that we advise and manage directly in the insurance products for Alleanza clients. Referring to Alleanza, I mentioned before, we are very confident with numbers and with this project.

We have just completed the rollout of the banking offer to the private advisory network, we completed it in June of this year. If you look at the numbers of current accounts, we exceeded 5,000 current accounts in the first half, and we confirm the target of at least 15,000 current accounts.

For the Insurbanking business, we closed the first half with more or less €200 million of net inflows on the insurance wrappers for a total €360 million since the beginning of the partnership. Also in this case, we confirm to exceed half billion euro for the end of this year.

Our feeling for this project is very positive, also as on the territory we see great collaboration between the Alleanza network and the managerial structure of Banca Generali network. We're just at the beginning of the journey, with exciting feedback from Alleanza network.

Page 19, we focus on the total assets of BG clients. First time, as I mentioned, we exceeded €120 billion.

If we focus on the left, you see that the overall advanced advisory fees business exceeded €13 billion, and you see a constant increase of the weight of advanced advisory fees on total assets, now they account for 11%. At the right of the page, you see the presentation of total assets by three categories.

More than €80 billion 80 €80 billion generate recurring fees, and the major increase is about the managed solutions, €56.9 billion. Let's focus on this €56.9 billion, page 20.

Here you see the impressive acceleration of in-house products. Now in-house products account for more than €30 billion or 53.2% of the total managed solutions, and you see an increase of 2.5 percentage in only one year.

This is thanks to the excellent work of the portfolio managers for the financial wrappers and the introduction of protection in the fund offer. Now moving on from total assets to total net inflows.

As I mentioned at the beginning, record level of net inflows, €4.4 billion. I'm at page 21.

You can see that asset under investment account for €2.1 billion, and the greatest part comes from the managed solutions, 1.9. Again, the major contributor of this 1.9 is about in-house products, with more than €1 billion in in-house funds and €400 million in financial wrappers.

It's not just about the quality of these inflows, but also the contribution of the different distribution channels. In particular, page 22, the existing one, our existing colleagues, exceeded the results of last year by almost 50% or €1 billion, moving from €2.2 billion to €3.2 billion.

You see also the recovery of recruitment, with a total contribution of €1.2 billion, or 50% higher compared to the last year, and also higher compared to two years ago. I'm sure that more will come in the second half.

Why? As we are accelerating the recruitment activity, we are already on board of 106 new colleagues.

What impress me more is the part coming from private banks. You see the number, 33, that is the highest one.

This is also thanks to the proposition with Intermonte. Now we are able to attract also private bankers with specific competencies in the corporate advisory business.

Now, the business activity is very sound, well distributed on the field, and as I mentioned, the quality is pretty impressive, and I'm pretty confident to see this quality also for the second half of the year, as we are investing a lot on our asset management hub and on product innovation. Moving on page 24, you see the structure of our Banca Generali asset management hub.

We have three major components: Luxembourg platform, and in the Luxembourg platform, here basically we provide funds, private markets, and multi-asset solutions, but it's all about SICAV and funds. In the middle of the page and of the presentation, you see our Italian capability, our investment hub.

Here we are probably at the best player, or among the best player, in managing personalized financial wrappers. Now we can leverage also the Intermonte capabilities.

Then Investlinx. Investlinx is an Irish platform.

We closed this deal to enter the active ETF industry, but Investlinx has also a license for fund business. We have greater flexibility in deciding where launching new initiatives, also for the single funds and common funds business.

Page 25, you see any major achievements for these three blocks the first half of this year. Starting from the left, our Luxembourg platform, these numbers are as of the 25th of July, there is some numbers also realized of July.

You see that the overall net inflows for funds industry in Luxembourg, retail business, is around €1.4 billion, of which 1 point €1 billion in the new family of protected funds. These initiatives were launched with top investment banker players, US investment players, as J.P.

Morgan, Morgan Stanley, or Bank of America. The proposition invest in equity, protecting the downside, is working very well as offering a predefined coupon.

Regarding the Italian offer, the financial wrappers, here you have two different businesses: the personalized financial wrappers, for top clients, and where we are performing very well; and then also in this phase, we launched protected solutions in partnership with Intermonte for the hedging strategy, and here we exceeded €200 million. Part of the synergies with Intermonte comes from this business.

Last but not least, we have just signed the contract with Investlinx, and we already launched the first active ETF, is an ETF focused on small-medium enterprise in Italy. You are very quick and flexible in launching a niche initiatives, niche ETFs.

This show how flexible, dynamic, and fast is this kind of platform to be in the market with a new initiatives. Thanks to these three different blocks, we are confident to maintain great flexibility for the second half.

We have pipeline of very strong product offering, and you will see during our strategic plan how we are sure to leverage all the three platforms to excel in the asset management industry. Last but not least, page 25, some guidance for this year.

You see on the net inflows, in particular, we increased the target of total net inflows from a target of higher than €6.5 billion to an average of €7.5 billion. We confirm positive trend also for July, where we are confident to exceed half billion.

In terms of target of product mix, we confirm to exceed €4.0 billion of asset under investment. Second block, you see targets in terms of margins, cost, and tax rate.

In first column, you see how we close the first half, and then you see the guidance for the medium-long term. We are confident to stay in the range 1.4-1.42 for the management fee margins.

As I explained, now we have some positive effect from the positive markets. Core operating costs, we confirm long-term guidance to stay in the range 6%-8%, with this spike in first half of this year and probably also the second one as we want to accelerate all the projects for future growth.

Then the tax rate, as I mentioned, you see the spike at 30.5% for this first half, but we are confident to absorb great part of this spike, and we give a new guidance in the range of 27%-28% for the mid-term. Now the presentation is concluded, and I will hand over for the Q&A session.

Thank you.

Hello, I've got a few questions on my end. You guide for margins at 1.40, 1.42 over the medium term.

Can you just remember us what gives you confidence that this will remain solid in the future and that you won't face further pressure on these margins, perhaps driven by competition, and so on and so forth? On the NII, first question: can you remember us the average balance in the current accounts opened under the Alleanza partnership?

Another question on NII is around the deposit costs that saw a pickup in the second quarter. Is the repricing now done, and what do you expect from here on this front?

Last question on the guidance: you didn't upgrade AUI inflows. Obviously you have an open-ended type of guidance here, but it seems that even annualizing the first half, which is anyway weaker seasonally, you are already at 4.2.

Do you think a 4.5 billion is too far as a target? Thank you.

Thank you, Marco. Let's say that if you think of margins in asset management, we have different levers to compensate any downward pressure.

For example, we have the highest exposure in traditional life insurance products where margins are definitely lower. We are among the most exposed to third-party funds, and also in this case there is room to internalize part of margins.

Then there is the partnership with investment banking and Intermonte where we can increase margins on the underlying. For all these reasons, we are confident to confirm the target 1.4, 1.42, considering also that now the level is a little bit higher.

Consider that in this 1.4, 1.42, there is also the Insurbanking business activity. Second, net interest income, at the moment the contribution of Insurbanking on the deposits is pretty low, is in the range of €20 million-€30 million.

We've just started with opening the current accounts, we are just at the beginning. At the moment is all about Banca Generali clients.

For the pickup in costs, I will hand over to Tommaso.

Let's say that pickup in costs operating costs are more linked to the investments that we are going to make in the IT platform, especially in us in in AI. Then we have also some specific investments for the Alleanza project that have been in any case accounted in the in the in the first half.

We expect also that in the second part we're going to to have let's say continuing on on investing. That's why we see that for this year we will have a spike in operating costs, with a guidance which is a little bit updated, we'll be basically between 8%-9%.

We expect to have a second second half in line with the first one. At the same time, we expect that going forward we can meet the 6%-8% guidance, which is the medium term that we have always given to the market.

This is where where we are, and that's all.

Last, just to answer your question about net inflows, why we have risen the targets for net inflows not for the product mix, we said that here there is a conservative view on the trends of the markets for the second half. We are not confident to see the same markets as the first half, to be more conservative, we prefer to confirm the guidance in terms of mix that depends also in part from the markets dynamics, while on the net inflows we see very strong trends both for the existing sales force as well as for recruitment, even in, let's say, more volatile markets, we are confident to overdeliver compared to the targets at the beginning of the year.

Thank you.

Thank you. Just if you can follow up on the deposit costs, because in terms of costs, I meant what happened in the deposit costs Q-on-Q and what do you expect from here?

Thanks for all the answers.

Deposit costs, let's say that the evolution is linked to the beta of our deposits. Let's say that we have the 35% of our deposits which are linked to the Euribor evolution, Euribor one-month evolution.

That's the part which is going to follow the evolution of the markets. We expect so in the next quarter to have a small increase in terms of interest rates.

We expect that the Euribor six-month will increase around 30 basis points in the last quarter, especially we expect in the last quarter in the fourth quarter of this year a spike in interest rates, this is going to give, let's say, an increase in terms of cost of funding of some basis points that we expect to have in the second quarter, but something which is already, of course, implied in our guidance, which we have confirmed between €335 million and €345 million. Let's say that we are more sensitive in term of net interest margin evolution more to volumes that to interest rate change because we have, let's say, also for ALM purposes, now let's say a sensitivity to interest rate lower, and so we are more sensitive to what is the balance sheet dimension.

You can see that in the last months we had lower growth in the, let's say, in the liabilities, in the deposits, because we had increased the net inflows in managed assets. We have to also understand what will be the part of the investing of our clients in the next months to understand what will be the full impact in net interest margin.

We have base our guidance of stable volume or slightly increasing. To cut a long story short, we haven't changed our way to pay back to the clients, and we have the assets that has a lag to update the value in line with the new scenario of the interest yield.

We have a duration below two years, it takes a little bit more to adjust the assets and the liabilities. Nothing has changed.

Thank you very much.

Hi, good afternoon and thank you for taking my question. I have three.

The first one is on net inflows, if you can anticipate some details on net inflows for July. The second one, on the tax impact, you mentioned that you expect a return to the 27%-28% range by 2028, could you provide us some more precise guidance on tax rate for second half and 2027?

The last one, on performance fee, could you give us an indication of how many AUMs are close to their high watermark and assuming stable markets between now and the end of the year, how much in performance fees can we expect? Thank you.

As I was mentioning, in terms of net inflows for July, we are confident to exceed half billion. The quality in terms of asset under investment is higher than in the past, also July is pretty strong month, especially in advanced advisory services, but let's say that in more in general terms, the asset under investment component is doing well.

Second, in terms of tax impact, as I was mentioning, we are in discussion with Luxembourg authorities. My feeling is that Luxembourg will change the framework to incentivate asset management in Luxembourg.

Whatever the decision of the Luxembourg authorities, as I showed in the business update session, now we have great flexibility in organise our asset management strategies, we are confident for these two main reasons: positive discussion with Luxembourg, and more flexibility in our asset management platform. Then Tommaso will give you some projections.

In terms of performance fees, let's say that we still have important part of the assets that are close to the high watermark. I would say that we are around let me check this number around €5 billion very close to the high watermark.

Tommaso, for the tax impact, please.

For the tax impact, we expect to have a gradual reduction in Luxembourg, we will think that starting from 2027 so from the next year, we will have a positive impact because in Luxembourg there are two components in terms of taxation: one is the corporate tax, the other one is the sort of municipal tax, which is the one that we expect to go down according with the discussion that we had with the ministers. We expect to have a full taxation in this year.

We don't know if we will have a positive impact or we cannot confirm if we can have a positive impact in the next quarter, but starting from 2000 and for the next year, we will have a progressive reduction. Then we have, on the other side, the possibility also to manage and to, let's say, strengthen our presence in Ireland, and so to have basically also from this contribution a positive impact on the total tax rate of the group.

Thank you.

Yes, hi. Good afternoon.

Two for me, please. The first one is on the net provision for risk and charges.

It was a very low number. I was wondering if it was the reversal of the prudence you showed in Q4, or it is a new run rate, and if you can give us a guidance of where we should put provision for risk and charges for full year '26?

The second is on custody and in particular on certificates. Just a curiosity for me, I was wondering if in Q2 you issued plain vanilla certificates or you are now pretty active on AMC, on the actively managed certificates, and if so, if Intermonte is a strong contributor to this business line?

Thank you.

Thank you. For the provision, I will hand over to Tommaso.

Referring certificates, at the moment numbers don't include AMC. We are working with Intermonte on some solution with the protection for the client, and in the second half we will extend the contribution of Intermonte also on the other kind of certificates.

For provisions, Tommaso? On the provision, we expect, of course, that in the second half will be more or less in line with what we have done in the first one.

For the full year, we expect to stay around €50 million, including also write-off and the contribution to the funds, excluding, of course, exceptional items that at the moment we don't have in mind. Of course, there is a benefit if we compare what was the run rate in the previous year, but this is our expectation for the current year, around €50 million overall.

Thank you. Thank you very much.

Thank you for participating in our conference call, and let me finish by wishing you all a great summer.