Unicredit — Call Transcript 2025

Good morning, ladies and gentlemen. Before I hand over to Ms. Magda Palczynska, Head of Investor Relations, a reminder that today's call is being recorded. Madam, you may begin. Good morning, and welcome to UniCredit's third quarter and nine-month 2025 results conference call. Andrea Orcel, our CEO, will take you through the presentation. This will be followed by a Q&A session with Andrea and Stefano Porro, our CFO. As always, please limit yourself to two questions. With that, I hand over to Andrea. Good morning, and thank you for joining us. Today, I am proud to present our record third quarter that completes the best nine months in our history. These outstanding results have been delivered thanks to our people. Their professionalism, ownership, passion, determination, and search for excellence are the foundation of everything you will hear today. Our message is simple. UniCredit is about sustainable, best-in-class performance today while steadily building for tomorrow, all supporting best-in-class sustainable shareholder remuneration. We remain proud of what we have achieved and confident in our future trajectory because our strategy works and our execution is unparalleled. This is true across every region and business we operate in. These results mark our 19th consecutive quarter of quality, profitable growth, and a clear beat across net revenue and all its core components: cost, capital, net profit, and return on tangible equity. It is a quarter that defines great performance, great prospects, and great returns for our shareholders today and over time. We have reinforced our double-digit growth trajectory in EPS, in DPS, in tangible book per share, while maintaining a return on tangible equity above 20%. We confirm our dividend and share buyback guidance. We continue to grow in a quality way. Net revenues are up in the quarter and broadly stable over the nine months. This is remarkable given the challenging macro environment in which we are operating. It shows that UniCredit is capable of growing through the cycle, supported by an increasingly diversified top line that remains highly resilient and will quickly pick up as soon as the impact of a rates decline is absorbed. Costs continue their downward trajectory, supporting a best-in-class cost-to-income ratio. Capital efficiency remains excellent, with a top-tier net revenue to RWAs. Net profit is up 4.7% in the quarter and 12.9% in the nine months, all at a 22% average return on tangible equity. All our asset quality metrics remain solid and stable. Net NP decreasing, cost of risk contained, with no signs of credit deterioration. Overlays intact at €1.7 billion, or 40 basis points of yearly cost of risk. A further defense against any future deterioration of our strong asset quality. CET1 ratio remains well above our target range and among the strongest in Europe. Liquidity remains sound, with LCR above 140%. Net profit guidance for 2025 remains at €10.5 billion, although we are now considering management actions to be expensed in Q4 to further propel our future result, mostly from 2027 onward. These actions are focused on investment for growth rather than investment on efficiencies as they were in the past. The early deployment of €6.5 billion of our excess capital and absorption of related upfront costs will add €1 billion of net revenues and net profit by 2027, growing from there at a fixed capital consumption and largely protected by put options. Residual 2024 share buyback of €1.8 billion will start by the end of October and as early as the end of this week. €9.5 billion in dividends and share buyback for 2025 are confirmed, with an interim dividend of €2.2 billion paid on 26th of November. Ordinary distribution policy from 2026 onward of 80% of net profit is confirmed. This is practically equivalent to the 90% of previous net profit that did not include the impact from investment. Such ordinary distribution may be complemented by excess capital return evaluated yearly, as we did in the past. The Italian government has released a draft bank levy. It is premature to assess its impact as it is still under discussion. UniCredit will dilute any hit thanks to our geographic diversification. As always, we will do our best to minimize its impact on UniCredit, our shareholders, our people, and our clients. We will release more detail once this is finalized. Our performance this quarter further strengthens our unique equity story, one of the most compelling in European banking. We're delivering beyond what we promised. We have further strengthened our earnings and dividend and capital deployment trajectory as we accelerate the execution of our winning strategy, building even greater confidence in the sustainability of our performance. Our equity story is rooted in our DNA of excellence, something that sets us apart from our competitors. It enables us to deliver consistently in the short term while building long-term sustainable value for our shareholders. This performance gives us a foundation and the confidence to outperform in phase two of our strategy, accelerating growth, driving efficiency further, and innovating to meet the challenge of fintechs. Our capital allocation decisions are a core element of our equity story and remain measured, disciplined, and entirely aligned with the objective of long-term value creation. This year, we have deployed €6.5 billion of excess capital, well ahead of our plan, in a way that enhances our standalone trajectory and grants strategic optionality. The equity consolidation of our stakes in Commerzbank and Alpha Bank, following the internalization of Life Insurance in Italy, the combination with Alpha Bank in Romania, and the acquisition of Vodeno Ion delivers significant immediate value and improves our geographic and client mix. This capital has been deployed at an approximate 20% return on investment, roughly twice the current return on our share buyback and around 2.5x the implied return of purchasing Commerzbank or Alpha Bank shares at current market prices. We're securing structurally higher net profit through the cycle, propelling sustainable higher dividends and share buybacks, with per share and return on tangible equity trajectory at the top of the peer group. We confirm 2027 guidance for net profit to well above €11 billion. We have combined preparation with opportunity and seize the right moment to maximize shareholder value. Distribution can reach shareholders in two ways: directly through dividends and indirectly through capital deployment that in turn enhances future earnings and dividend per share. Dividends remain sacrosanct. Real cash returned directly to our shareholders, generating an attractive dividend yield. Capital deployment, putting aside business growth and M&A, can take two complementary forms: share buybacks and share buyouts. Strategic. Both create value, increasing earnings and dividend per share. The difference lies in how they do it. Share buybacks reduce the denominator; share buyouts enhance the numerator. If we compare the position before and after our €6.5 billion share buyout, we have significantly increased the total value created for shareholders, above and beyond what was expected and would have been possible with share buybacks. Above and beyond the significant improvement in the underlying performance, the equity consolidation of our stakes has further strengthened our outlook for 2026, 2027, and beyond. Based on Commerzbank and Alpha Bank earnings, consensus, and net of hedging cost, we expect around €1 billion contribution of fully distributable net profit by 2027, thereby significantly improving our net profit, return on tangible equity, EPS, DPS, tangible book value per share, vis-à-vis what was previously expected. Our change in distribution policy is a natural evolution in our journey. Previously, we guided on total distributions, including excess capital, at equal or above 90%. From 2026 onward, with excess capital now aligned to our best, strongest peers, we're guiding to ordinary distribution at 80% of net profit, with excess capital return to be evaluated yearly. This change enhances value for shareholders. The 80% ordinary payout applied to a CERC at 10% higher earnings and organic capital generation. Hence, it is practically equivalent to the 90% before. Any excess capital return or deployment is on top. Shareholders now gain greater quality, clarity, and predictability and greater dividend versus share buybacks, with future distribution more underpinned by sustainable profitability rather than extraordinary return of excess capital through share buybacks. Our DNA truly sets us apart. It defines who we are, how we perform, and the attraction of our differentiated model. It is built on three essential elements that together make UniCredit unique in Europe. We are the pan-European leader, uniting 13 banks plus one, leading in their markets. Institutions that in most of our markets are not only leaders but often synonymous with banking itself, and more than 20 million clients to whom we offer best-in-class solutions and a single gateway to Europe. We have harnessed this unique pan-European model, maximizing local empowerment while leveraging our combined scale in strategic partnership, in talent, in technology, in data, in AI, in product factories, in procurement, thereby making the group much more valuable than the sum of its parts. In doing so, we have achieved our ambition for UniCredit's model to become the benchmark for banking in Europe, redefining what best-in-class across profitable growth, operational and capital efficiency, distribution, and strengths look like. We innovate, striving to anticipate market trends, continuously investing in people, in technology, data and AI, products and distribution channels, aiming to lead in the future while delivering short-term results. These three elements: pan-European leadership, benchmark for banking, and innovation form our DNA. They are the foundation on which we deliver today and build for tomorrow. Together, they are what makes our outstanding performance sustainable and what provides us unmatched ability to create value to other banks that wish to join our group. The first strand of our DNA, the one that makes us truly unique, is our pan-European nature. Our strength lies in our ability to bring together more than 20 million high-quality, loyal clients through our 13 plus one leading commercial bank, with commanding market share in the most profitable and value-accretive segments in each market. We do this through a common vision and strategy, supported by shared product factories, increasingly shared technology and data platform, shared procurement, and the strengths of a combined balance sheet. We have created a scale advantage for all our banks, enabling them to leverage the group. At the same time, they use our pan-European network to offer unique products and services, from trade finance to cross-border flows, on a level that few can match. This combination of scale, connectivity, and client quality makes UniCredit the partner of choice across Europe, a competitive edge that is difficult to replicate. That advantage translates directly into irreplicable and resilient revenues, quality and AIN fees, and a strong foundation for future growth. Because of our success in truly leveraging our European network, the second interconnected strand of our DNA is that we are and strive to continue to be a benchmark for banking. Over the past few years, we have identified and executed a transformation blueprint that many thought impossible and now many are trying to replicate. We have shown that a large multi-country, complex institution can be simplified, can be empowered, can be brought together, and made more efficient and more profitable than others. In the first phase of our transformation, we unified the group under one purpose, one vision, and one set of values. We empowered our banks and our people, simplified our structure, and strengthened our ownership. We rebuilt the trust and passion critical to making the impossible possible. We increasingly leveraged our scale by integrating partnership, digital and data capabilities, procurement, and product factories under one common model. We invested in our people, in our technology, data and AI, product factories, and distribution channels, building the capabilities and infrastructure needed for long-term success. This transformation worked and is still ongoing. We delivered sector-leading efficiency both in how we operate and reward capital, while securing top-tier net revenue growth and moving our return on tangible equity from the bottom of the pack to the top. Our shareholder returns have been among the best in Europe. Such was the success of phase one that we were now able to seamlessly move to phase two, continuing to execute our multi-year transformation blueprint. Phase two further emphasizes the focus on the front line, on the top line, accelerating our profitable commercial growth in a targeted fashion while continuing to improve our operating model. We're moving forward with a clear set of initiatives, all designed to drive quality, scale, and long-term value. Our focus is sharper, our execution is faster, and our ambition is higher. We're directing capital and resources towards the most attractive opportunities, the right geographies, the right client segment, and the right product areas, ensuring every euro we invest delivers the highest possible return. We're expanding our product factories, deepening integration between them and our commercial banks, and capturing more of the value chain. We're accelerating in SMEs and private and affluent, where our franchise is strongest and our potential greatest. At the same time, we're transforming how we serve clients, moving decisively towards an omnichannel model that seamlessly combines physical and digital, giving every client the best experience UniCredit can offer. As always, our people remain at the heart of everything we do. We continue to increase the level of empowerment of our talent, the building of new skills, and the creation of an environment where innovation, ownership, and collaboration drive results. Phase two is about turning a proven blueprint into a compounding engine of growth, maintaining the efficiency, discipline, and strengths that define UniCredit today. The third strand of our DNA, the one that defines our future, is innovation. We're not only building the future of UniCredit, we're helping to shape the future of banking in Europe through our 13 markets. Innovation for us is not an add-on. It is a mindset, part of how we work every day, seeking to extract value from it. We have invested in a proprietary cloud-native core banking platform through our acquisition of Vodeno, bringing together best-in-class technology and AI, with scale to create a modern, agile foundation for the bank of tomorrow. We have brought in more than 200 outstanding engineers acting as an internal sandbox to support the modernization of our entire group. We are investing in data and AI at scale, using them to transform how we serve clients, how we manage risk, and how we operate, with over 140 use cases currently alive and many more in development. We continue to innovate in the way we serve clients, letting them choose among our omnichannel. As an example, Buddy, our digital branch in Italy, onboarded 300,000 new clients in the nine months, reaching almost 800,000 clients. We're also carefully but actively shaping the future of digital assets in Europe, combining prudence and responsibility with innovation as we explore new frontiers in tokenization, payments, and secure digital value. Our innovation is not limited to technology. In an environment of accelerated change, we're innovating in how we develop and reposition our people, our talent, in how we work and lead, empowering our people, promoting collaboration across borders, and creating an environment where ideas thrive and execution accelerates. Innovation is how we build the future for our clients, for our people, and for our bank. Crucially, this innovation is self-financed, made possible by the efficiencies and the profitability we have already achieved. The success of our strategy and our unique DNA are clearly reflected in today's results. We mark the 19th consecutive quarter of profitable growth, underpinning the best nine months in our history. It is proof that UniCredit has fundamentally transformed into a stronger, more resilient bank. We have outperformed across all key metrics, demonstrating consistent execution and the power of our model. Net revenues remain resilient, driven by better-than-expected NII, net of loan loss provision. We look at it that way, as NII cannot be separated from loan loss provisions. Robust fees, now including the internalization of Life Insurance in Italy, stronger contribution from investments that become a further core engine of our future net revenue growth. Trading, while temporarily affected by negative one-offs, still shows good underlying client-driven dynamic. These results underline the quality and increasing diversification of our top line. Operational excellence remains one of UniCredit's key differentiators. Cost fell again in the quarter and were broadly flat over the nine months, a remarkable achievement given the integration of new perimeters and continued investment in technology, people, and growth. Our cost-to-income ratio remains among the very best in Europe. Capital strength is confirmed, not only as an absolute number but also given our superior organic capital generation, now in line with net profit. Net revenues on RWAs remain strong. As a result, UniCredit's profitable growth remains best-in-class. Our top line remains resilient, with each one of its drivers performing better than expected. For the first nine months, net revenue stood at €18.5 billion, broadly stable despite headwind from lower rates. In the third quarter alone, net revenue reached €6.1 billion, up 1.2%. NII, net of LLPs, declined 4% in the nine months and 4.2% in the quarter, with cost of risk remaining benign at 10 basis points and gross NII performing better than anticipated at the beginning of the year. Margins were stable and loans grew circa 2% versus Q3 2024, end of period, partly offsetting the rates decline. Net NP and default rate both improved to 1.4% and 1.1%, respectively, confirming sound asset quality and coverage. We kept overlays unchanged at around €1.7 billion. NII ROIC at 19.2% remains best-in-class. Fees and insurance income, which benefited from the internalization of Life Insurance and strong investment product performance, continues to grow, reaching €6.6 billion for the nine months, up 4.9%, and €2.1 billion in the quarter, up 7.6%. Investment contributed €693 million for the nine months, up 84%, and €248 million in the quarter, up 64%, mainly from the equity consolidation of Commerzbank. While 25% of the contribution of investment is offset by negative trading costs hitting the trading line, from 2026 onward, they will significantly propel our top line. Together, all this reinforces the sustainability of our earnings mix with fees and insurance income representing a top-tier share of revenues. Trading performance of €1.3 billion for the nine months, down 10%, was negatively affected by one-offs from the mentioned equity consolidation. Trading was up 4% in the quarter. Underlying trading remains solid and client-driven. This diversified revenue base across products, geographies, and client segments ensures that UniCredit remains well-positioned to deliver quality growth even in a challenging environment. Our operational efficiency continues to set the benchmark. Costs were broadly flat over the nine months and in the quarter, fully absorbing the integration of Vodeno Ion, Life Insurance in Italy, and Alpha Bank Romania, as well as inflationary headwinds. Our cost-to-income ratio remains among the lowest in Europe at 36.8% in the nine months and 37.1% in the quarter. This reflects our ability to simplify, streamline, and automate while supporting rather than hindering our top-line growth. Our continued efficiency also allows us to invest wisely in people, in technology, in products and channels to make us ready for the future. This is a tested blueprint, streamlining where it matters, investing where it counts, and delivering operational excellence while laying the foundation for long-term growth without hindering present results. Our capital and capital efficiency remain best-in-class. Net revenue to RWA was broadly flat at 8.6% in the nine months and 8.4% in the quarter, notwithstanding the significant impact on NII from rates. Organic capital generation continues to be a key strength. We generated €7.9 billion, 283 basis points, allowing us to accrue 100% of distributable net profit as dividend and share buyback, most importantly, without denting our overall capital position. Our CET1 ratio stands at 14.8%, down 120 basis points due to the equity consolidation of Commerzbank. The regulatory impact of 14 basis points was almost entirely offset by other drivers. On a pro forma basis, our CET1 is down to 14.6% due to the equity consolidation of the 26.6% of Alpha Bank stake, partly offset by the Danish compromise impact related to the internalization of Life Insurance in Italy. We continue to deliver quality, profitable growth underpinned by strong operating performance, complemented by one-offs, with net revenue, cost, and capital all better than our expectations. We're not just growing. We are growing with discipline. Our model continues to prove its strengths, delivering growth, profitability, efficiency, and capital strengths, and outsized distributions all at once. Italy continues to be our quality earnings powerhouse, accounting for 44% of group net profit. Net revenues are down 1.7% to €8.1 billion. NII, net of LLPs, declined 5.1%, primarily reflecting rate normalization, only partially mitigated by discipline pass-through management and benign cost of risk at 22 basis points. Asset quality remains robust, with stable coverage and decreasing default rate. Gross and net NPE ratios were broadly stable at 2.7% and 1.5%, respectively. Adjusting for state guarantees and considering Italian overlays, the net NPE ratio of Italy drops to zero. NII ROIC remains strong at 23.2%, thanks to our focus on margin over volume and targeted origination. Fees and insurance income grew 4.7%, reaching a top-tier 42% of revenues, driven by investment products up 7%, the contribution of Life Insurance internalization, and benefiting from one-off incentive scheme effect on payments. Costs were down 1.7% to €2.9 billion in Italy, bringing our cost-to-income ratio to 34.1%, the best in the country. Net revenue on RWAs remained broadly flat at 10.4%, also the best in Italy. Profit before tax, excluding one-off, rose 2.4% to €5.1 billion, with ROIC stable at above 32%, reinforcing our market leadership. Italy exemplifies our strategy in action, focusing on quality, efficiency, and disciplined growth. Its performance underlines the strengths of our model and its ability to deliver across cycles. Germany continues to be a resilient anchor, accounting for 22% of group net profit. Net revenues are up 2.4% to €4 billion. NII net of LLPs grew 1%, thanks to discipline pass-through, the anticipated effect of trading normalization, and a decline in cost of risk at 14 basis points. Asset quality remains solid, with overlays broadly intact. Net NPE ratio is down to 1.4%, with stable coverage and default rate decreased. We keep strong attention to single file, given the corporate nature of our bank. NII ROIC remains strong at 21%, reflecting our focus on margin over volume and selective origination. Fees and insurance income grew 0.9%, reaching 31% of revenue, driven by investment products up 11%, partly offset by weaker financing activity. Costs were down 2.8%, bringing our cost-to-income ratio to 37.6%, the best in Germany. Net revenue on RWAs at 8% confirms strong capital efficiency. Profit before tax at €2.4 billion is up 7.2%, with ROIC at 23.4%, reinforcing our market leadership. Germany is a clear example of our ability to consistently deliver through disciplined execution. Its performance highlights the strengths of our diversified model, with resilience, efficiency, and capital discipline driving record profitability and reinforcing our quality leadership in the market. Austria continues to be a resilient anchor, accounting for 12% of group net profit. Net revenues are down 1.4% to €2 billion. NII net of LLPs declined 5.7%, only partially mitigated by loan growth at 1.3% at stable margin. Asset quality remains solid, with overlays intact. Net NPE ratio is down to 2%, with stable coverage and default rate further decreased. NII ROIC at 14% confirms disciplined origination. Fees and insurance income grew 5.2%, 8.2% excluding card complete disposal, reaching 31% of revenue, supported by advisory and financing and strong investment products up 10%. Costs were broadly flat, bringing our cost-to-income ratio to 38.9%. Net revenue on RWAs at 6.7% confirms strong capital efficiency. Profit before tax at €1.2 billion, down 3.8%, broadly flat excluding the new bank levy, with ROIC at 22.8%, reinforcing our profitability leadership in Austria. Austria showcases the power of our focused strategy, combining profitability, efficiency, and prudent risk management. Its performance confirms our ability to lead in corporate lending while maintaining exceptional asset quality and strong return. Central and Eastern Europe continues to be our growth engine, accounting for 22% of group net profits. Its role as a key profitable growth driver will fully emerge once its cost of risk fully normalizes. Net revenues are up 1.7% to €3.5 billion. NII net of LLPs declined 4%, the strong loan growth of 13.5%, including the contribution from Alpha Bank Romania, 8.5% without, was able to only partially mitigate the expected rates decline and Central and Eastern Europe cost of risk increase at 5 basis points from minus 25 basis points as it gradually normalizes. Asset quality remains solid, with net NPE ratio stable at 0.9%, growing coverage ratio at above 64%, and default rate stable. NII ROIC remains strong at 24%, confirming disciplined margin management. Fees and insurance income grew 13.3%, reaching around 29% of revenues, supported by broad-based contribution across countries, with particularly strong performance in advisory and investment products up 24%. Costs increased 12.4%, 2.7% on a constant perimeter, so excluding Alpha Bank Romania, bringing our cost-to-income ratio to 33.8%. Net revenue on RWAs at 8.5% confirms strong capital efficiency. Profit before tax at €2.1 billion, down 1.8%, with ROIC at almost 30%. CEE continues to demonstrate the success of our growth strategy, with broad-based momentum across countries and products. Its performance underlines our ability to scale profitably, diversify earnings, and deliver sustainable value across the region. Our Russian bank is now a highly focused franchise. Local loans and deposits account both less than 0.5% of group. Cross-border payments focused on now euro and U.S. dollar account for less than 2% of group. No cross-border lending exposure remains, and a positive liquidity contribution from Russia to the rest of the group still exists. We have achieved this significant reduction at minimum cost, both in the interest of our shareholders and in adherence to the spirit and law of sanctions. Our Russian bank is ring-fenced and operates strictly within all legal and regulatory requirements. This franchise is managed in a controlled and disciplined way, ensuring stability and compliance while minimizing risk. The exposure on CET1 from extreme loss scenario has declined from circa 130 basis points to circa 80 basis points, mainly connected to retained earnings. Client solution remains a cornerstone of leveraging group scale. Product factories that support our banks and our partners in delivering capital-light, fee-driven growth while also accelerating their NII from specialty areas. Net revenues reach €9 billion, up 7%, and fees €6 billion, up 4%, confirming the strengths and diversification of our product portfolio. Investment products delivered record performance, with fees up 9% to €1.9 billion and AUM and AUA up 14% to €186 billion. Our one-market funds reached €28 billion, up 68% year-over-year, supporting the internalization of almost 80% of our value chain still going. Insurance has become a major growth pillar, with fees and insurance result up 12% to €700 million. Following the internalization of Life Insurance, we are now the fourth largest player in Italy, with €46 billion in reserves. Payment fees were up 2%, also benefiting from timing of yearly incentive paid in Q3. In a segment affected by headwind, such as new regulation on instant payment, this is a great result. We are top three in four European markets in issuing and acquiring, and we're awarded Best Cash Management Bank in seven countries by Euromoney. Advisory and financing maintains a top three position in bonds and loans by fees in Italy and in Germany. Client risk management was up 13% and reached a return on allocated capital of 43%, driven by high-quality client-centric activities. Trade and correspondent banking remains a leader, with top three position in every country in which we operate and a cross-border market share five times higher than any domestic one. These factories are client-centric and scalable, a key driver of our unlocking acceleration strategy, enabling us to retain more of a value chain. In conclusion, we have delivered another record quarter, completing the best nine months in UniCredit history. This marks our 19th consecutive quarter of quality, profitable growth, and a clear beat across all our KPIs. Our strategy is working. We're leveraging our unique DNA as a pan-European leader, serving a high-quality client base through 13 leading banks and one partner, demonstrating the validity and the strengths of our unique model, as we also stand as a benchmark for banking. We're sustainably accelerating growth, well ahead to what we expected at the beginning of the year, relentlessly executing while continuing to invest and innovate for the future. We have reinforced our double-digit growth trajectory in EPS and DPS, intangible book per share, maintaining a return on tangible equity greater than 20%. This places us in a leading position now and in the future. We have reinforced our expected distribution with higher dividend and ordinary share buybacks, placing us again at the top of the peer group for the 2025-2027 period and beyond. UniCredit continues to create superior value for all stakeholders, delivering this quarter a great performance with great prospects and great present and future shareholders' returns, and it's today stronger, more resilient, and better positioned than ever. Thank you, and we will now open to questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Anyone who has a question may press star and one at this time. In the interest of time, we ask that you please limit yourself to two questions and one quick clarification point per caller. The first question is from Ignacio Ulargui, at BNP Paribas. Please go ahead. Thanks very much for the presentation and for taking my questions. I have two questions. The first one is focusing on loan growth and the kind of expectation of acceleration of growth that you see when you get a bit of a sense of how that trend is going in Germany and Italy particularly. The second question is on the potential measures that you might take for improving the P&L in 2026 and 2027. You could give us a bit of a sense of the magnitude of it and the focus because, if I understood correctly, you said during the call that it may not be that focused on cost, more on investments. I just wanted to get a bit of color about that. If I can make a final clarification on the distribution and share buyback, if I just look to consensus, consensus has around €13 billion of share buyback. Currently, if I just look to your numbers, you get €11.5 billion. Could that be breached through extraordinary distributions? Thank you. Okay. Let me start on loan growth. As we said, probably conservatively from the very beginning, to see significant loan growth at stable or improving margins, you need to see economic development, investment, and actual people wanting loans. If you push loan growth against the wall, you're going to reduce your margins. As we said many times, margins trump volume three to one. It may look quite good on the top line, but honestly, over time, you're denting profitability and it's difficult to recover. With that caveat and applying that discipline to how we grow, we're seeing significant progress in loan growth in Italy, and we believe that such progress is going to accelerate markedly in 2026 and beyond. Why that? For mainly two reasons. The main reason is that, like the rest of the group, we have almost completed all the actions to bring our loan portfolio to the profitability it has today, with a very marginal amount of loans still below EVA. Why is that important? Because in order to do that, we delivered what we delivered in the past, but we had a drag as we purged off positions that were not meeting our benchmark. We no longer have to do that. Look at what that means now. Secondly, post the withdrawal of our offer of BPM, we have gone back to the drawing board and re-examined the plan we were about to launch last year within the acceleration phase that we put on hold because of the acquisition or possible acquisition. That plan has been boosted, and we actually believe, and watch for space, that we will be profitably gaining market share next year in the country. That will drive a significant portion of Italy's results. On Germany, I would just say the usual same thing, but different. We have a bank that is focused. Obviously, there was no M&A situation there, and that is now well set after all the changes we've done in the business, in the operating machine, and in other places to grow profitably. We still see some headwinds from some competitors, if I may, damping on to achieve volume. We will not be drawn in that, but we believe that we can grow even without that, and we will demonstrate that that is possible. I am positive on that as well, and I am positive that in the target segment of Mittelstand, affluent, and private, we will be gaining growth or market share. In terms of potential measures to improve, first of all, why do we have these potential measures? We have potential measures because once we announced our phase two of UniCredit Unlocked acceleration, there were a few things that were different. Number one, our view on macro was more negative than it is now, having not on macro itself, but how we navigate macro. Number two, we did not have the extra boost that we believe we're going to have primarily in Italy, but also in the rest of the group. Number three, and most important of all, we had not witnessed what this franchise can do. If you go back to my comments, we were ahead of expectation in our acceleration in Q1. I repeated the same in Q2. I'm repeating the same in Q3. That gives me a lot of confidence that our acceleration can go further. As we go further in our acceleration, like in any acceleration, our businesses in the process of preparing the new multi-year plan, which is not approved yet, so I'm not anticipating anything, are requesting further investment in order to underpin that acceleration. There's only so much you can do with gains in efficiency, which, by the way, we will continue to make. To harness the acceleration we want, we need positive investment. How does it change? It changed that if you look at the past, most of our investment was targeted to efficiency, and we let the network, the client franchise run, and they did an excellent job. The action we are now considering for the rolling of a new MYP is much more targeted than before on top-line acceleration. It means you're going to look at hiring. Italy will hire in spades. Training. Italy will train in spades, so will Germany and the other countries. Digitalization of our omnichannel to make sure clients feel a seamless experience if they go to the branch, to mobile first, internet, Buddy bank, and I can continue, rather than pigeonholing them into a segment we think that that is the future. That requires continued investment. As you know, we've invested about €1 billion group-wide in modernizing our physical presence. We've invested another bunch in mobile first, in technology, etc. for our network. We will accelerate that. There are also some other levers that we can pull to further insulate group results from either adverse effect or accelerate them and that we are considering now. With the MYP of, at that point, 2026-2028, we will be reviewing and hopefully upgrading our ambition. In order to support that greater ambition, we will take on a year that honestly has some unknowns in it, some of that sunshine to further propel our future. We don't have an amount yet. We are taking from bottom up from every business and area what they would wish, and the commitment that they're making is still premature to discuss. It was correct to raise that possibility because now it is a possibility. On distributions, I would like to make the following comments because maybe I look at them in a different way than everybody looks at them. There is only one distribution that ends up in the pocket of our shareholders. That is called dividend. It's a cash payment that hits your account. When I do share buybacks, by reducing the share count on the same earnings, we are obviously accelerating the EPS and accelerating the DPS, again dividend, and accelerating my tangible book per share. It's an indirect effect on what gets in the pocket of my shareholder. When we have decided to take the moment and invest €6.5 billion today in the stake consolidation, we have done a few things that I think were not considered enough. Number one, our shareholders had a lot of uncertainty as to the timing of deploying our excess capital. Between now and the end of 2027, it could mean tomorrow, and it could mean December 31, 2027. Now, €6.5 billion are deployed, and that's it. We are going to start pumping from 2026 onward. Second topic, when you do share buybacks, as you know very well, you cannot anticipate at which price you're doing the share buybacks. As of today, it's 11% return on investment. Over time, nobody has any idea. It depends on where the share price is when we will execute it. However, by deploying €6.5 billion of our excess capital at a 20% return on investment, we give exact clarity on what the impact will be, and there is no going around it. Incidentally, that 20% is almost double what we would have gotten by doing the same amount of share buyback on our own shares, and it's 2.5x higher than what anyone who wanted to replicate what we have just done would extract from consolidating the same amount of shares in Commerzbank and Alpha Bank. We view the second leg called capital deployment as deployment, and I can deploy it in share buybacks, I can deploy it organically in the business, I can deploy it in M&A, or I can deploy it. Obviously, this is not recurrent, and we had an opportunity that we grabbed into strategic stakes that also give me strategic optionality that no other bank in Europe has. When I put it all together, what are the facts? The facts are that versus consensus of what we would have paid in dividend to our shareholders before we deployed in the 2025-2027 period, we are going to pay €1 billion more, and our dividend per share has increased its growth dramatically versus before. From a dividend standpoint, our shareholders are massively better. If I look at share buybacks, you are correct, they are going to be lower than what they were before, or at least consensus is saying that. They're saying that because €11.5 billion that consensus is giving plus €6.5 billion is almost €19 billion, not €13 billion. In effect, what we're saying is that we've generated so much capital that we could distribute or employ €6.5 billion at great returns and still give you close to the same amount of share buybacks you were going to have before. If you add the dividend amount and the share buyback amount, the before and after is very similar. Now we have €1 billion more revenues and €1 billion more net profit because of our investment. To finalize my answer to your question, could there be extraordinary distribution? Absolutely. We had a 16%+ CET1 before. We were on another galaxy to all the other banks. Incidentally, many believed that all that excess capital could not be returned this fast, hence the consensus. Now we are, let's take it to the end of a year, somewhere between the 14.5% area or slightly lower depending on the number of actions. We are still very high, but at the level of best-in-class competitors. We're no longer an outlier. We are at these levels. Our target CET1 is not 14%+. It is 12.5%-13%. Depending on how the business performs, how we see the deployment of further opportunity into our organic growth, which in turn will drive dividend and earnings. In terms of all of that, we will continue to trend down to 12.5%-13%, and you can do your calculation on what excess capital is that. If we don't find ways to deploy profitably in our organic growth, it will come back to you. We will tell you how much it is at the end of every year when we take a line on how well we have done and what our future prospects are. Last thing I would say is that if you look at the practice we had when we launched UniCredit Unlocked, it's identical. We said these are the dividends, they're sacrosanct. We will tell you how much of the excess capital we give you back at the end of every year. We changed. Sometimes you need to go back to where you were because it was better, and I think it is better. Thank you. The next question is from Antonio Reale, Bank of America. Please go ahead. Hi, good morning. It's Antonio from Bank of America. Two questions for me, please. The first one is on NII in Italy. We've seen a leg down this quarter given the outlook on rates. My question is, do you think we've seen the trough in your Italian NII this quarter? I've seen a good uptick in deposits, and you've talked about growth. Do you think that NII in Italy can be the sort of swing factor for the group given the performance we're seeing elsewhere? That's my first question. My second question is a follow-up on your profit ambition for 2027. You're targeting well above 11. If I look at your slide two, you're looking to add €1 billion by 2027 from strategic investments, which at least on my number seems somewhat conservative. If I add that up to your underlying profits this year plus some of the growth you've talked about, you're really going to be closer to €12 billion more than 11. What am I missing? Is it you're building buffers on buffers? The third and last clarification, if I may, I think you've talked about a new multi-year plan. Did I understand correctly that you're looking to present a new strategy update sometime next year? If so, could we have any visibility as to when you would expect that to be? Thank you. Okay, so let me start with NII. Let me be broader. I don't think NII in Italy has troughed yet. I think it has a little bit more to go. I would say that if I take a group-wide view in our Executive Committee, the word troughing on NII is more and more used. I think that like with the plan, the right time to discuss about trough or no trough and what are the expectations is probably with the year-end result. As we will be sitting on the year-end result, see what would have happened around January and the prospects, we will be able to guide you without speculating. I would say that we are troughing in the group. We just need confirmation that this is sustainable. With respect to net profit ambition, I think I would like Antonio not to make the same mistake as we probably I made on distributions before. We will return €30 billion or more than €30 billion. We spent €6.5 billion and it becomes €36.5 billion. Now, it just became €33.5 billion, but not €36.5 billion and everybody's disappointed. I would say the following. Because of the further acceleration that we see in our underlying business, which is really the exciting story in our results of this year, unfortunately, because of all the noise, the consolidation of stake, the this and the that, it is kind of hidden. Because of the acceleration of our commercial results that we see this year and that we confirm three quarters in a row, and I hope, and it's critical, we will be confirming in the fourth quarter, we're more optimistic than what we were when we designed our phase two of UniCredit Unlocked 2025-2027. As every year, we update that by losing the looking back and adding a year. I think at the moment, if the trends are confirmed, we will be looking to upgrade our expectation for profitability. At the moment, you only have 2027. You will look at 2027. We will add 2028 and we will clarify 2026. For that reason, we're making the investment. In terms of your reconstruction, I would say this. We were going to make circa, and you know that circa can be up or can be down, €10 billion in 2027 before we made these investments or before we consolidated this investment. If you mechanically take €10 billion and you add €1 billion net from this investment, and you're right, the €1 billion is dependent on two factors: the consensus on Commerzbank and Alpha Bank being right, and that I'm not going to get into; and secondly, our hedging cost, which I'm deducting from the total numbers being the ones that you're estimating to be, but we're going to give you an update with the year-end numbers. If you mechanically add circa €10 billion to circa €11 billion, you don't get to well above €11 billion. You get to circa €11 billion. Okay? Why are we telling you well above €11 billion? Because the underlying franchise is doing better than we anticipated at the beginning of the year. How much well above €11 billion, I'm not going to comment because we're finalizing our plan. We're getting the feedback from everybody. We want to be realistic on what we say, and most importantly, our board needs to approve it. Let's put it this way, I'm optimistic about 2027, which is the only number out there. For us internally, we are also positive on what we can do on 2026 because of all these factors, because it's not only one year that gets pulled up. 2026 and 2028 will be affected as well. With one caveat or one caution. The caution is that the new investment that we're doing on accelerating is going to impact 2026, but not fully. They need to be rolled in. The years where our investment, new investment, is going to impact the most, and I'm answering your question again, is in 2027 and 2028. In 2026, although we have started this investment, they will impact for only a fragment of a year. 2026 is going to remain just what, which is not little, what our acceleration can deliver without a lot of impact from those investments because they will arrive a little bit later in the time and affect more of the second half of a year than the first half of a year. I hope that that's clear. With respect to Strategy Unless somebody demonstrates otherwise, I personally do not like investor days. I like updating everybody, all of our stakeholders, every quarter. I don't think many banks maybe bore you or interest you with an update on their strategy and where they are going as an integral part of their result presentation four quarters a year. Once a year, once we roll our plan, we review our guidance with a lot more granular detail. I think that is more continuous and better. Should you expect that with the full year 2025 results, we will give you significant detail on the next three-year plans as we roll? You should. Is that an investor day? No, it's not. The date is very clear, it is when Magda will tell you we will have the year-end results, sometimes in February. Very clear, thank you. The next question is from Delphine Lee, J.P. Morgan. Please go ahead. Ms. Lee, we cannot hear you. Maybe the line is on mute. Yes, apologies. Hi, thank you for taking my questions. My first one is on Commerzbank. Just to understand a little bit where we are now on the derivatives that are still in place, on the hedging costs, just to understand a little bit, you know, how to read a little bit, you know, the effect it's taken this year, but also kind of what we should expect in the coming years. My second question is on the Italian bank tax. I mean, I saw you said it was a bit early, but I don't know if you could just share any color about just, you know, what do you think is a likely scenario? Thank you. Okay, so Commerzbank, where we are now on the hedging cost. I would say that it's fair to say that we're now completely aligned on the upside with Commerzbank as we have at, I would say, significant costs this year. That's why you see the impact I was talking about. We have practically eliminated all call options that we had sold on the stock when we colored it or on part of the stock when we colored it. If you look at it from a long standpoint on the upside, we're one to one. However, as for everything else we do, and it's not personal or anything, we remain always cautious as we have overlays on our asset quality while we are very strong on it and we are very optimistic on it. We have something called put option on the stake just in case. If the performance is positive and ahead of expectation, we are one-on-one aligned. If the performance is not just negative, but significantly negative, we make money. Okay, that's where we are. Now, those hedges cost money and they are netted from the profitability of a stake. They cost money in two ways. One, the cost of the stakes, which is several hundred million. We will update on exactly where we are because we continue to do action to reduce it with the end-of-year results. The second thing is funding because we're funding the participation, obviously. The two of them are significant, but as we have taken cost upfront already, we continue to look at ways to reduce that combined cost to give you more and more a clean impact on the net income we bring in from the stakes because we think it's cleaner and clearer for all of you. We will do that, but as we are conservative, we will maintain our put option to protect on the downside. For one, rating agencies approve of that. Italian bank tax, and what do you think is a likely scenario? I think I never know what the likely scenario is with anything that is politically related, and I don't try to speculate. I don't know. I would just say that it is premature to assess the full impact. I would say that depending on the rumor, the full impact is more or less high. I would say that for UniCredit specifically, the combination of the fact that we are, in inverted commas, only 40% in Italy and 40% profitability in Italy, and so on and so forth, the impact is obviously diluted on the 100%. Secondly, by having all of the cautionary, call them buffers, that we have across, we are going to try to neutralize as much of the impact, whatever the impact is, as we can. At the moment, we expect an impact, obviously, but it's premature to tell you how much. We will see in the next few days or weeks where we're going to land. Great, thank you very much. The next question is from Giovanni Razzoli, Deutsche Bank. Please go ahead. Good morning. Two questions at my end. One is on Russia. You confirmed that you are going to exit the country by 1st of 2026. Shall we assume that the contribution to the bottom line will also basically go to zero, or do you have ways to move some of the revenue or businesses elsewhere to keep the contribution of that contribution to some extent at some point? The second question is on your stake in Assicurazioni Generali. In the last conference call, you anticipated that you would have reduced your stake below 2%. Based on the last report on consult, you are still above 5%. I was wondering how shall we treat it in terms of contribution to your P&L or whether you have changed your views on these stakes. Thank you. On Russia, we never said we would exit by the first half of 2026. Let me be clear. What we expect to close, if you want to call it exit, and maybe that's where the misunderstanding lies, is that we will close our retail operation, which has already declined very significantly by the first half of 2026. We stand by that at the moment. The state of the franchise going forward is, as I said, we have about €700 million in local lending. For €700 million, we haven't granted any new loan since the war started. The rate of decline of those loans is dependent on which loan they are. If I have a mortgage, it's a long tail. That's why banks are different than other industries. If you are multi-year, they are multi-year. We believe that we will gradually trendline to about €500 million over time. There is very little we can do to go above and beyond that because if we have a loan outstanding and we're not giving you one, you trendline as the loans decay, and that is what varies. As we said, on deposit, the local deposits are just below €1 billion. We are a very cash-rich bank. We are viewed to be a safe haven to a certain extent, one, because we are international, and two, because of our strong capitalization. Obviously, by not having done any new loan, we are not exposed to any worsening of a credit cycle or anything else. We're just, I don't know, call it a safe deposit box, maybe it's not the right word. Those are there. Under Russian law, we cannot turn away deposits. They are what they are. We don't see any particular trend up or down at the moment, but they are what they are, and they are probably going to stay around that level. On payments, we used to be multi-currency, if I remember correctly, on 16 different currencies. We're now focused on two. Some we have discontinued, some we have effectively rendered marginal or close to zero. Those two are U.S. dollar and euro, as you have seen heard very broadly in Italy, and as said, we are providing a service to international Western companies that are still in the country and to the Western world that requires to execute payments directly and not through other economic blocks for energy and commodities that continue to be purchased by all of our countries from Russia. Therefore, that's what they are there for, and they stay there. They are less than 2% of the total payment that we do, about €6-7 billion. We don't see very material change from that, but they could evaluate. You asked your question about the contribution. I think because of how Russian and Russia rates are and because we are super covered in Russia, every time a loan is repaid, we get significant write-backs. As an example, this quarter, one large multinational or one large company in Russia repaid a cross-border loan, the last cross-border loan of substance that we had. As they repaid, they were covered at 40%. We released a significant amount of provision. From the beginning of the war, we've had that trend again and again. I can't stop that. If they repay and they're painful, I'm booking the release of provisions. I do think that the Russia trend line will continue as is. The Russia contribution to our profitability will significantly decline in 2026. In 2027, as we said, the contribution was going to trend down to, let's call it, marginal. When you look at our numbers, and I have made this point before, but maybe it's missed, try to look at our numbers and after 2027, eliminate the fact that we're absorbing a €600 to €700 million compression of bottom line and much greater on NII from the compression of Russia because at that point, my delta, I will have troughed and my delta goes up. What we're telling you is that the performance, the commercial performance of the rest of our franchise is running a lot faster than you think it's running because it's also absorbing that. Staking Generali reducing, etc. Our net exposure to Generali has been reduced, or our net stake in Generali has been reduced significantly, dramatically, I would say below 5%. I wouldn't say it is below 5%. Furthermore, what remains is hedged on the downside. Why has it been done in a way we have done it? We didn't want to weigh on the company, and that's what we have done. Is it strategic? No, it's not. Have we changed stance? For the time being, we have not changed stance. We are where we are. We have reduced the exposure. It is not something that is considered tactically important at the moment. We have reduced our net exposure, and potentially we will reduce more. At the moment, you should think that between the net number and the hedge that we are, it's well below 2%. The net exposure, I want to be very clear. Thank you. The next question is from Britta Schmidt, Autonomous Research. Please go ahead. Good morning. Thank you for taking my questions. A follow-up on Commerzbank. The performance of the CET1 guidance of 14.6% does not mention the increase in the stake to 29%, but the net profit indications for 2027 still do. Is this just a matter of timing, and what will be the impact of an additional 3%? With regards to NII, you said it'll pick up once rates are fully priced, and you sound more optimistic on longer than Italy. Can you confirm the 2027 NII indication that you previously provided to be slightly above 2024? Thank you. Yes, we are talking about 2027, and it is expected that by that time, in my opinion, much earlier than that, the remaining physical portion of the stake between 2026 and circa 2029 will be, let's say, consolidated. At the moment, we don't need it. It has an impact on capital. We don't need the contribution, and for the time being, it is better to do that because it squares with a long position with some of a short position, and it reduces the volatility of our P&L, which at the end of the day is what all of you want. I would say if you fast forward to 2027, but probably much earlier, we will be at circa 2029, plus minus. The timing to do that is linked to minimizing the impact on capital and ensuring that the volatility and the impact on our P&L quarter after quarter still gets reduced over time, so you don't need to go and estimate that, etc. That is the point. With respect to the NII indication, I think for the time being, we're just confirming. As we review our rolling three-year plan, we will update you on that, and depending on how much more growth we see vis-à-vis the time where we had that, we may be updating it on the upside. The next question is from Sofie Peterzens, Goldman Sachs. Please go ahead. Yes, thank you for taking my question. This is Sophie from Goldman Sachs. My first question would be, you have the 29% stake in Commerzbank and 26% in Alpha Bank. In five years' time, how should we think about the probability of UniCredit owning 100%, potentially having unchanged ownership, or not owning anything in these two banks? If you could comment on how we should think about the ownership. My second question would be around the costs. I know you will have the strategic update with the fourth quarter results next year, but how should we think about cost growth in 2026? Should we expect any restructuring costs? Very long term, do you think that there is potential for UniCredit and European banks to become much more efficient than what we are today? You have one of the best cost-to-income ratios in the sector at 37% in the first nine months, but could that potentially go down to 30% or even lower in the very long term? Thank you. Okay, so I think for the time being, we are quite committed to remaining at a level of participation that is below the level of a full offer for very different reasons in Alpha and in Commerzbank. With respect to Alpha, one of the reasons why, or the main reason why we have increased our stakes, 9.9%, then we went to 20%, then we went to 26%, is very simple. We have an outstanding relationship with the bank, number one, and the bank asked us and considered it a positive development for them. That is a good reason when you have a partner. The second good reason, because you always need to have the financial meeting, is Alpha has effectively allowed us to demonstrate to ourselves first and then to the market that the setup that UniCredit now has with centralized product factories, with centralized procurement, with increasingly aligned technology data platform, with, let's call it, put at the center all the scalable services that a group like ours can give to 13 disparate banks, allowing those disparate banks to be not only the best they can be in the market, but surpass their competitors by leveraging what UniCredit putting at scale at the center can offer them. We discussed it many times. There were countries in Central and Eastern Europe who could not distribute investment products because the large asset managers would not go there and support that growth. They were not relevant enough. Through us, they can. If they did that one by one, they couldn't. We have demonstrated not only that, but we have demonstrated with Alpha that in a bank that is absolutely not part of a group, the level of value we can generate for them and for us by leveraging those common platform products, etc., at scale is much greater than it was. If you wish, it demonstrates that even without banking union for a group like us, we can demonstrate significantly above zero value creation across border just because we're set up how we're set up. We also work with them. They provide ideas, and we are providing ideas, and we believe that we have a blueprint in the way we run our network in retail, a blueprint on our contact centers, a blueprint in our digital first, and vice versa, where we can extract a lot of efficiencies even if we're separate. If you believe that, you want to increase your participation to not only benefit from that through your part of the equation, but to gain more exposure through their part of the equation. That's why we are where we are. We will not do things in Alpha that are not in the interest of everybody, and we are very, very committed to the partnership, and we believe that Greece and Alpha are a great addition, although on a partnership basis to what the group is. Commerzbank is different, and I'm not going to comment on all the differences, but again, we are committed to stay below the full bid % for the moment. We have, through the put options, protection on the downside. We are now aligned one to one if there are positive developments. The two of them together give not only €1 billion of net profit, but also €1 billion of revenues, but also €1 billion of net profit, which is fully distributable to our shareholders. Today, if I were to take that off and replace it by share buyback, I would have significant dilution. It is an engine, a further engine to propel my net revenue. It is a further engine to support distribution and net profit growth. For the time being, we're very happy to stay where we are, and I would think about now keeping that for the foreseeable future. Obviously, we observe the situation, and we will judge what to do if and when the situation changes. For the time being, it's not changing. How should we think about cost growth in 2026 and restructuring costs, etc., etc.? Okay, I think this is a good question because it allows us to touch on a point. From 2021, we have been pounding the table that cost growth, absolute cost growth, above and beyond cost-to-income ratio is critical to the success of the bank. A lot of people were saying, "But why do you focus so much on cost growth with rates and this and this and that? What do you care? It's €100 million here and there." I would say to those people, "Go now tell me the same thing with rates going down." Why is cost growth such a critical point for our group? Our competition is no longer just legacy banks. Our competition is fintechs. You just need to see how much new clients, some of our competitors, the names that come to your mind, are aggregating in every country. The only way we're going to be successful in pushing them off is twofold. One, improving our client experience. Hence, all the investment we're doing in the network, in the omnichannel, etc., etc. Two, having a break-even point that is substantially below them because it allows us to have flexibility and to be able to release some of that ability on the margin if we want to push back if a situation becomes necessary. The second reason is, as I touched on, if you are very efficient and you constantly find new ways to reduce your cost, you will be able to finance investment. Whatever anybody tells us, if you go to the market with results every quarter, if your costs are a problem, you're not investing because it would become a compounded problem. Therefore, as you don't have control on cost, to contain that appearance of no control of cost, you're investing less. In our case, we can invest more because we have control on cost. I don't have a number to give you for full year 2026, 2027, or 2028. We did commit to keep our cost broadly flat from 2024 to 2027 before, and there is no way I'm going to back down from that commitment. This year, the costs are broadly flat, are going to go close to being broadly flat, not only as they appear, but absorbing all the new perimeter of consolidation that, if I don't remember wrongly, was adding about €100 million of cost to ours. When we tell you we're broadly flat, it means we absorbed €100 million while investing. I don't think any bank is able to do that today. We are determined to continue to go because we find inefficiencies every day. Restructuring cost. I have already said that on the €10.5 billion of this year, which may or may not be greater, we will potentially, probably, possibly, it's a decision for my board, deduct some upfronting of cost in investment or some below-the-line things to further accelerate, not so much 2026, but 2027 and 2028. Okay? In our plan this year, when we started 2025, we did not have any such cost because we took them before. Indeed, the impact of these things is not having an impact on 2026. They're having an impact on 2027 and 2028. Why then have we changed our position? We have changed our position for two reasons. One, we can afford it. It's the famous quote from a famous American president, "You build your roof while the sun is shining." We have a roof. I think at the moment, we're just making improvements to the entire house. The second thing is because, due to witnessing true acceleration of top line from all of our businesses and all of our countries, we feel more confident that we can spend on certain things and accelerate that growth further. Those costs or investment or restructuring, call it whatever you want to call it, are directed at showing you that we are upgrading certain numbers because we are going to track it and we are going to give more impact. As of now, I can't tell you what we will do in 2026, but what I can tell you is we don't need to do anything in 2026, and we don't need to do anything in 2027. If we will do something in 2026 in addition to 2025 or in 2027, it will be because the sun is shining, we're doing much better than we anticipated, and we see better opportunities to further accelerate going forward. Otherwise, we're very happy and we're set for probably up to 2028. You have a baseline. If we can beat that baseline investing more, then we can talk about it again. Once we give you the baseline at the beginning of 2026, we will hold and we will only talk about doing anything else if we beat it. Is there a potential for UniCredit and EU banks to become more efficient than today? My personal view, absolutely. Absolutely. Every time we go to the end of a year, we say, "Don't look at incremental. Put everything back on a blank piece of paper and ask yourself, if you were building the business from the ground up today, would you build it like that?" The answer is always, "No. We would never do this, we would never do that, we would never do that." In many cases, you can't change everything at the same time because we're flying while we're doing this. Every time that we do an inch forward, we find a lot more opportunity to do another inch and then another inch. I think for too long, our sector has said, "Oh, we cannot be more efficient than that," etc., etc. I will ask everybody how many of all of us would have thought that European banks could be not only at now much below 40, but even significantly below 50% cost-to-income ratio five years ago. You can say it's rates. I can respond, "Really? Because rates have just gone down 150 basis points and we're still holding." It's exactly the same on return on tangible equity. "Oh, it's rates." Really, we're still holding at 20% and we're committed to hold or improve both on cost, on cost-to-income ratio, and on return on tangible while growing. We will demonstrate that in the next few years. Thank you. The next question is from Andrea Filtri, Mediobanca. Please go ahead. Thank you for taking my questions. I think you just inspired my first question, which is, when do you think you can scale a Buddy platform up to roll it out to the rest of the group, and where do you see cost-to-income trending once the new tech is rolled out? The second question is, what would banks need from the European Commission to move ahead with real mergers in Europe? The third, just a clarification, how much longer can you keep your overlays unchanged? Thank you. Okay, so I'm going to start from number three because it's an important question. My overlays, this is a debate I have with many people, my overlays will remain where they are until I am absolutely convinced that I'm in summer and the sun is shining for the next two or three years. Until then, I am not going to let go. There is no point in shaving my cost of risk to look good in the short term, and then we get some issues with macro development, some issues with credit development, some issues with something and say, "Oh, and now my cost of risk needs to quadruple." I didn't say it quadrupled, I'm just giving an example. The overlays are as what they are. I think one country where I spent a lot of time in the past, called Spain, used to call them anticyclical provision. For me, it's an anticyclical provision. When the sun shines, you create overlays and extra provision. When it rains, you release overlays and extra provision to buffer the peaks and troughs of our sector. I think that is the conservative way of looking at it. We haven't released them yet because if you ask anybody, has there been anybody who will tell you, "We're fine. The cycle of risk is fine and there are no issues, and for the next three to five years, it's all fine"? Nobody's saying that, so why should I release? Accounting-wise, we release when some of the overlays are driven by drivers. The drivers are linked to areas of risk. Sometimes the areas of risk that we identify finish, and therefore the overlays are released. We always, unfortunately or fortunately, find new areas of worry that drive the replenishing of the overlays at exactly the same level they were before. We will do that until when they release, we look out and we say, "Wow, there is really nothing else. There is no point in maintaining them." Hopefully, we will do that without having had to use them to contain our cost of risk, but we don't know. Nobody knows. That's the point. For us, overlays are an insurance policy, but one that will pay up and propel our net income if it doesn't need to be used because we are all wrong and the cycle of risk is benign and will remain benign for the foreseeable future, which everybody doubts. The first question, Vodeno and the growth and etc. We did a step that no other bank had done, which is instead of experimenting with external providers on modernizing our core banking system, modernizing our data platform using AI, by lack of opportunity relationships, we found what we believe, after diligence, to be one of the best, if not the best, core banking system platform of external providers out there. Why do I think it's one of the best? Number one, the break-even point of that platform is two-thirds to 70% below ours today. By the way, it's not because ours is not good, but because ours is legacy and theirs is not. It's all cloud native. Second reason, it is flexible. A lot of this platform, you can do transaction and payments. You cannot do multiple products. With Vodeno platform, you can. Because of that, we bought it. I think we bought it at an attractive price. I think that it allows us to bring in 200 engineers that we can use on the side of a group as a sandbox to experiment on things. A lot more exciting job than our continued rationalization of what we have. They're there. As they're there, we are doing a number of initiatives with them. One is the new entry into Poland. People look at it as the new entry into Poland. I don't look at it as the new entry into Poland. I look at it as Vodeno with this break-even point at that level, with a digital-first bank, which also relies on branches because we will have 40 branches in Poland. Can it get in from the ground up and make money? I'm not going to tell you how many clients we're going to get on the platform, and I'm not even going to tell you how many products I'm selling. I am going to tell you, can we make money at 20% return on equity? If we can, that's the proof of the pudding, and therefore it's replicable in other places. Initiative number one. Initiative number two, Vodeno comes with an already functioning, and I believe unparalleled embedded finance platform. We're going to leverage it to the entire group, and it's an area of growth for our landing. Initiative number three, Vodeno allows us, when our internal technology and Vodeno look at our legacy system, to look at the possibility of migrating on the Vodeno platform. Incidentally, Vodeno is the only platform that has done it. We call it Vodeno Ion, but what is Ion? Ion is the ex-Monte dei Paschi di Siena, Belgium. It had a legacy platform like all of us. It was migrated in full to Vodeno in under a year. Not the scale of UniCredit, not the scale of our unique banks, but it worked. It is premature to tell you when, how is it possible, but certainly in the trajectory of looking at what we can do to continue to modernize and migrate, that is considered, as it is considered every time we have a new initiative that is completely new to the group, moving to the cloud, do this, do that. They are help, contribution to our own team to be able to accelerate that because we have capacity, engineering capacity to accelerate it. For me, Vodeno is an outstanding sandbox and an acceleration leverage for us that we are experimenting with, and I'm very, very happy to have. If you look at what will take for the EC, the European community, to allow banks to move with real mergers in Europe, I think you can look at it in two ways. Way number one, we need a banking union to do cross-border merger. How long is a piece of string? You need to ask them. Everybody says we need it, nobody wants to do it. You can look at it in another way. Regardless of a banking union, can we do cross-border merger and extract value? UniCredit can. I don't think anybody else can. That may be arrogant from our standpoint, but I think we can because of the setup that we have with 13 plus 1 banks, common factories, increasingly common technology platform, data platform, procurement, strategy, vision, purpose, talent, university, etc. It's just a container that accelerates and extracts more value than we could individually from every bank that chooses to partner with us. In addition to that, we believe that our blueprint from running transformation and banking can extract value from a number of banks even if we're not doing an in-market merger. Most importantly, we are in 13 markets. We're not hostage of any one market, and we can always look. Having said that, if you ask me what the time of everybody at UniCredit has been dedicated to across the board, and even more so in the last six months or three months or four months, it is providing you with an underlying performance that accelerates and the new plan that you will see from 2026 onward. It is not thinking that M&A is the only solution for us to buffer growth, which is what people who cannot grow anymore have to think. We will look at M&A if it accelerates, and we're very happy not to look at it if it doesn't. In the same way, we were very fast to take the opportunity on the stakes, and we will not do anyone because we're moving in a direction without needing anything more. If there are opportunities, we move fast. If there are not, the core is UniCredit at its foundation. We will now take the last question from Manuela Meroni in Intesa Sanpaolo. Please go ahead. Yes, thank you for taking my question. The first one is on the revision of the taxation of the dividend paid on the EU subsidiaries. I'm wondering if you expect any refund following such a revision. The second question is on your strategy in Italy. It's clear that now you are focusing on the organic growth, but I'm wondering if you could be still open to inorganic growth, and in that case, what would be the area and the business in which you may potentially be interested in? Thank you. Okay, so, answer to your question, without wanting to speculate as things are constantly moving in our countries and in the rest of Europe, I would be positive on the answer to question number one. Do we expect any refund following the revision of the taxation of dividends paid by EU subsidiaries because it's supported by a clear deliberal decision. Strategy initially would be, would you be open to inorganic growth? If so, in what areas? We're always open. We're always open, but if you ask me, it's almost like I said to someone, what is the possibility that you go on Mars? It's possible. It's not probable in the short term. It's not probable because of all the reasons you know very well, and most importantly, because yet again, I got confirmation that when you do M&A, you slow down your own franchise significantly. I think that the revived momentum that Italy is experiencing now and the commitment they are making to themselves to gain market share creates a ton more value than being in a situation where, because of now the lens of regulatory and political approval, we are all in a swamp for a year before being able to move anywhere. There are a lot of considerations that are not value creation or certainly not value creation for the shareholder of a UniCredit cloud judgment. For us, we look, if there are good opportunities, we're there. If people are interested in creating value, we will run. We think that we can achieve a lot organically, and we will demonstrate it through 2026 to 2028. That's where the focus is, I would say, mostly, if not exclusively. If something comes up, as we have demonstrated, we're always very quick to move, but we do not expect that something will come up. Okay, gentlemen, that was the last question. Thank you. Thank you very much. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect.

Speaker 3: Good morning, ladies and gentlemen. Before I hand over to Ms. Magda Palczynska, Head of Investor Relations, a reminder that today's call is being recorded. Madam, you may begin. Good morning, ladies and gentlemen. good morning ladies and gentlemen Before I hand over to Ms. Magda Palczynska, Head of Investor Relations, a reminder that today's call is being recorded. before i hand over to ms magda palczynska head of investor relations a reminder that today's call is being recorded Madam, you may begin. madam you may begin

Speaker 6: Good morning, and welcome to UniCredit's third quarter and nine-month 2025 results conference call. Andrea Orcel, our CEO, will take you through the presentation. This will be followed by a Q&A session with Andrea and Stefano Porro, our CFO. As always, please limit yourself to two questions. With that, I hand over to Andrea. Good morning, and welcome to UniCredit's third quarter and nine-month 2025 results conference call. good morning and welcome to unicredit's third quarter and nine-month 2025 results conference call Andrea Orcel, our CEO, will take you through the presentation. andrea orcel our ceo will take you through the presentation This will be followed by a Q&A session with Andrea and Stefano Porro, our CFO. this will be followed by a q&a session with andrea and stefano porro our cfo As always, please limit yourself to two questions. as always please limit yourself to two questions With that, I hand over to Andrea. with that i hand over to andrea

Speaker 10: Good morning, and thank you for joining us. Today, I am proud to present our record third quarter that completes the best nine months in our history. These outstanding results have been delivered thanks to our people. Their professionalism, ownership, passion, determination, and search for excellence are the foundation of everything you will hear today. Our message is simple. UniCredit is about sustainable, best-in-class performance today while steadily building for tomorrow, all supporting best-in-class sustainable shareholder remuneration. We remain proud of what we have achieved and confident in our future trajectory because our strategy works and our execution is unparalleled. This is true across every region and business we operate in. These results mark our 19th consecutive quarter of quality, profitable growth, and a clear beat across net revenue and all its core components: cost, capital, net profit, and return on tangible equity. Good morning, and thank you for joining us. good morning and thank you for joining us Today, I am proud to present our record third quarter that completes the best nine months in our history. today i am proud to present our record third quarter that completes the best nine months in our history These outstanding results have been delivered thanks to our people. these outstanding results have been delivered thanks to our people Their professionalism, ownership, passion, determination, and search for excellence are the foundation of everything you will hear today. their professionalism ownership passion determination and search for excellence are the foundation of everything you will hear today Our message is simple. our message is simple UniCredit is about sustainable, best-in-class performance today while steadily building for tomorrow, all supporting best-in-class sustainable shareholder remuneration. unicredit is about sustainable best-in-class performance today while steadily building for tomorrow all supporting best-in-class sustainable shareholder remuneration We remain proud of what we have achieved and confident in our future trajectory because our strategy works and our execution is unparalleled. we remain proud of what we have achieved and confident in our future trajectory because our strategy works and our execution is unparalleled This is true across every region and business we operate in. this is true across every region and business we operate in These results mark our 19th consecutive quarter of quality, profitable growth, and a clear beat across net revenue and all its core components: cost, capital, net profit, and return on tangible equity. these results mark our 19th consecutive quarter of quality profitable growth and a clear beat across net revenue and all its core components cost capital net profit and return on tangible equity It is a quarter that defines great performance, great prospects, and great returns for our shareholders today and over time. We have reinforced our double-digit growth trajectory in EPS, in DPS, in tangible book per share, while maintaining a return on tangible equity above 20%. We confirm our dividend and share buyback guidance. We continue to grow in a quality way. Net revenues are up in the quarter and broadly stable over the nine months. This is remarkable given the challenging macro environment in which we are operating. It shows that UniCredit is capable of growing through the cycle, supported by an increasingly diversified top line that remains highly resilient and will quickly pick up as soon as the impact of a rates decline is absorbed. Costs continue their downward trajectory, supporting a best-in-class cost-to-income ratio. Capital efficiency remains excellent, with a top-tier net revenue to RWAs. It is a quarter that defines great performance, great prospects, and great returns for our shareholders today and over time. it is a quarter that defines great performance great prospects and great returns for our shareholders today and over time We have reinforced our double-digit growth trajectory in EPS, in DPS, in tangible book per share, while maintaining a return on tangible equity above 20%. we have reinforced our double-digit growth trajectory in eps in dps in tangible book per share while maintaining a return on tangible equity above 20% We confirm our dividend and share buyback guidance. we confirm our dividend and share buyback guidance We continue to grow in a quality way. we continue to grow in a quality way Net revenues are up in the quarter and broadly stable over the nine months. net revenues are up in the quarter and broadly stable over the nine months This is remarkable given the challenging macro environment in which we are operating. this is remarkable given the challenging macro environment in which we are operating It shows that UniCredit is capable of growing through the cycle, supported by an increasingly diversified top line that remains highly resilient and will quickly pick up as soon as the impact of a rates decline is absorbed. it shows that unicredit is capable of growing through the cycle supported by an increasingly diversified top line that remains highly resilient and will quickly pick up as soon as the impact of a rates decline is absorbed Costs continue their downward trajectory, supporting a best-in-class cost-to-income ratio. costs continue their downward trajectory supporting a best-in-class cost-to-income ratio Capital efficiency remains excellent, with a top-tier net revenue to RWAs. capital efficiency remains excellent with a top-tier net revenue to rwas Net profit is up 4.7% in the quarter and 12.9% in the nine months, all at a 22% average return on tangible equity. All our asset quality metrics remain solid and stable. Net NP decreasing, cost of risk contained, with no signs of credit deterioration. Overlays intact at €1.7 billion, or 40 basis points of yearly cost of risk. A further defense against any future deterioration of our strong asset quality. CET1 ratio remains well above our target range and among the strongest in Europe. Liquidity remains sound, with LCR above 140%. Net profit guidance for 2025 remains at €10.5 billion, although we are now considering management actions to be expensed in Q4 to further propel our future result, mostly from 2027 onward. These actions are focused on investment for growth rather than investment on efficiencies as they were in the past. Net profit is up 4.7% in the quarter and 12.9% in the nine months, all at a 22% average return on tangible equity. net profit is up 4.7% in the quarter and 12.9% in the nine months all at a 22% average return on tangible equity All our asset quality metrics remain solid and stable. all our asset quality metrics remain solid and stable Net NP decreasing, cost of risk contained, with no signs of credit deterioration. net np decreasing cost of risk contained with no signs of credit deterioration Overlays intact at €1.7 billion, or 40 basis points of yearly cost of risk. overlays intact at €1.7 billion or 40 basis points of yearly cost of risk A further defense against any future deterioration of our strong asset quality. a further defense against any future deterioration of our strong asset quality CET1 ratio remains well above our target range and among the strongest in Europe. cet1 ratio remains well above our target range and among the strongest in europe Liquidity remains sound, with LCR above 140%. liquidity remains sound with lcr above 140% Net profit guidance for 2025 remains at €10.5 billion, although we are now considering management actions to be expensed in Q4 to further propel our future result, mostly from 2027 onward. net profit guidance for 2025 remains at €10.5 billion although we are now considering management actions to be expensed in q4 to further propel our future result mostly from 2027 onward These actions are focused on investment for growth rather than investment on efficiencies as they were in the past. these actions are focused on investment for growth rather than investment on efficiencies as they were in the past The early deployment of €6.5 billion of our excess capital and absorption of related upfront costs will add €1 billion of net revenues and net profit by 2027, growing from there at a fixed capital consumption and largely protected by put options. Residual 2024 share buyback of €1.8 billion will start by the end of October and as early as the end of this week. €9.5 billion in dividends and share buyback for 2025 are confirmed, with an interim dividend of €2.2 billion paid on 26th of November. Ordinary distribution policy from 2026 onward of 80% of net profit is confirmed. This is practically equivalent to the 90% of previous net profit that did not include the impact from investment. Such ordinary distribution may be complemented by excess capital return evaluated yearly, as we did in the past. The Italian government has released a draft bank levy. The early deployment of €6.5 billion of our excess capital and absorption of related upfront costs will add €1 billion of net revenues and net profit by 2027, growing from there at a fixed capital consumption and largely protected by put options. the early deployment of €6.5 billion of our excess capital and absorption of related upfront costs will add €1 billion of net revenues and net profit by 2027 growing from there at a fixed capital consumption and largely protected by put options Residual 2024 share buyback of €1.8 billion will start by the end of October and as early as the end of this week. €9.5 billion in dividends and share buyback for 2025 are confirmed, with an interim dividend of €2.2 billion paid on 26th of November. residual 2024 share buyback of €1.8 billion will start by the end of october and as early as the end of this week €9.5 billion in dividends and share buyback for 2025 are confirmed with an interim dividend of €2.2 billion paid on 26th of november Ordinary distribution policy from 2026 onward of 80% of net profit is confirmed. ordinary distribution policy from 2026 onward of 80% of net profit is confirmed This is practically equivalent to the 90% of previous net profit that did not include the impact from investment. this is practically equivalent to the 90% of previous net profit that did not include the impact from investment Such ordinary distribution may be complemented by excess capital return evaluated yearly, as we did in the past. such ordinary distribution may be complemented by excess capital return evaluated yearly as we did in the past The Italian government has released a draft bank levy. the italian government has released a draft bank levy It is premature to assess its impact as it is still under discussion. UniCredit will dilute any hit thanks to our geographic diversification. As always, we will do our best to minimize its impact on UniCredit, our shareholders, our people, and our clients. We will release more detail once this is finalized. Our performance this quarter further strengthens our unique equity story, one of the most compelling in European banking. We're delivering beyond what we promised. We have further strengthened our earnings and dividend and capital deployment trajectory as we accelerate the execution of our winning strategy, building even greater confidence in the sustainability of our performance. Our equity story is rooted in our DNA of excellence, something that sets us apart from our competitors. It enables us to deliver consistently in the short term while building long-term sustainable value for our shareholders. It is premature to assess its impact as it is still under discussion. it is premature to assess its impact as it is still under discussion UniCredit will dilute any hit thanks to our geographic diversification. unicredit will dilute any hit thanks to our geographic diversification As always, we will do our best to minimize its impact on UniCredit, our shareholders, our people, and our clients. as always we will do our best to minimize its impact on unicredit our shareholders our people and our clients We will release more detail once this is finalized. we will release more detail once this is finalized Our performance this quarter further strengthens our unique equity story, one of the most compelling in European banking. our performance this quarter further strengthens our unique equity story one of the most compelling in european banking We're delivering beyond what we promised. we're delivering beyond what we promised We have further strengthened our earnings and dividend and capital deployment trajectory as we accelerate the execution of our winning strategy, building even greater confidence in the sustainability of our performance. we have further strengthened our earnings and dividend and capital deployment trajectory as we accelerate the execution of our winning strategy building even greater confidence in the sustainability of our performance Our equity story is rooted in our DNA of excellence, something that sets us apart from our competitors. our equity story is rooted in our dna of excellence something that sets us apart from our competitors It enables us to deliver consistently in the short term while building long-term sustainable value for our shareholders. it enables us to deliver consistently in the short term while building long-term sustainable value for our shareholders This performance gives us a foundation and the confidence to outperform in phase two of our strategy, accelerating growth, driving efficiency further, and innovating to meet the challenge of fintechs. Our capital allocation decisions are a core element of our equity story and remain measured, disciplined, and entirely aligned with the objective of long-term value creation. This year, we have deployed €6.5 billion of excess capital, well ahead of our plan, in a way that enhances our standalone trajectory and grants strategic optionality. The equity consolidation of our stakes in Commerzbank and Alpha Bank, following the internalization of Life Insurance in Italy, the combination with Alpha Bank in Romania, and the acquisition of Vodeno Ion delivers significant immediate value and improves our geographic and client mix. This performance gives us a foundation and the confidence to outperform in phase two of our strategy, accelerating growth, driving efficiency further, and innovating to meet the challenge of fintechs. this performance gives us a foundation and the confidence to outperform in phase two of our strategy accelerating growth driving efficiency further and innovating to meet the challenge of fintechs Our capital allocation decisions are a core element of our equity story and remain measured, disciplined, and entirely aligned with the objective of long-term value creation. our capital allocation decisions are a core element of our equity story and remain measured disciplined and entirely aligned with the objective of long-term value creation This year, we have deployed €6.5 billion of excess capital, well ahead of our plan, in a way that enhances our standalone trajectory and grants strategic optionality. this year we have deployed €6.5 billion of excess capital well ahead of our plan in a way that enhances our standalone trajectory and grants strategic optionality The equity consolidation of our stakes in Commerzbank and Alpha Bank, following the internalization of Life Insurance in Italy, the combination with Alpha Bank in Romania, and the acquisition of Vodeno Ion delivers significant immediate value and improves our geographic and client mix. the equity consolidation of our stakes in commerzbank and alpha bank following the internalization of life insurance in italy the combination with alpha bank in romania and the acquisition of vodeno ion delivers significant immediate value and improves our geographic and client mix This capital has been deployed at an approximate 20% return on investment, roughly twice the current return on our share buyback and around 2.5x the implied return of purchasing Commerzbank or Alpha Bank shares at current market prices. We're securing structurally higher net profit through the cycle, propelling sustainable higher dividends and share buybacks, with per share and return on tangible equity trajectory at the top of the peer group. We confirm 2027 guidance for net profit to well above €11 billion. We have combined preparation with opportunity and seize the right moment to maximize shareholder value. Distribution can reach shareholders in two ways: directly through dividends and indirectly through capital deployment that in turn enhances future earnings and dividend per share. Dividends remain sacrosanct. Real cash returned directly to our shareholders, generating an attractive dividend yield. This capital has been deployed at an approximate 20% return on investment, roughly twice the current return on our share buyback and around 2.5 x the implied return of purchasing Commerzbank or Alpha Bank shares at current market prices. this capital has been deployed at an approximate 20% return on investment roughly twice the current return on our share buyback and around 2.5 x the implied return of purchasing commerzbank or alpha bank shares at current market prices We're securing structurally higher net profit through the cycle, propelling sustainable higher dividends and share buybacks, with per share and return on tangible equity trajectory at the top of the peer group. we're securing structurally higher net profit through the cycle propelling sustainable higher dividends and share buybacks with per share and return on tangible equity trajectory at the top of the peer group We confirm 2027 guidance for net profit to well above €11 billion. we confirm 2027 guidance for net profit to well above €11 billion We have combined preparation with opportunity and seize the right moment to maximize shareholder value. we have combined preparation with opportunity and seize the right moment to maximize shareholder value Distribution can reach shareholders in two ways: directly through dividends and indirectly through capital deployment that in turn enhances future earnings and dividend per share. distribution can reach shareholders in two ways directly through dividends and indirectly through capital deployment that in turn enhances future earnings and dividend per share Dividends remain sacrosanct. dividends remain sacrosanct Real cash returned directly to our shareholders, generating an attractive dividend yield. real cash returned directly to our shareholders generating an attractive dividend yield Capital deployment, putting aside business growth and M&A, can take two complementary forms: share buybacks and share buyouts. Strategic. Both create value, increasing earnings and dividend per share. The difference lies in how they do it. Share buybacks reduce the denominator; share buyouts enhance the numerator. If we compare the position before and after our €6.5 billion share buyout, we have significantly increased the total value created for shareholders, above and beyond what was expected and would have been possible with share buybacks. Above and beyond the significant improvement in the underlying performance, the equity consolidation of our stakes has further strengthened our outlook for 2026, 2027, and beyond. Capital deployment, putting aside business growth and M&A, can take two complementary forms: share buybacks and share buyouts. capital deployment putting aside business growth and m&a can take two complementary forms share buybacks and share buyouts Strategic. strategic Both create value, increasing earnings and dividend per share. both create value increasing earnings and dividend per share The difference lies in how they do it. the difference lies in how they do it Share buybacks reduce the denominator; share buyouts enhance the numerator. share buybacks reduce the denominator share buyouts enhance the numerator If we compare the position before and after our €6.5 billion share buyout, we have significantly increased the total value created for shareholders, above and beyond what was expected and would have been possible with share buybacks. if we compare the position before and after our €6.5 billion share buyout we have significantly increased the total value created for shareholders above and beyond what was expected and would have been possible with share buybacks Above and beyond the significant improvement in the underlying performance, the equity consolidation of our stakes has further strengthened our outlook for 2026, 2027, and beyond. above and beyond the significant improvement in the underlying performance the equity consolidation of our stakes has further strengthened our outlook for 2026 2027 and beyond Based on Commerzbank and Alpha Bank earnings, consensus, and net of hedging cost, we expect around €1 billion contribution of fully distributable net profit by 2027, thereby significantly improving our net profit, return on tangible equity, EPS, DPS, tangible book value per share, vis-à-vis what was previously expected. Our change in distribution policy is a natural evolution in our journey. Previously, we guided on total distributions, including excess capital, at equal or above 90%. From 2026 onward, with excess capital now aligned to our best, strongest peers, we're guiding to ordinary distribution at 80% of net profit, with excess capital return to be evaluated yearly. This change enhances value for shareholders. The 80% ordinary payout applied to a CERC at 10% higher earnings and organic capital generation. Hence, it is practically equivalent to the 90% before. Any excess capital return or deployment is on top. Based on Commerzbank and Alpha Bank earnings, consensus, and net of hedging cost, we expect around €1 billion contribution of fully distributable net profit by 2027, thereby significantly improving our net profit, return on tangible equity, EPS, DPS, tangible book value per share, vis-à-vis what was previously expected. based on commerzbank and alpha bank earnings consensus and net of hedging cost we expect around €1 billion contribution of fully distributable net profit by 2027 thereby significantly improving our net profit return on tangible equity eps dps tangible book value per share vis-à-vis what was previously expected Our change in distribution policy is a natural evolution in our journey. our change in distribution policy is a natural evolution in our journey Previously, we guided on total distributions, including excess capital, at equal or above 90%. previously we guided on total distributions including excess capital at equal or above 90% From 2026 onward, with excess capital now aligned to our best, strongest peers, we're guiding to ordinary distribution at 80% of net profit, with excess capital return to be evaluated yearly. from 2026 onward with excess capital now aligned to our best strongest peers we're guiding to ordinary distribution at 80% of net profit with excess capital return to be evaluated yearly This change enhances value for shareholders. this change enhances value for shareholders The 80% ordinary payout applied to a CERC at 10% higher earnings and organic capital generation. the 80% ordinary payout applied to a cerc at 10% higher earnings and organic capital generation Hence, it is practically equivalent to the 90% before. hence it is practically equivalent to the 90% before Any excess capital return or deployment is on top. any excess capital return or deployment is on top Shareholders now gain greater quality, clarity, and predictability and greater dividend versus share buybacks, with future distribution more underpinned by sustainable profitability rather than extraordinary return of excess capital through share buybacks. Our DNA truly sets us apart. It defines who we are, how we perform, and the attraction of our differentiated model. It is built on three essential elements that together make UniCredit unique in Europe. We are the pan-European leader, uniting 13 banks plus one, leading in their markets. Institutions that in most of our markets are not only leaders but often synonymous with banking itself, and more than 20 million clients to whom we offer best-in-class solutions and a single gateway to Europe. Shareholders now gain greater quality, clarity, and predictability and greater dividend versus share buybacks, with future distribution more underpinned by sustainable profitability rather than extraordinary return of excess capital through share buybacks. shareholders now gain greater quality clarity and predictability and greater dividend versus share buybacks with future distribution more underpinned by sustainable profitability rather than extraordinary return of excess capital through share buybacks Our DNA truly sets us apart. our dna truly sets us apart It defines who we are, how we perform, and the attraction of our differentiated model. it defines who we are how we perform and the attraction of our differentiated model It is built on three essential elements that together make UniCredit unique in Europe. it is built on three essential elements that together make unicredit unique in europe We are the pan-European leader, uniting 13 banks plus one, leading in their markets. we are the pan-european leader uniting 13 banks plus one leading in their markets Institutions that in most of our markets are not only leaders but often synonymous with banking itself, and more than 20 million clients to whom we offer best-in-class solutions and a single gateway to Europe. institutions that in most of our markets are not only leaders but often synonymous with banking itself and more than 20 million clients to whom we offer best-in-class solutions and a single gateway to europe We have harnessed this unique pan-European model, maximizing local empowerment while leveraging our combined scale in strategic partnership, in talent, in technology, in data, in AI, in product factories, in procurement, thereby making the group much more valuable than the sum of its parts. In doing so, we have achieved our ambition for UniCredit's model to become the benchmark for banking in Europe, redefining what best-in-class across profitable growth, operational and capital efficiency, distribution, and strengths look like. We innovate, striving to anticipate market trends, continuously investing in people, in technology, data and AI, products and distribution channels, aiming to lead in the future while delivering short-term results. These three elements: pan-European leadership, benchmark for banking, and innovation form our DNA. They are the foundation on which we deliver today and build for tomorrow. We have harnessed this unique pan-European model, maximizing local empowerment while leveraging our combined scale in strategic partnership, in talent, in technology, in data, in AI, in product factories, in procurement, thereby making the group much more valuable than the sum of its parts. we have harnessed this unique pan-european model maximizing local empowerment while leveraging our combined scale in strategic partnership in talent in technology in data in ai in product factories in procurement thereby making the group much more valuable than the sum of its parts In doing so, we have achieved our ambition for UniCredit's model to become the benchmark for banking in Europe, redefining what best-in-class across profitable growth, operational and capital efficiency, distribution, and strengths look like. in doing so we have achieved our ambition for unicredit's model to become the benchmark for banking in europe redefining what best-in-class across profitable growth operational and capital efficiency distribution and strengths look like We innovate, striving to anticipate market trends, continuously investing in people, in technology, data and AI, products and distribution channels, aiming to lead in the future while delivering short-term results. we innovate striving to anticipate market trends continuously investing in people in technology data and ai products and distribution channels aiming to lead in the future while delivering short-term results These three elements: pan-European leadership, benchmark for banking, and innovation form our DNA. these three elements pan-european leadership benchmark for banking and innovation form our dna They are the foundation on which we deliver today and build for tomorrow. they are the foundation on which we deliver today and build for tomorrow Together, they are what makes our outstanding performance sustainable and what provides us unmatched ability to create value to other banks that wish to join our group. The first strand of our DNA, the one that makes us truly unique, is our pan-European nature. Our strength lies in our ability to bring together more than 20 million high-quality, loyal clients through our 13 plus one leading commercial bank, with commanding market share in the most profitable and value-accretive segments in each market. We do this through a common vision and strategy, supported by shared product factories, increasingly shared technology and data platform, shared procurement, and the strengths of a combined balance sheet. We have created a scale advantage for all our banks, enabling them to leverage the group. Together, they are what makes our outstanding performance sustainable and what provides us unmatched ability to create value to other banks that wish to join our group. together they are what makes our outstanding performance sustainable and what provides us unmatched ability to create value to other banks that wish to join our group The first strand of our DNA, the one that makes us truly unique, is our pan-European nature. the first strand of our dna the one that makes us truly unique is our pan-european nature Our strength lies in our ability to bring together more than 20 million high-quality, loyal clients through our 13 plus one leading commercial bank, with commanding market share in the most profitable and value-accretive segments in each market. our strength lies in our ability to bring together more than 20 million high-quality loyal clients through our 13 plus one leading commercial bank with commanding market share in the most profitable and value-accretive segments in each market We do this through a common vision and strategy, supported by shared product factories, increasingly shared technology and data platform, shared procurement, and the strengths of a combined balance sheet. we do this through a common vision and strategy supported by shared product factories increasingly shared technology and data platform shared procurement and the strengths of a combined balance sheet We have created a scale advantage for all our banks, enabling them to leverage the group. we have created a scale advantage for all our banks enabling them to leverage the group At the same time, they use our pan-European network to offer unique products and services, from trade finance to cross-border flows, on a level that few can match. This combination of scale, connectivity, and client quality makes UniCredit the partner of choice across Europe, a competitive edge that is difficult to replicate. That advantage translates directly into irreplicable and resilient revenues, quality and AIN fees, and a strong foundation for future growth. Because of our success in truly leveraging our European network, the second interconnected strand of our DNA is that we are and strive to continue to be a benchmark for banking. Over the past few years, we have identified and executed a transformation blueprint that many thought impossible and now many are trying to replicate. At the same time, they use our pan-European network to offer unique products and services, from trade finance to cross-border flows, on a level that few can match. at the same time they use our pan-european network to offer unique products and services from trade finance to cross-border flows on a level that few can match This combination of scale, connectivity, and client quality makes UniCredit the partner of choice across Europe, a competitive edge that is difficult to replicate. this combination of scale connectivity and client quality makes unicredit the partner of choice across europe a competitive edge that is difficult to replicate That advantage translates directly into irreplicable and resilient revenues, quality and AIN fees, and a strong foundation for future growth. that advantage translates directly into irreplicable and resilient revenues quality and ain fees and a strong foundation for future growth Because of our success in truly leveraging our European network, the second interconnected strand of our DNA is that we are and strive to continue to be a benchmark for banking. because of our success in truly leveraging our european network the second interconnected strand of our dna is that we are and strive to continue to be a benchmark for banking Over the past few years, we have identified and executed a transformation blueprint that many thought impossible and now many are trying to replicate. over the past few years we have identified and executed a transformation blueprint that many thought impossible and now many are trying to replicate We have shown that a large multi-country, complex institution can be simplified, can be empowered, can be brought together, and made more efficient and more profitable than others. In the first phase of our transformation, we unified the group under one purpose, one vision, and one set of values. We empowered our banks and our people, simplified our structure, and strengthened our ownership. We rebuilt the trust and passion critical to making the impossible possible. We increasingly leveraged our scale by integrating partnership, digital and data capabilities, procurement, and product factories under one common model. We invested in our people, in our technology, data and AI, product factories, and distribution channels, building the capabilities and infrastructure needed for long-term success. This transformation worked and is still ongoing. We have shown that a large multi-country, complex institution can be simplified, can be empowered, can be brought together, and made more efficient and more profitable than others. we have shown that a large multi-country complex institution can be simplified can be empowered can be brought together and made more efficient and more profitable than others In the first phase of our transformation, we unified the group under one purpose, one vision, and one set of values. in the first phase of our transformation we unified the group under one purpose one vision and one set of values We empowered our banks and our people, simplified our structure, and strengthened our ownership. we empowered our banks and our people simplified our structure and strengthened our ownership We rebuilt the trust and passion critical to making the impossible possible. we rebuilt the trust and passion critical to making the impossible possible We increasingly leveraged our scale by integrating partnership, digital and data capabilities, procurement, and product factories under one common model. we increasingly leveraged our scale by integrating partnership digital and data capabilities procurement and product factories under one common model We invested in our people, in our technology, data and AI, product factories, and distribution channels, building the capabilities and infrastructure needed for long-term success. we invested in our people in our technology data and ai product factories and distribution channels building the capabilities and infrastructure needed for long-term success This transformation worked and is still ongoing. this transformation worked and is still ongoing We delivered sector-leading efficiency both in how we operate and reward capital, while securing top-tier net revenue growth and moving our return on tangible equity from the bottom of the pack to the top. Our shareholder returns have been among the best in Europe. Such was the success of phase one that we were now able to seamlessly move to phase two, continuing to execute our multi-year transformation blueprint. Phase two further emphasizes the focus on the front line, on the top line, accelerating our profitable commercial growth in a targeted fashion while continuing to improve our operating model. We're moving forward with a clear set of initiatives, all designed to drive quality, scale, and long-term value. Our focus is sharper, our execution is faster, and our ambition is higher. We delivered sector-leading efficiency both in how we operate and reward capital, while securing top-tier net revenue growth and moving our return on tangible equity from the bottom of the pack to the top. we delivered sector-leading efficiency both in how we operate and reward capital while securing top-tier net revenue growth and moving our return on tangible equity from the bottom of the pack to the top Our shareholder returns have been among the best in Europe. our shareholder returns have been among the best in europe Such was the success of phase one that we were now able to seamlessly move to phase two, continuing to execute our multi-year transformation blueprint. such was the success of phase one that we were now able to seamlessly move to phase two continuing to execute our multi-year transformation blueprint Phase two further emphasizes the focus on the front line, on the top line, accelerating our profitable commercial growth in a targeted fashion while continuing to improve our operating model. phase two further emphasizes the focus on the front line on the top line accelerating our profitable commercial growth in a targeted fashion while continuing to improve our operating model We're moving forward with a clear set of initiatives, all designed to drive quality, scale, and long-term value. we're moving forward with a clear set of initiatives all designed to drive quality scale and long-term value Our focus is sharper, our execution is faster, and our ambition is higher. our focus is sharper our execution is faster and our ambition is higher We're directing capital and resources towards the most attractive opportunities, the right geographies, the right client segment, and the right product areas, ensuring every euro we invest delivers the highest possible return. We're expanding our product factories, deepening integration between them and our commercial banks, and capturing more of the value chain. We're accelerating in SMEs and private and affluent, where our franchise is strongest and our potential greatest. At the same time, we're transforming how we serve clients, moving decisively towards an omnichannel model that seamlessly combines physical and digital, giving every client the best experience UniCredit can offer. As always, our people remain at the heart of everything we do. We continue to increase the level of empowerment of our talent, the building of new skills, and the creation of an environment where innovation, ownership, and collaboration drive results. We're directing capital and resources towards the most attractive opportunities, the right geographies, the right client segment, and the right product areas, ensuring every euro we invest delivers the highest possible return. we're directing capital and resources towards the most attractive opportunities the right geographies the right client segment and the right product areas ensuring every euro we invest delivers the highest possible return We're expanding our product factories, deepening integration between them and our commercial banks, and capturing more of the value chain. we're expanding our product factories deepening integration between them and our commercial banks and capturing more of the value chain We're accelerating in SMEs and private and affluent, where our franchise is strongest and our potential greatest. we're accelerating in smes and private and affluent where our franchise is strongest and our potential greatest At the same time, we're transforming how we serve clients, moving decisively towards an omnichannel model that seamlessly combines physical and digital, giving every client the best experience UniCredit can offer. at the same time we're transforming how we serve clients moving decisively towards an omnichannel model that seamlessly combines physical and digital giving every client the best experience unicredit can offer As always, our people remain at the heart of everything we do. as always our people remain at the heart of everything we do We continue to increase the level of empowerment of our talent, the building of new skills, and the creation of an environment where innovation, ownership, and collaboration drive results. we continue to increase the level of empowerment of our talent the building of new skills and the creation of an environment where innovation ownership and collaboration drive results Phase two is about turning a proven blueprint into a compounding engine of growth, maintaining the efficiency, discipline, and strengths that define UniCredit today. The third strand of our DNA, the one that defines our future, is innovation. We're not only building the future of UniCredit, we're helping to shape the future of banking in Europe through our 13 markets. Innovation for us is not an add-on. It is a mindset, part of how we work every day, seeking to extract value from it. We have invested in a proprietary cloud-native core banking platform through our acquisition of Vodeno, bringing together best-in-class technology and AI, with scale to create a modern, agile foundation for the bank of tomorrow. We have brought in more than 200 outstanding engineers acting as an internal sandbox to support the modernization of our entire group. Phase two is about turning a proven blueprint into a compounding engine of growth, maintaining the efficiency, discipline, and strengths that define UniCredit today. phase two is about turning a proven blueprint into a compounding engine of growth maintaining the efficiency discipline and strengths that define unicredit today The third strand of our DNA, the one that defines our future, is innovation. the third strand of our dna the one that defines our future is innovation We're not only building the future of UniCredit, we're helping to shape the future of banking in Europe through our 13 markets. we're not only building the future of unicredit we're helping to shape the future of banking in europe through our 13 markets Innovation for us is not an add-on. innovation for us is not an add-on It is a mindset, part of how we work every day, seeking to extract value from it. it is a mindset part of how we work every day seeking to extract value from it We have invested in a proprietary cloud-native core banking platform through our acquisition of Vodeno, bringing together best-in-class technology and AI, with scale to create a modern, agile foundation for the bank of tomorrow. we have invested in a proprietary cloud-native core banking platform through our acquisition of vodeno bringing together best-in-class technology and ai with scale to create a modern agile foundation for the bank of tomorrow We have brought in more than 200 outstanding engineers acting as an internal sandbox to support the modernization of our entire group. we have brought in more than 200 outstanding engineers acting as an internal sandbox to support the modernization of our entire group We are investing in data and AI at scale, using them to transform how we serve clients, how we manage risk, and how we operate, with over 140 use cases currently alive and many more in development. We continue to innovate in the way we serve clients, letting them choose among our omnichannel. As an example, Buddy, our digital branch in Italy, onboarded 300,000 new clients in the nine months, reaching almost 800,000 clients. We're also carefully but actively shaping the future of digital assets in Europe, combining prudence and responsibility with innovation as we explore new frontiers in tokenization, payments, and secure digital value. Our innovation is not limited to technology. We are investing in data and AI at scale, using them to transform how we serve clients, how we manage risk, and how we operate, with over 140 use cases currently alive and many more in development. we are investing in data and ai at scale using them to transform how we serve clients how we manage risk and how we operate with over 140 use cases currently alive and many more in development We continue to innovate in the way we serve clients, letting them choose among our omnichannel. we continue to innovate in the way we serve clients letting them choose among our omnichannel As an example, Buddy, our digital branch in Italy, onboarded 300,000 new clients in the nine months, reaching almost 800,000 clients. as an example buddy our digital branch in italy onboarded 300,000 new clients in the nine months reaching almost 800,000 clients We're also carefully but actively shaping the future of digital assets in Europe, combining prudence and responsibility with innovation as we explore new frontiers in tokenization, payments, and secure digital value. we're also carefully but actively shaping the future of digital assets in europe combining prudence and responsibility with innovation as we explore new frontiers in tokenization payments and secure digital value Our innovation is not limited to technology. our innovation is not limited to technology In an environment of accelerated change, we're innovating in how we develop and reposition our people, our talent, in how we work and lead, empowering our people, promoting collaboration across borders, and creating an environment where ideas thrive and execution accelerates. Innovation is how we build the future for our clients, for our people, and for our bank. Crucially, this innovation is self-financed, made possible by the efficiencies and the profitability we have already achieved. The success of our strategy and our unique DNA are clearly reflected in today's results. We mark the 19th consecutive quarter of profitable growth, underpinning the best nine months in our history. It is proof that UniCredit has fundamentally transformed into a stronger, more resilient bank. We have outperformed across all key metrics, demonstrating consistent execution and the power of our model. Net revenues remain resilient, driven by better-than-expected NII, net of loan loss provision. In an environment of accelerated change, we're innovating in how we develop and reposition our people, our talent, in how we work and lead, empowering our people, promoting collaboration across borders, and creating an environment where ideas thrive and execution accelerates. in an environment of accelerated change we're innovating in how we develop and reposition our people our talent in how we work and lead empowering our people promoting collaboration across borders and creating an environment where ideas thrive and execution accelerates Innovation is how we build the future for our clients, for our people, and for our bank. innovation is how we build the future for our clients for our people and for our bank Crucially, this innovation is self-financed, made possible by the efficiencies and the profitability we have already achieved. crucially this innovation is self-financed made possible by the efficiencies and the profitability we have already achieved The success of our strategy and our unique DNA are clearly reflected in today's results. the success of our strategy and our unique dna are clearly reflected in today's results We mark the 19th consecutive quarter of profitable growth, underpinning the best nine months in our history. we mark the 19th consecutive quarter of profitable growth underpinning the best nine months in our history It is proof that UniCredit has fundamentally transformed into a stronger, more resilient bank. it is proof that unicredit has fundamentally transformed into a stronger more resilient bank We have outperformed across all key metrics, demonstrating consistent execution and the power of our model. we have outperformed across all key metrics demonstrating consistent execution and the power of our model Net revenues remain resilient, driven by better-than-expected NII, net of loan loss provision. net revenues remain resilient driven by better-than-expected nii net of loan loss provision We look at it that way, as NII cannot be separated from loan loss provisions. Robust fees, now including the internalization of Life Insurance in Italy, stronger contribution from investments that become a further core engine of our future net revenue growth. Trading, while temporarily affected by negative one-offs, still shows good underlying client-driven dynamic. These results underline the quality and increasing diversification of our top line. Operational excellence remains one of UniCredit's key differentiators. Cost fell again in the quarter and were broadly flat over the nine months, a remarkable achievement given the integration of new perimeters and continued investment in technology, people, and growth. Our cost-to-income ratio remains among the very best in Europe. Capital strength is confirmed, not only as an absolute number but also given our superior organic capital generation, now in line with net profit. Net revenues on RWAs remain strong. We look at it that way, as NII cannot be separated from loan loss provisions. we look at it that way as nii cannot be separated from loan loss provisions Robust fees, now including the internalization of Life Insurance in Italy, stronger contribution from investments that become a further core engine of our future net revenue growth. robust fees now including the internalization of life insurance in italy stronger contribution from investments that become a further core engine of our future net revenue growth Trading, while temporarily affected by negative one-offs, still shows good underlying client-driven dynamic. trading while temporarily affected by negative one-offs still shows good underlying client-driven dynamic These results underline the quality and increasing diversification of our top line. these results underline the quality and increasing diversification of our top line Operational excellence remains one of UniCredit's key differentiators. operational excellence remains one of unicredit's key differentiators Cost fell again in the quarter and were broadly flat over the nine months, a remarkable achievement given the integration of new perimeters and continued investment in technology, people, and growth. cost fell again in the quarter and were broadly flat over the nine months a remarkable achievement given the integration of new perimeters and continued investment in technology people and growth Our cost-to-income ratio remains among the very best in Europe. our cost-to-income ratio remains among the very best in europe Capital strength is confirmed, not only as an absolute number but also given our superior organic capital generation, now in line with net profit. capital strength is confirmed not only as an absolute number but also given our superior organic capital generation now in line with net profit Net revenues on RWAs remain strong. net revenues on rwas remain strong As a result, UniCredit's profitable growth remains best-in-class. Our top line remains resilient, with each one of its drivers performing better than expected. For the first nine months, net revenue stood at €18.5 billion, broadly stable despite headwind from lower rates. In the third quarter alone, net revenue reached €6.1 billion, up 1.2%. NII, net of LLPs, declined 4% in the nine months and 4.2% in the quarter, with cost of risk remaining benign at 10 basis points and gross NII performing better than anticipated at the beginning of the year. Margins were stable and loans grew circa 2% versus Q3 2024, end of period, partly offsetting the rates decline. Net NP and default rate both improved to 1.4% and 1.1%, respectively, confirming sound asset quality and coverage. We kept overlays unchanged at around €1.7 billion. NII ROIC at 19.2% remains best-in-class. As a result, UniCredit's profitable growth remains best-in-class. as a result unicredit's profitable growth remains best-in-class Our top line remains resilient, with each one of its drivers performing better than expected. our top line remains resilient with each one of its drivers performing better than expected For the first nine months, net revenue stood at €18.5 billion, broadly stable despite headwind from lower rates. for the first nine months net revenue stood at €18.5 billion broadly stable despite headwind from lower rates In the third quarter alone, net revenue reached €6.1 billion, up 1.2%. in the third quarter alone net revenue reached €6.1 billion up 1.2% NII, net of LLPs, declined 4% in the nine months and 4.2% in the quarter, with cost of risk remaining benign at 10 basis points and gross NII performing better than anticipated at the beginning of the year. nii net of llps declined 4% in the nine months and 4.2% in the quarter with cost of risk remaining benign at 10 basis points and gross nii performing better than anticipated at the beginning of the year Margins were stable and loans grew circa 2% versus Q3 2024, end of period, partly offsetting the rates decline. margins were stable and loans grew circa 2% versus q3 2024 end of period partly offsetting the rates decline Net NP and default rate both improved to 1.4% and 1.1%, respectively, confirming sound asset quality and coverage. net np and default rate both improved to 1.4% and 1.1% respectively confirming sound asset quality and coverage We kept overlays unchanged at around €1.7 billion. we kept overlays unchanged at around €1.7 billion NII ROIC at 19.2% remains best-in-class. nii roic at 19.2% remains best-in-class Fees and insurance income, which benefited from the internalization of Life Insurance and strong investment product performance, continues to grow, reaching €6.6 billion for the nine months, up 4.9%, and €2.1 billion in the quarter, up 7.6%. Investment contributed €693 million for the nine months, up 84%, and €248 million in the quarter, up 64%, mainly from the equity consolidation of Commerzbank. While 25% of the contribution of investment is offset by negative trading costs hitting the trading line, from 2026 onward, they will significantly propel our top line. Together, all this reinforces the sustainability of our earnings mix with fees and insurance income representing a top-tier share of revenues. Trading performance of €1.3 billion for the nine months, down 10%, was negatively affected by one-offs from the mentioned equity consolidation. Trading was up 4% in the quarter. Underlying trading remains solid and client-driven. Fees and insurance income, which benefited from the internalization of Life Insurance and strong investment product performance, continues to grow, reaching €6.6 billion for the nine months, up 4.9%, and €2.1 billion in the quarter, up 7.6%. fees and insurance income which benefited from the internalization of life insurance and strong investment product performance continues to grow reaching €6.6 billion for the nine months up 4.9% and €2.1 billion in the quarter up 7.6% Investment contributed €693 million for the nine months, up 84%, and €248 million in the quarter, up 64%, mainly from the equity consolidation of Commerzbank. investment contributed €693 million for the nine months up 84% and €248 million in the quarter up 64% mainly from the equity consolidation of commerzbank While 25% of the contribution of investment is offset by negative trading costs hitting the trading line, from 2026 onward, they will significantly propel our top line. while 25% of the contribution of investment is offset by negative trading costs hitting the trading line from 2026 onward they will significantly propel our top line Together, all this reinforces the sustainability of our earnings mix with fees and insurance income representing a top-tier share of revenues. together all this reinforces the sustainability of our earnings mix with fees and insurance income representing a top-tier share of revenues Trading performance of €1.3 billion for the nine months, down 10%, was negatively affected by one-offs from the mentioned equity consolidation. trading performance of €1.3 billion for the nine months down 10% was negatively affected by one-offs from the mentioned equity consolidation Trading was up 4% in the quarter. trading was up 4% in the quarter Underlying trading remains solid and client-driven. underlying trading remains solid and client-driven This diversified revenue base across products, geographies, and client segments ensures that UniCredit remains well-positioned to deliver quality growth even in a challenging environment. Our operational efficiency continues to set the benchmark. Costs were broadly flat over the nine months and in the quarter, fully absorbing the integration of Vodeno Ion, Life Insurance in Italy, and Alpha Bank Romania, as well as inflationary headwinds. Our cost-to-income ratio remains among the lowest in Europe at 36.8% in the nine months and 37.1% in the quarter. This reflects our ability to simplify, streamline, and automate while supporting rather than hindering our top-line growth. Our continued efficiency also allows us to invest wisely in people, in technology, in products and channels to make us ready for the future. This diversified revenue base across products, geographies, and client segments ensures that UniCredit remains well-positioned to deliver quality growth even in a challenging environment. this diversified revenue base across products geographies and client segments ensures that unicredit remains well-positioned to deliver quality growth even in a challenging environment Our operational efficiency continues to set the benchmark. our operational efficiency continues to set the benchmark Costs were broadly flat over the nine months and in the quarter, fully absorbing the integration of Vodeno Ion, Life Insurance in Italy, and Alpha Bank Romania, as well as inflationary headwinds. costs were broadly flat over the nine months and in the quarter fully absorbing the integration of vodeno ion life insurance in italy and alpha bank romania as well as inflationary headwinds Our cost-to-income ratio remains among the lowest in Europe at 36.8% in the nine months and 37.1% in the quarter. our cost-to-income ratio remains among the lowest in europe at 36.8% in the nine months and 37.1% in the quarter This reflects our ability to simplify, streamline, and automate while supporting rather than hindering our top-line growth. this reflects our ability to simplify streamline and automate while supporting rather than hindering our top-line growth Our continued efficiency also allows us to invest wisely in people, in technology, in products and channels to make us ready for the future. our continued efficiency also allows us to invest wisely in people in technology in products and channels to make us ready for the future This is a tested blueprint, streamlining where it matters, investing where it counts, and delivering operational excellence while laying the foundation for long-term growth without hindering present results. Our capital and capital efficiency remain best-in-class. Net revenue to RWA was broadly flat at 8.6% in the nine months and 8.4% in the quarter, notwithstanding the significant impact on NII from rates. Organic capital generation continues to be a key strength. We generated €7.9 billion, 283 basis points, allowing us to accrue 100% of distributable net profit as dividend and share buyback, most importantly, without denting our overall capital position. Our CET1 ratio stands at 14.8%, down 120 basis points due to the equity consolidation of Commerzbank. The regulatory impact of 14 basis points was almost entirely offset by other drivers. This is a tested blueprint, streamlining where it matters, investing where it counts, and delivering operational excellence while laying the foundation for long-term growth without hindering present results. this is a tested blueprint streamlining where it matters investing where it counts and delivering operational excellence while laying the foundation for long-term growth without hindering present results Our capital and capital efficiency remain best-in-class. our capital and capital efficiency remain best-in-class Net revenue to RWA was broadly flat at 8.6% in the nine months and 8.4% in the quarter, notwithstanding the significant impact on NII from rates. net revenue to rwa was broadly flat at 8.6% in the nine months and 8.4% in the quarter notwithstanding the significant impact on nii from rates Organic capital generation continues to be a key strength. organic capital generation continues to be a key strength We generated €7.9 billion, 283 basis points, allowing us to accrue 100% of distributable net profit as dividend and share buyback, most importantly, without denting our overall capital position. we generated €7.9 billion 283 basis points allowing us to accrue 100% of distributable net profit as dividend and share buyback most importantly without denting our overall capital position Our CET1 ratio stands at 14.8%, down 120 basis points due to the equity consolidation of Commerzbank. our cet1 ratio stands at 14.8% down 120 basis points due to the equity consolidation of commerzbank The regulatory impact of 14 basis points was almost entirely offset by other drivers. the regulatory impact of 14 basis points was almost entirely offset by other drivers On a pro forma basis, our CET1 is down to 14.6% due to the equity consolidation of the 26.6% of Alpha Bank stake, partly offset by the Danish compromise impact related to the internalization of Life Insurance in Italy. We continue to deliver quality, profitable growth underpinned by strong operating performance, complemented by one-offs, with net revenue, cost, and capital all better than our expectations. We're not just growing. We are growing with discipline. Our model continues to prove its strengths, delivering growth, profitability, efficiency, and capital strengths, and outsized distributions all at once. Italy continues to be our quality earnings powerhouse, accounting for 44% of group net profit. Net revenues are down 1.7% to €8.1 billion. NII, net of LLPs, declined 5.1%, primarily reflecting rate normalization, only partially mitigated by discipline pass-through management and benign cost of risk at 22 basis points. On a pro forma basis, our CET1 is down to 14.6% due to the equity consolidation of the 26.6% of Alpha Bank stake, partly offset by the Danish compromise impact related to the internalization of Life Insurance in Italy. on a pro forma basis our cet1 is down to 14.6% due to the equity consolidation of the 26.6% of alpha bank stake partly offset by the danish compromise impact related to the internalization of life insurance in italy We continue to deliver quality, profitable growth underpinned by strong operating performance, complemented by one-offs, with net revenue, cost, and capital all better than our expectations. we continue to deliver quality profitable growth underpinned by strong operating performance complemented by one-offs with net revenue cost and capital all better than our expectations We're not just growing. we're not just growing We are growing with discipline. we are growing with discipline Our model continues to prove its strengths, delivering growth, profitability, efficiency, and capital strengths, and outsized distributions all at once. our model continues to prove its strengths delivering growth profitability efficiency and capital strengths and outsized distributions all at once Italy continues to be our quality earnings powerhouse, accounting for 44% of group net profit. italy continues to be our quality earnings powerhouse accounting for 44% of group net profit Net revenues are down 1.7% to €8.1 billion. net revenues are down 1.7% to €8.1 billion NII, net of LLPs, declined 5.1%, primarily reflecting rate normalization, only partially mitigated by discipline pass-through management and benign cost of risk at 22 basis points. nii net of llps declined 5.1% primarily reflecting rate normalization only partially mitigated by discipline pass-through management and benign cost of risk at 22 basis points Asset quality remains robust, with stable coverage and decreasing default rate. Gross and net NPE ratios were broadly stable at 2.7% and 1.5%, respectively. Adjusting for state guarantees and considering Italian overlays, the net NPE ratio of Italy drops to zero. NII ROIC remains strong at 23.2%, thanks to our focus on margin over volume and targeted origination. Fees and insurance income grew 4.7%, reaching a top-tier 42% of revenues, driven by investment products up 7%, the contribution of Life Insurance internalization, and benefiting from one-off incentive scheme effect on payments. Costs were down 1.7% to €2.9 billion in Italy, bringing our cost-to-income ratio to 34.1%, the best in the country. Net revenue on RWAs remained broadly flat at 10.4%, also the best in Italy. Profit before tax, excluding one-off, rose 2.4% to €5.1 billion, with ROIC stable at above 32%, reinforcing our market leadership. Asset quality remains robust, with stable coverage and decreasing default rate. asset quality remains robust with stable coverage and decreasing default rate Gross and net NPE ratios were broadly stable at 2.7% and 1.5%, respectively. gross and net npe ratios were broadly stable at 2.7% and 1.5% respectively Adjusting for state guarantees and considering Italian overlays, the net NPE ratio of Italy drops to zero. adjusting for state guarantees and considering italian overlays the net npe ratio of italy drops to zero NII ROIC remains strong at 23.2%, thanks to our focus on margin over volume and targeted origination. nii roic remains strong at 23.2% thanks to our focus on margin over volume and targeted origination Fees and insurance income grew 4.7%, reaching a top-tier 42% of revenues, driven by investment products up 7%, the contribution of Life Insurance internalization, and benefiting from one-off incentive scheme effect on payments. fees and insurance income grew 4.7% reaching a top-tier 42% of revenues driven by investment products up 7% the contribution of life insurance internalization and benefiting from one-off incentive scheme effect on payments Costs were down 1.7% to €2.9 billion in Italy, bringing our cost-to-income ratio to 34.1%, the best in the country. costs were down 1.7% to €2.9 billion in italy bringing our cost-to-income ratio to 34.1% the best in the country Net revenue on RWAs remained broadly flat at 10.4%, also the best in Italy. net revenue on rwas remained broadly flat at 10.4% also the best in italy Profit before tax, excluding one-off, rose 2.4% to €5.1 billion, with ROIC stable at above 32%, reinforcing our market leadership. profit before tax excluding one-off rose 2.4% to €5.1 billion with roic stable at above 32% reinforcing our market leadership Italy exemplifies our strategy in action, focusing on quality, efficiency, and disciplined growth. Its performance underlines the strengths of our model and its ability to deliver across cycles. Germany continues to be a resilient anchor, accounting for 22% of group net profit. Net revenues are up 2.4% to €4 billion. NII net of LLPs grew 1%, thanks to discipline pass-through, the anticipated effect of trading normalization, and a decline in cost of risk at 14 basis points. Asset quality remains solid, with overlays broadly intact. Net NPE ratio is down to 1.4%, with stable coverage and default rate decreased. We keep strong attention to single file, given the corporate nature of our bank. NII ROIC remains strong at 21%, reflecting our focus on margin over volume and selective origination. Italy exemplifies our strategy in action, focusing on quality, efficiency, and disciplined growth. italy exemplifies our strategy in action focusing on quality efficiency and disciplined growth Its performance underlines the strengths of our model and its ability to deliver across cycles. its performance underlines the strengths of our model and its ability to deliver across cycles Germany continues to be a resilient anchor, accounting for 22% of group net profit. germany continues to be a resilient anchor accounting for 22% of group net profit Net revenues are up 2.4% to €4 billion. net revenues are up 2.4% to €4 billion NII net of LLPs grew 1%, thanks to discipline pass-through, the anticipated effect of trading normalization, and a decline in cost of risk at 14 basis points. nii net of llps grew 1% thanks to discipline pass-through the anticipated effect of trading normalization and a decline in cost of risk at 14 basis points Asset quality remains solid, with overlays broadly intact. asset quality remains solid with overlays broadly intact Net NPE ratio is down to 1.4%, with stable coverage and default rate decreased. net npe ratio is down to 1.4% with stable coverage and default rate decreased We keep strong attention to single file, given the corporate nature of our bank. we keep strong attention to single file given the corporate nature of our bank NII ROIC remains strong at 21%, reflecting our focus on margin over volume and selective origination. nii roic remains strong at 21% reflecting our focus on margin over volume and selective origination Fees and insurance income grew 0.9%, reaching 31% of revenue, driven by investment products up 11%, partly offset by weaker financing activity. Costs were down 2.8%, bringing our cost-to-income ratio to 37.6%, the best in Germany. Net revenue on RWAs at 8% confirms strong capital efficiency. Profit before tax at €2.4 billion is up 7.2%, with ROIC at 23.4%, reinforcing our market leadership. Germany is a clear example of our ability to consistently deliver through disciplined execution. Its performance highlights the strengths of our diversified model, with resilience, efficiency, and capital discipline driving record profitability and reinforcing our quality leadership in the market. Austria continues to be a resilient anchor, accounting for 12% of group net profit. Net revenues are down 1.4% to €2 billion. NII net of LLPs declined 5.7%, only partially mitigated by loan growth at 1.3% at stable margin. Asset quality remains solid, with overlays intact. Fees and insurance income grew 0.9%, reaching 31% of revenue, driven by investment products up 11%, partly offset by weaker financing activity. fees and insurance income grew 0.9% reaching 31% of revenue driven by investment products up 11% partly offset by weaker financing activity Costs were down 2.8%, bringing our cost-to-income ratio to 37.6%, the best in Germany. costs were down 2.8% bringing our cost-to-income ratio to 37.6% the best in germany Net revenue on RWAs at 8% confirms strong capital efficiency. net revenue on rwas at 8% confirms strong capital efficiency Profit before tax at €2.4 billion is up 7.2%, with ROIC at 23.4%, reinforcing our market leadership. profit before tax at €2.4 billion is up 7.2% with roic at 23.4% reinforcing our market leadership Germany is a clear example of our ability to consistently deliver through disciplined execution. germany is a clear example of our ability to consistently deliver through disciplined execution Its performance highlights the strengths of our diversified model, with resilience, efficiency, and capital discipline driving record profitability and reinforcing our quality leadership in the market. its performance highlights the strengths of our diversified model with resilience efficiency and capital discipline driving record profitability and reinforcing our quality leadership in the market Austria continues to be a resilient anchor, accounting for 12% of group net profit. austria continues to be a resilient anchor accounting for 12% of group net profit Net revenues are down 1.4% to €2 billion. net revenues are down 1.4% to €2 billion NII net of LLPs declined 5.7%, only partially mitigated by loan growth at 1.3% at stable margin. nii net of llps declined 5.7% only partially mitigated by loan growth at 1.3% at stable margin Asset quality remains solid, with overlays intact. asset quality remains solid with overlays intact Net NPE ratio is down to 2%, with stable coverage and default rate further decreased. NII ROIC at 14% confirms disciplined origination. Fees and insurance income grew 5.2%, 8.2% excluding card complete disposal, reaching 31% of revenue, supported by advisory and financing and strong investment products up 10%. Costs were broadly flat, bringing our cost-to-income ratio to 38.9%. Net revenue on RWAs at 6.7% confirms strong capital efficiency. Profit before tax at €1.2 billion, down 3.8%, broadly flat excluding the new bank levy, with ROIC at 22.8%, reinforcing our profitability leadership in Austria. Austria showcases the power of our focused strategy, combining profitability, efficiency, and prudent risk management. Its performance confirms our ability to lead in corporate lending while maintaining exceptional asset quality and strong return. Central and Eastern Europe continues to be our growth engine, accounting for 22% of group net profits. Net NPE ratio is down to 2%, with stable coverage and default rate further decreased. net npe ratio is down to 2% with stable coverage and default rate further decreased NII ROIC at 14% confirms disciplined origination. nii roic at 14% confirms disciplined origination Fees and insurance income grew 5.2%, 8.2% excluding card complete disposal, reaching 31% of revenue, supported by advisory and financing and strong investment products up 10%. fees and insurance income grew 5.2% 8.2% excluding card complete disposal reaching 31% of revenue supported by advisory and financing and strong investment products up 10% Costs were broadly flat, bringing our cost-to-income ratio to 38.9%. costs were broadly flat bringing our cost-to-income ratio to 38.9% Net revenue on RWAs at 6.7% confirms strong capital efficiency. net revenue on rwas at 6.7% confirms strong capital efficiency Profit before tax at € 1.2 billion, down 3.8%, broadly flat excluding the new bank levy, with ROIC at 22.8%, reinforcing our profitability leadership in Austria. profit before tax at € 1.2 billion down 3.8% broadly flat excluding the new bank levy with roic at 22.8% reinforcing our profitability leadership in austria Austria showcases the power of our focused strategy, combining profitability, efficiency, and prudent risk management. austria showcases the power of our focused strategy combining profitability efficiency and prudent risk management Its performance confirms our ability to lead in corporate lending while maintaining exceptional asset quality and strong return. its performance confirms our ability to lead in corporate lending while maintaining exceptional asset quality and strong return Central and Eastern Europe continues to be our growth engine, accounting for 22% of group net profits. central and eastern europe continues to be our growth engine accounting for 22% of group net profits Its role as a key profitable growth driver will fully emerge once its cost of risk fully normalizes. Net revenues are up 1.7% to €3.5 billion. NII net of LLPs declined 4%, the strong loan growth of 13.5%, including the contribution from Alpha Bank Romania, 8.5% without, was able to only partially mitigate the expected rates decline and Central and Eastern Europe cost of risk increase at 5 basis points from minus 25 basis points as it gradually normalizes. Asset quality remains solid, with net NPE ratio stable at 0.9%, growing coverage ratio at above 64%, and default rate stable. NII ROIC remains strong at 24%, confirming disciplined margin management. Fees and insurance income grew 13.3%, reaching around 29% of revenues, supported by broad-based contribution across countries, with particularly strong performance in advisory and investment products up 24%. Its role as a key profitable growth driver will fully emerge once its cost of risk fully normalizes. its role as a key profitable growth driver will fully emerge once its cost of risk fully normalizes Net revenues are up 1.7% to € 3.5 billion. net revenues are up 1.7% to € 3.5 billion NII net of LLPs declined 4%, the strong loan growth of 13.5%, including the contribution from Alpha Bank Romania, 8.5% without, was able to only partially mitigate the expected rates decline and Central and Eastern Europe cost of risk increase at 5 basis points from minus 25 basis points as it gradually normalizes. nii net of llps declined 4% the strong loan growth of 13.5% including the contribution from alpha bank romania 8.5% without was able to only partially mitigate the expected rates decline and central and eastern europe cost of risk increase at 5 basis points from minus 25 basis points as it gradually normalizes Asset quality remains solid, with net NPE ratio stable at 0.9%, growing coverage ratio at above 64%, and default rate stable. asset quality remains solid with net npe ratio stable at 0.9% growing coverage ratio at above 64% and default rate stable NII ROIC remains strong at 24%, confirming disciplined margin management. nii roic remains strong at 24% confirming disciplined margin management Fees and insurance income grew 13.3%, reaching around 29% of revenues, supported by broad-based contribution across countries, with particularly strong performance in advisory and investment products up 24%. fees and insurance income grew 13.3% reaching around 29% of revenues supported by broad-based contribution across countries with particularly strong performance in advisory and investment products up 24% Costs increased 12.4%, 2.7% on a constant perimeter, so excluding Alpha Bank Romania, bringing our cost-to-income ratio to 33.8%. Net revenue on RWAs at 8.5% confirms strong capital efficiency. Profit before tax at €2.1 billion, down 1.8%, with ROIC at almost 30%. CEE continues to demonstrate the success of our growth strategy, with broad-based momentum across countries and products. Its performance underlines our ability to scale profitably, diversify earnings, and deliver sustainable value across the region. Our Russian bank is now a highly focused franchise. Local loans and deposits account both less than 0.5% of group. Cross-border payments focused on now euro and U.S. dollar account for less than 2% of group. No cross-border lending exposure remains, and a positive liquidity contribution from Russia to the rest of the group still exists. Costs increased 12.4%, 2.7% on a constant perimeter, so excluding Alpha Bank Romania, bringing our cost-to-income ratio to 33.8%. costs increased 12.4% 2.7% on a constant perimeter so excluding alpha bank romania bringing our cost-to-income ratio to 33.8% Net revenue on RWAs at 8.5% confirms strong capital efficiency. net revenue on rwas at 8.5% confirms strong capital efficiency Profit before tax at € 2.1 billion, down 1.8%, with ROIC at almost 30%. profit before tax at € 2.1 billion down 1.8% with roic at almost 30% CEE continues to demonstrate the success of our growth strategy, with broad-based momentum across countries and products. cee continues to demonstrate the success of our growth strategy with broad-based momentum across countries and products Its performance underlines our ability to scale profitably, diversify earnings, and deliver sustainable value across the region. its performance underlines our ability to scale profitably diversify earnings and deliver sustainable value across the region Our Russian bank is now a highly focused franchise. our russian bank is now a highly focused franchise Local loans and deposits account both less than 0.5% of group. local loans and deposits account both less than 0.5% of group Cross-border payments focused on now euro and U.S. dollar account for less than 2% of group. cross-border payments focused on now euro and u.s dollar account for less than 2% of group No cross-border lending exposure remains, and a positive liquidity contribution from Russia to the rest of the group still exists. no cross-border lending exposure remains and a positive liquidity contribution from russia to the rest of the group still exists We have achieved this significant reduction at minimum cost, both in the interest of our shareholders and in adherence to the spirit and law of sanctions. Our Russian bank is ring-fenced and operates strictly within all legal and regulatory requirements. This franchise is managed in a controlled and disciplined way, ensuring stability and compliance while minimizing risk. The exposure on CET1 from extreme loss scenario has declined from circa 130 basis points to circa 80 basis points, mainly connected to retained earnings. Client solution remains a cornerstone of leveraging group scale. Product factories that support our banks and our partners in delivering capital-light, fee-driven growth while also accelerating their NII from specialty areas. Net revenues reach €9 billion, up 7%, and fees €6 billion, up 4%, confirming the strengths and diversification of our product portfolio. We have achieved this significant reduction at minimum cost, both in the interest of our shareholders and in adherence to the spirit and law of sanctions. we have achieved this significant reduction at minimum cost both in the interest of our shareholders and in adherence to the spirit and law of sanctions Our Russian bank is ring-fenced and operates strictly within all legal and regulatory requirements. our russian bank is ring-fenced and operates strictly within all legal and regulatory requirements This franchise is managed in a controlled and disciplined way, ensuring stability and compliance while minimizing risk. this franchise is managed in a controlled and disciplined way ensuring stability and compliance while minimizing risk The exposure on CET1 from extreme loss scenario has declined from circa 130 basis points to circa 80 basis points, mainly connected to retained earnings. the exposure on cet1 from extreme loss scenario has declined from circa 130 basis points to circa 80 basis points mainly connected to retained earnings Client solution remains a cornerstone of leveraging group scale. client solution remains a cornerstone of leveraging group scale Product factories that support our banks and our partners in delivering capital-light, fee-driven growth while also accelerating their NII from specialty areas. product factories that support our banks and our partners in delivering capital-light fee-driven growth while also accelerating their nii from specialty areas Net revenues reach €9 billion, up 7%, and fees €6 billion, up 4%, confirming the strengths and diversification of our product portfolio. net revenues reach €9 billion up 7% and fees €6 billion up 4% confirming the strengths and diversification of our product portfolio Investment products delivered record performance, with fees up 9% to €1.9 billion and AUM and AUA up 14% to €186 billion. Our one-market funds reached €28 billion, up 68% year-over-year, supporting the internalization of almost 80% of our value chain still going. Insurance has become a major growth pillar, with fees and insurance result up 12% to €700 million. Following the internalization of Life Insurance, we are now the fourth largest player in Italy, with €46 billion in reserves. Payment fees were up 2%, also benefiting from timing of yearly incentive paid in Q3. In a segment affected by headwind, such as new regulation on instant payment, this is a great result. We are top three in four European markets in issuing and acquiring, and we're awarded Best Cash Management Bank in seven countries by Euromoney. Investment products delivered record performance, with fees up 9% to €1.9 billion and AUM and AUA up 14% to €186 billion. investment products delivered record performance with fees up 9% to €1.9 billion and aum and aua up 14% to €186 billion Our one-market funds reached €28 billion, up 68% year-over-year, supporting the internalization of almost 80% of our value chain still going. our one-market funds reached €28 billion up 68% year-over-year supporting the internalization of almost 80% of our value chain still going Insurance has become a major growth pillar, with fees and insurance result up 12% to €700 million. insurance has become a major growth pillar with fees and insurance result up 12% to €700 million Following the internalization of Life Insurance, we are now the fourth largest player in Italy, with €46 billion in reserves. following the internalization of life insurance we are now the fourth largest player in italy with €46 billion in reserves Payment fees were up 2%, also benefiting from timing of yearly incentive paid in Q3. payment fees were up 2% also benefiting from timing of yearly incentive paid in q3 In a segment affected by headwind, such as new regulation on instant payment, this is a great result. in a segment affected by headwind such as new regulation on instant payment this is a great result We are top three in four European markets in issuing and acquiring, and we're awarded Best Cash Management Bank in seven countries by Euromoney. we are top three in four european markets in issuing and acquiring and we're awarded best cash management bank in seven countries by euromoney Advisory and financing maintains a top three position in bonds and loans by fees in Italy and in Germany. Client risk management was up 13% and reached a return on allocated capital of 43%, driven by high-quality client-centric activities. Trade and correspondent banking remains a leader, with top three position in every country in which we operate and a cross-border market share five times higher than any domestic one. These factories are client-centric and scalable, a key driver of our unlocking acceleration strategy, enabling us to retain more of a value chain. In conclusion, we have delivered another record quarter, completing the best nine months in UniCredit history. This marks our 19th consecutive quarter of quality, profitable growth, and a clear beat across all our KPIs. Our strategy is working. Advisory and financing maintains a top three position in bonds and loans by fees in Italy and in Germany. advisory and financing maintains a top three position in bonds and loans by fees in italy and in germany Client risk management was up 13% and reached a return on allocated capital of 43%, driven by high-quality client-centric activities. client risk management was up 13% and reached a return on allocated capital of 43% driven by high-quality client-centric activities Trade and correspondent banking remains a leader, with top three position in every country in which we operate and a cross-border market share five times higher than any domestic one. trade and correspondent banking remains a leader with top three position in every country in which we operate and a cross-border market share five times higher than any domestic one These factories are client-centric and scalable, a key driver of our unlocking acceleration strategy, enabling us to retain more of a value chain. these factories are client-centric and scalable a key driver of our unlocking acceleration strategy enabling us to retain more of a value chain In conclusion, we have delivered another record quarter, completing the best nine months in UniCredit history. in conclusion we have delivered another record quarter completing the best nine months in unicredit history This marks our 19th consecutive quarter of quality, profitable growth, and a clear beat across all our KPIs. this marks our 19th consecutive quarter of quality profitable growth and a clear beat across all our kpis Our strategy is working. our strategy is working We're leveraging our unique DNA as a pan-European leader, serving a high-quality client base through 13 leading banks and one partner, demonstrating the validity and the strengths of our unique model, as we also stand as a benchmark for banking. We're sustainably accelerating growth, well ahead to what we expected at the beginning of the year, relentlessly executing while continuing to invest and innovate for the future. We have reinforced our double-digit growth trajectory in EPS and DPS, intangible book per share, maintaining a return on tangible equity greater than 20%. This places us in a leading position now and in the future. We have reinforced our expected distribution with higher dividend and ordinary share buybacks, placing us again at the top of the peer group for the 2025-2027 period and beyond. We're leveraging our unique DNA as a pan-European leader, serving a high-quality client base through 13 leading banks and one partner, demonstrating the validity and the strengths of our unique model, as we also stand as a benchmark for banking. we're leveraging our unique dna as a pan-european leader serving a high-quality client base through 13 leading banks and one partner demonstrating the validity and the strengths of our unique model as we also stand as a benchmark for banking We're sustainably accelerating growth, well ahead to what we expected at the beginning of the year, relentlessly executing while continuing to invest and innovate for the future. we're sustainably accelerating growth well ahead to what we expected at the beginning of the year relentlessly executing while continuing to invest and innovate for the future We have reinforced our double-digit growth trajectory in EPS and DPS, intangible book per share, maintaining a return on tangible equity greater than 20%. we have reinforced our double-digit growth trajectory in eps and dps intangible book per share maintaining a return on tangible equity greater than 20% This places us in a leading position now and in the future. this places us in a leading position now and in the future We have reinforced our expected distribution with higher dividend and ordinary share buybacks, placing us again at the top of the peer group for the 2025-2027 period and beyond. we have reinforced our expected distribution with higher dividend and ordinary share buybacks placing us again at the top of the peer group for the 2025-2027 period and beyond UniCredit continues to create superior value for all stakeholders, delivering this quarter a great performance with great prospects and great present and future shareholders' returns, and it's today stronger, more resilient, and better positioned than ever. Thank you, and we will now open to questions. UniCredit continues to create superior value for all stakeholders, delivering this quarter a great performance with great prospects and great present and future shareholders' returns, and it's today stronger, more resilient, and better positioned than ever. unicredit continues to create superior value for all stakeholders delivering this quarter a great performance with great prospects and great present and future shareholders' returns and it's today stronger more resilient and better positioned than ever Thank you, and we will now open to questions. thank you and we will now open to questions

Speaker 3: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Anyone who has a question may press star and one at this time. In the interest of time, we ask that you please limit yourself to two questions and one quick clarification point per caller. The first question is from Ignacio Ulargui, at BNP Paribas. Please go ahead. Thank you. thank you We will now begin the question and answer session. we will now begin the question and answer session Anyone who wishes to ask a question may press star and one on their touch-tone telephone. anyone who wishes to ask a question may press star and one on their touch-tone telephone To remove yourself from the question queue, please press star and two. to remove yourself from the question queue please press star and two Anyone who has a question may press star and one at this time. anyone who has a question may press star and one at this time In the interest of time, we ask that you please limit yourself to two questions and one quick clarification point per caller. in the interest of time we ask that you please limit yourself to two questions and one quick clarification point per caller The first question is from Ignacio Ulargui, at BNP Paribas. the first question is from ignacio ulargui at bnp paribas Please go ahead. please go ahead

Speaker 1: Thanks very much for the presentation and for taking my questions. I have two questions. The first one is focusing on loan growth and the kind of expectation of acceleration of growth that you see when you get a bit of a sense of how that trend is going in Germany and Italy particularly. The second question is on the potential measures that you might take for improving the P&L in 2026 and 2027. You could give us a bit of a sense of the magnitude of it and the focus because, if I understood correctly, you said during the call that it may not be that focused on cost, more on investments. I just wanted to get a bit of color about that. Thanks very much for the presentation and for taking my questions. thanks very much for the presentation and for taking my questions I have two questions. i have two questions The first one is focusing on loan growth and the kind of expectation of acceleration of growth that you see when you get a bit of a sense of how that trend is going in Germany and Italy particularly. the first one is focusing on loan growth and the kind of expectation of acceleration of growth that you see when you get a bit of a sense of how that trend is going in germany and italy particularly The second question is on the potential measures that you might take for improving the P&L in 2026 and 2027. the second question is on the potential measures that you might take for improving the p&l in 2026 and 2027 You could give us a bit of a sense of the magnitude of it and the focus because, if I understood correctly, you said during the call that it may not be that focused on cost, more on investments. you could give us a bit of a sense of the magnitude of it and the focus because if i understood correctly you said during the call that it may not be that focused on cost more on investments I just wanted to get a bit of color about that. i just wanted to get a bit of color about that If I can make a final clarification on the distribution and share buyback, if I just look to consensus, consensus has around €13 billion of share buyback. Currently, if I just look to your numbers, you get €11.5 billion. Could that be breached through extraordinary distributions? Thank you. If I can make a final clarification on the distribution and share buyback, if I just look to consensus, consensus has around €13 billion of share buyback. if i can make a final clarification on the distribution and share buyback if i just look to consensus consensus has around €13 billion of share buyback Currently, if I just look to your numbers, you get €11.5 billion. currently if i just look to your numbers you get €11.5 billion Could that be breached through extraordinary distributions? could that be breached through extraordinary distributions Thank you. thank you

Speaker 10: Okay. Let me start on loan growth. As we said, probably conservatively from the very beginning, to see significant loan growth at stable or improving margins, you need to see economic development, investment, and actual people wanting loans. If you push loan growth against the wall, you're going to reduce your margins. As we said many times, margins trump volume three to one. It may look quite good on the top line, but honestly, over time, you're denting profitability and it's difficult to recover. With that caveat and applying that discipline to how we grow, we're seeing significant progress in loan growth in Italy, and we believe that such progress is going to accelerate markedly in 2026 and beyond. Why that? For mainly two reasons. Okay. okay Let me start on loan growth. let me start on loan growth As we said, probably conservatively from the very beginning, to see significant loan growth at stable or improving margins, you need to see economic development, investment, and actual people wanting loans. as we said probably conservatively from the very beginning to see significant loan growth at stable or improving margins you need to see economic development investment and actual people wanting loans If you push loan growth against the wall, you're going to reduce your margins. if you push loan growth against the wall you're going to reduce your margins As we said many times, margins trump volume three to one. as we said many times margins trump volume three to one It may look quite good on the top line, but honestly, over time, you're denting profitability and it's difficult to recover. it may look quite good on the top line but honestly over time you're denting profitability and it's difficult to recover With that caveat and applying that discipline to how we grow, we're seeing significant progress in loan growth in Italy, and we believe that such progress is going to accelerate markedly in 2026 and beyond. with that caveat and applying that discipline to how we grow we're seeing significant progress in loan growth in italy and we believe that such progress is going to accelerate markedly in 2026 and beyond Why that? why that For mainly two reasons. for mainly two reasons The main reason is that, like the rest of the group, we have almost completed all the actions to bring our loan portfolio to the profitability it has today, with a very marginal amount of loans still below EVA. Why is that important? Because in order to do that, we delivered what we delivered in the past, but we had a drag as we purged off positions that were not meeting our benchmark. We no longer have to do that. Look at what that means now. Secondly, post the withdrawal of our offer of BPM, we have gone back to the drawing board and re-examined the plan we were about to launch last year within the acceleration phase that we put on hold because of the acquisition or possible acquisition. The main reason is that, like the rest of the group, we have almost completed all the actions to bring our loan portfolio to the profitability it has today, with a very marginal amount of loans still below EVA. the main reason is that like the rest of the group we have almost completed all the actions to bring our loan portfolio to the profitability it has today with a very marginal amount of loans still below eva Why is that important? why is that important Because in order to do that, we delivered what we delivered in the past, but we had a drag as we purged off positions that were not meeting our benchmark. because in order to do that we delivered what we delivered in the past but we had a drag as we purged off positions that were not meeting our benchmark We no longer have to do that. we no longer have to do that Look at what that means now. look at what that means now Secondly, post the withdrawal of our offer of BPM, we have gone back to the drawing board and re-examined the plan we were about to launch last year within the acceleration phase that we put on hold because of the acquisition or possible acquisition. secondly post the withdrawal of our offer of bpm we have gone back to the drawing board and re-examined the plan we were about to launch last year within the acceleration phase that we put on hold because of the acquisition or possible acquisition That plan has been boosted, and we actually believe, and watch for space, that we will be profitably gaining market share next year in the country. That will drive a significant portion of Italy's results. On Germany, I would just say the usual same thing, but different. We have a bank that is focused. Obviously, there was no M&A situation there, and that is now well set after all the changes we've done in the business, in the operating machine, and in other places to grow profitably. We still see some headwinds from some competitors, if I may, damping on to achieve volume. We will not be drawn in that, but we believe that we can grow even without that, and we will demonstrate that that is possible. That plan has been boosted, and we actually believe, and watch for space, that we will be profitably gaining market share next year in the country. that plan has been boosted and we actually believe and watch for space that we will be profitably gaining market share next year in the country That will drive a significant portion of Italy's results. that will drive a significant portion of italy's results On Germany, I would just say the usual same thing, but different. on germany i would just say the usual same thing but different We have a bank that is focused. we have a bank that is focused Obviously, there was no M&A situation there, and that is now well set after all the changes we've done in the business, in the operating machine, and in other places to grow profitably. obviously there was no m&a situation there and that is now well set after all the changes we've done in the business in the operating machine and in other places to grow profitably We still see some headwinds from some competitors, if I may, damping on to achieve volume. we still see some headwinds from some competitors if i may damping on to achieve volume We will not be drawn in that, but we believe that we can grow even without that, and we will demonstrate that that is possible. we will not be drawn in that but we believe that we can grow even without that and we will demonstrate that that is possible I am positive on that as well, and I am positive that in the target segment of Mittelstand, affluent, and private, we will be gaining growth or market share. In terms of potential measures to improve, first of all, why do we have these potential measures? We have potential measures because once we announced our phase two of UniCredit Unlocked acceleration, there were a few things that were different. Number one, our view on macro was more negative than it is now, having not on macro itself, but how we navigate macro. Number two, we did not have the extra boost that we believe we're going to have primarily in Italy, but also in the rest of the group. Number three, and most important of all, we had not witnessed what this franchise can do. I am positive on that as well, and I am positive that in the target segment of Mittelstand, affluent, and private, we will be gaining growth or market share. i am positive on that as well and i am positive that in the target segment of mittelstand affluent and private we will be gaining growth or market share In terms of potential measures to improve, first of all, why do we have these potential measures? in terms of potential measures to improve first of all why do we have these potential measures We have potential measures because once we announced our phase two of UniCredit Unlocked acceleration, there were a few things that were different. we have potential measures because once we announced our phase two of unicredit unlocked acceleration there were a few things that were different Number one, our view on macro was more negative than it is now, having not on macro itself, but how we navigate macro. number one our view on macro was more negative than it is now having not on macro itself but how we navigate macro Number two, we did not have the extra boost that we believe we're going to have primarily in Italy, but also in the rest of the group. number two we did not have the extra boost that we believe we're going to have primarily in italy but also in the rest of the group Number three, and most important of all, we had not witnessed what this franchise can do. number three and most important of all we had not witnessed what this franchise can do If you go back to my comments, we were ahead of expectation in our acceleration in Q1. I repeated the same in Q2. I'm repeating the same in Q3. That gives me a lot of confidence that our acceleration can go further. As we go further in our acceleration, like in any acceleration, our businesses in the process of preparing the new multi-year plan, which is not approved yet, so I'm not anticipating anything, are requesting further investment in order to underpin that acceleration. There's only so much you can do with gains in efficiency, which, by the way, we will continue to make. To harness the acceleration we want, we need positive investment. How does it change? It changed that if you look at the past, most of our investment was targeted to efficiency, and we let the network, the client franchise run, and they did an excellent job. If you go back to my comments, we were ahead of expectation in our acceleration in Q1. if you go back to my comments we were ahead of expectation in our acceleration in q1 I repeated the same in Q2. i repeated the same in q2 I'm repeating the same in Q3. i'm repeating the same in q3 That gives me a lot of confidence that our acceleration can go further. that gives me a lot of confidence that our acceleration can go further As we go further in our acceleration, like in any acceleration, our businesses in the process of preparing the new multi-year plan, which is not approved yet, so I'm not anticipating anything, are requesting further investment in order to underpin that acceleration. as we go further in our acceleration like in any acceleration our businesses in the process of preparing the new multi-year plan which is not approved yet so i'm not anticipating anything are requesting further investment in order to underpin that acceleration There's only so much you can do with gains in efficiency, which, by the way, we will continue to make. there's only so much you can do with gains in efficiency which by the way we will continue to make To harness the acceleration we want, we need positive investment. to harness the acceleration we want we need positive investment How does it change? how does it change It changed that if you look at the past, most of our investment was targeted to efficiency, and we let the network, the client franchise run, and they did an excellent job. it changed that if you look at the past most of our investment was targeted to efficiency and we let the network the client franchise run and they did an excellent job The action we are now considering for the rolling of a new MYP is much more targeted than before on top-line acceleration. It means you're going to look at hiring. Italy will hire in spades. Training. Italy will train in spades, so will Germany and the other countries. Digitalization of our omnichannel to make sure clients feel a seamless experience if they go to the branch, to mobile first, internet, Buddy bank, and I can continue, rather than pigeonholing them into a segment we think that that is the future. That requires continued investment. As you know, we've invested about €1 billion group-wide in modernizing our physical presence. We've invested another bunch in mobile first, in technology, etc. for our network. We will accelerate that. The action we are now considering for the rolling of a new MYP is much more targeted than before on top-line acceleration. the action we are now considering for the rolling of a new myp is much more targeted than before on top-line acceleration It means you're going to look at hiring. it means you're going to look at hiring Italy will hire in spades. italy will hire in spades Training. training Italy will train in spades, so will Germany and the other countries. italy will train in spades so will germany and the other countries Digitalization of our omnichannel to make sure clients feel a seamless experience if they go to the branch, to mobile first, internet, Buddy bank, and I can continue, rather than pigeonholing them into a segment we think that that is the future. digitalization of our omnichannel to make sure clients feel a seamless experience if they go to the branch to mobile first internet buddy bank and i can continue rather than pigeonholing them into a segment we think that that is the future That requires continued investment. that requires continued investment As you know, we've invested about € 1 billion group-wide in modernizing our physical presence. as you know we've invested about € 1 billion group-wide in modernizing our physical presence We've invested another bunch in mobile first, in technology, etc. for our network. we've invested another bunch in mobile first in technology etc for our network We will accelerate that. we will accelerate that There are also some other levers that we can pull to further insulate group results from either adverse effect or accelerate them and that we are considering now. With the MYP of, at that point, 2026-2028, we will be reviewing and hopefully upgrading our ambition. In order to support that greater ambition, we will take on a year that honestly has some unknowns in it, some of that sunshine to further propel our future. We don't have an amount yet. We are taking from bottom up from every business and area what they would wish, and the commitment that they're making is still premature to discuss. It was correct to raise that possibility because now it is a possibility. On distributions, I would like to make the following comments because maybe I look at them in a different way than everybody looks at them. There are also some other levers that we can pull to further insulate group results from either adverse effect or accelerate them and that we are considering now. there are also some other levers that we can pull to further insulate group results from either adverse effect or accelerate them and that we are considering now With the MYP of, at that point, 2026-2028, we will be reviewing and hopefully upgrading our ambition. with the myp of at that point 2026-2028 we will be reviewing and hopefully upgrading our ambition In order to support that greater ambition, we will take on a year that honestly has some unknowns in it, some of that sunshine to further propel our future. in order to support that greater ambition we will take on a year that honestly has some unknowns in it some of that sunshine to further propel our future We don't have an amount yet. we don't have an amount yet We are taking from bottom up from every business and area what they would wish, and the commitment that they're making is still premature to discuss. we are taking from bottom up from every business and area what they would wish and the commitment that they're making is still premature to discuss It was correct to raise that possibility because now it is a possibility. it was correct to raise that possibility because now it is a possibility On distributions, I would like to make the following comments because maybe I look at them in a different way than everybody looks at them. on distributions i would like to make the following comments because maybe i look at them in a different way than everybody looks at them There is only one distribution that ends up in the pocket of our shareholders. That is called dividend. It's a cash payment that hits your account. When I do share buybacks, by reducing the share count on the same earnings, we are obviously accelerating the EPS and accelerating the DPS, again dividend, and accelerating my tangible book per share. It's an indirect effect on what gets in the pocket of my shareholder. When we have decided to take the moment and invest €6.5 billion today in the stake consolidation, we have done a few things that I think were not considered enough. Number one, our shareholders had a lot of uncertainty as to the timing of deploying our excess capital. Between now and the end of 2027, it could mean tomorrow, and it could mean December 31, 2027. Now, €6.5 billion are deployed, and that's it. There is only one distribution that ends up in the pocket of our shareholders. there is only one distribution that ends up in the pocket of our shareholders That is called dividend. that is called dividend It's a cash payment that hits your account. it's a cash payment that hits your account When I do share buybacks, by reducing the share count on the same earnings, we are obviously accelerating the EPS and accelerating the DPS, again dividend, and accelerating my tangible book per share. when i do share buybacks by reducing the share count on the same earnings we are obviously accelerating the eps and accelerating the dps again dividend and accelerating my tangible book per share It's an indirect effect on what gets in the pocket of my shareholder. it's an indirect effect on what gets in the pocket of my shareholder When we have decided to take the moment and invest €6.5 billion today in the stake consolidation, we have done a few things that I think were not considered enough. when we have decided to take the moment and invest €6.5 billion today in the stake consolidation we have done a few things that i think were not considered enough Number one, our shareholders had a lot of uncertainty as to the timing of deploying our excess capital. number one our shareholders had a lot of uncertainty as to the timing of deploying our excess capital Between now and the end of 2027, it could mean tomorrow, and it could mean December 31, 2027. between now and the end of 2027 it could mean tomorrow and it could mean december 31 2027 Now, €6.5 billion are deployed, and that's it. now €6.5 billion are deployed and that's it We are going to start pumping from 2026 onward. Second topic, when you do share buybacks, as you know very well, you cannot anticipate at which price you're doing the share buybacks. As of today, it's 11% return on investment. Over time, nobody has any idea. It depends on where the share price is when we will execute it. However, by deploying €6.5 billion of our excess capital at a 20% return on investment, we give exact clarity on what the impact will be, and there is no going around it. Incidentally, that 20% is almost double what we would have gotten by doing the same amount of share buyback on our own shares, and it's 2.5x higher than what anyone who wanted to replicate what we have just done would extract from consolidating the same amount of shares in Commerzbank and Alpha Bank. We are going to start pumping from 2026 onward. we are going to start pumping from 2026 onward Second topic, when you do share buybacks, as you know very well, you cannot anticipate at which price you're doing the share buybacks. second topic when you do share buybacks as you know very well you cannot anticipate at which price you're doing the share buybacks As of today, it's 11% return on investment. as of today it's 11% return on investment Over time, nobody has any idea. over time nobody has any idea It depends on where the share price is when we will execute it. it depends on where the share price is when we will execute it However, by deploying €6.5 billion of our excess capital at a 20% return on investment, we give exact clarity on what the impact will be, and there is no going around it. however by deploying €6.5 billion of our excess capital at a 20% return on investment we give exact clarity on what the impact will be and there is no going around it Incidentally, that 20% is almost double what we would have gotten by doing the same amount of share buyback on our own shares, and it's 2.5 x higher than what anyone who wanted to replicate what we have just done would extract from consolidating the same amount of shares in Commerzbank and Alpha Bank. incidentally that 20% is almost double what we would have gotten by doing the same amount of share buyback on our own shares and it's 2.5 x higher than what anyone who wanted to replicate what we have just done would extract from consolidating the same amount of shares in commerzbank and alpha bank We view the second leg called capital deployment as deployment, and I can deploy it in share buybacks, I can deploy it organically in the business, I can deploy it in M&A, or I can deploy it. Obviously, this is not recurrent, and we had an opportunity that we grabbed into strategic stakes that also give me strategic optionality that no other bank in Europe has. When I put it all together, what are the facts? The facts are that versus consensus of what we would have paid in dividend to our shareholders before we deployed in the 2025-2027 period, we are going to pay €1 billion more, and our dividend per share has increased its growth dramatically versus before. From a dividend standpoint, our shareholders are massively better. We view the second leg called capital deployment as deployment, and I can deploy it in share buybacks, I can deploy it organically in the business, I can deploy it in M&A, or I can deploy it. we view the second leg called capital deployment as deployment and i can deploy it in share buybacks i can deploy it organically in the business i can deploy it in m&a or i can deploy it Obviously, this is not recurrent, and we had an opportunity that we grabbed into strategic stakes that also give me strategic optionality that no other bank in Europe has. obviously this is not recurrent and we had an opportunity that we grabbed into strategic stakes that also give me strategic optionality that no other bank in europe has When I put it all together, what are the facts? when i put it all together what are the facts The facts are that versus consensus of what we would have paid in dividend to our shareholders before we deployed in the 2025-2027 period, we are going to pay €1 billion more, and our dividend per share has increased its growth dramatically versus before. the facts are that versus consensus of what we would have paid in dividend to our shareholders before we deployed in the 2025-2027 period we are going to pay €1 billion more and our dividend per share has increased its growth dramatically versus before From a dividend standpoint, our shareholders are massively better. from a dividend standpoint our shareholders are massively better If I look at share buybacks, you are correct, they are going to be lower than what they were before, or at least consensus is saying that. They're saying that because €11.5 billion that consensus is giving plus €6.5 billion is almost €19 billion, not €13 billion. In effect, what we're saying is that we've generated so much capital that we could distribute or employ €6.5 billion at great returns and still give you close to the same amount of share buybacks you were going to have before. If you add the dividend amount and the share buyback amount, the before and after is very similar. Now we have €1 billion more revenues and €1 billion more net profit because of our investment. To finalize my answer to your question, could there be extraordinary distribution? Absolutely. We had a 16%+ CET1 before. If I look at share buybacks, you are correct, they are going to be lower than what they were before, or at least consensus is saying that. if i look at share buybacks you are correct they are going to be lower than what they were before or at least consensus is saying that They're saying that because €11.5 billion that consensus is giving plus €6.5 billion is almost €19 billion, not €13 billion. they're saying that because €11.5 billion that consensus is giving plus €6.5 billion is almost €19 billion not €13 billion In effect, what we're saying is that we've generated so much capital that we could distribute or employ €6.5 billion at great returns and still give you close to the same amount of share buybacks you were going to have before. in effect what we're saying is that we've generated so much capital that we could distribute or employ €6.5 billion at great returns and still give you close to the same amount of share buybacks you were going to have before If you add the dividend amount and the share buyback amount, the before and after is very similar. if you add the dividend amount and the share buyback amount the before and after is very similar Now we have €1 billion more revenues and €1 billion more net profit because of our investment. now we have €1 billion more revenues and €1 billion more net profit because of our investment To finalize my answer to your question, could there be extraordinary distribution? to finalize my answer to your question could there be extraordinary distribution Absolutely. absolutely We had a 16%+ CET1 before. we had a 16%+ cet1 before We were on another galaxy to all the other banks. Incidentally, many believed that all that excess capital could not be returned this fast, hence the consensus. Now we are, let's take it to the end of a year, somewhere between the 14.5% area or slightly lower depending on the number of actions. We are still very high, but at the level of best-in-class competitors. We're no longer an outlier. We are at these levels. Our target CET1 is not 14%+. It is 12.5%-13%. Depending on how the business performs, how we see the deployment of further opportunity into our organic growth, which in turn will drive dividend and earnings. In terms of all of that, we will continue to trend down to 12.5%-13%, and you can do your calculation on what excess capital is that. We were on another galaxy to all the other banks. we were on another galaxy to all the other banks Incidentally, many believed that all that excess capital could not be returned this fast, hence the consensus. incidentally many believed that all that excess capital could not be returned this fast hence the consensus Now we are, let's take it to the end of a year, somewhere between the 14.5% area or slightly lower depending on the number of actions. now we are let's take it to the end of a year somewhere between the 14.5% area or slightly lower depending on the number of actions We are still very high, but at the level of best-in-class competitors. we are still very high but at the level of best-in-class competitors We're no longer an outlier. we're no longer an outlier We are at these levels. we are at these levels Our target CET1 is not 14%+. our target cet1 is not 14%+ It is 12.5% -1 3%. it is 12.5% -1 3% Depending on how the business performs, how we see the deployment of further opportunity into our organic growth, which in turn will drive dividend and earnings. depending on how the business performs how we see the deployment of further opportunity into our organic growth which in turn will drive dividend and earnings In terms of all of that, we will continue to trend down to 12.5%-13%, and you can do your calculation on what excess capital is that. in terms of all of that we will continue to trend down to 12.5%-13% and you can do your calculation on what excess capital is that

Speaker 5: If we don't find ways to deploy profitably in our organic growth, it will come back to you. We will tell you how much it is at the end of every year when we take a line on how well we have done and what our future prospects are. Last thing I would say is that if you look at the practice we had when we launched UniCredit Unlocked, it's identical. We said these are the dividends, they're sacrosanct. We will tell you how much of the excess capital we give you back at the end of every year. We changed. Sometimes you need to go back to where you were because it was better, and I think it is better. If we don't find ways to deploy profitably in our organic growth, it will come back to you. if we don't find ways to deploy profitably in our organic growth it will come back to you We will tell you how much it is at the end of every year when we take a line on how well we have done and what our future prospects are. we will tell you how much it is at the end of every year when we take a line on how well we have done and what our future prospects are Last thing I would say is that if you look at the practice we had when we launched UniCredit Unlocked, it's identical. last thing i would say is that if you look at the practice we had when we launched unicredit unlocked it's identical We said these are the dividends, they're sacrosanct. we said these are the dividends they're sacrosanct We will tell you how much of the excess capital we give you back at the end of every year. we will tell you how much of the excess capital we give you back at the end of every year We changed. we changed Sometimes you need to go back to where you were because it was better, and I think it is better. sometimes you need to go back to where you were because it was better and i think it is better

Speaker 1: Thank you. Thank you. thank you

Speaker 3: The next question is from Antonio Reale, Bank of America. Please go ahead. The next question is from Antonio Reale, Bank of America. the next question is from antonio reale bank of america Please go ahead. please go ahead

Speaker 7: Hi, good morning. It's Antonio from Bank of America. Two questions for me, please. The first one is on NII in Italy. We've seen a leg down this quarter given the outlook on rates. My question is, do you think we've seen the trough in your Italian NII this quarter? I've seen a good uptick in deposits, and you've talked about growth. Do you think that NII in Italy can be the sort of swing factor for the group given the performance we're seeing elsewhere? That's my first question. My second question is a follow-up on your profit ambition for 2027. You're targeting well above 11. If I look at your slide two, you're looking to add €1 billion by 2027 from strategic investments, which at least on my number seems somewhat conservative. Hi, good morning. hi good morning It's Antonio from Bank of America. it's antonio from bank of america Two questions for me, please. two questions for me please The first one is on NII in Italy. the first one is on nii in italy We've seen a leg down this quarter given the outlook on rates. we've seen a leg down this quarter given the outlook on rates My question is, do you think we've seen the trough in your Italian NII this quarter? my question is do you think we've seen the trough in your italian nii this quarter I've seen a good uptick in deposits, and you've talked about growth. i've seen a good uptick in deposits and you've talked about growth Do you think that NII in Italy can be the sort of swing factor for the group given the performance we're seeing elsewhere? do you think that nii in italy can be the sort of swing factor for the group given the performance we're seeing elsewhere That's my first question. that's my first question My second question is a follow-up on your profit ambition for 2027. my second question is a follow-up on your profit ambition for 2027 You're targeting well above 11. you're targeting well above 11 If I look at your slide two, you're looking to add €1 billion by 2027 from strategic investments, which at least on my number seems somewhat conservative. if i look at your slide two you're looking to add €1 billion by 2027 from strategic investments which at least on my number seems somewhat conservative If I add that up to your underlying profits this year plus some of the growth you've talked about, you're really going to be closer to €12 billion more than 11. What am I missing? Is it you're building buffers on buffers? The third and last clarification, if I may, I think you've talked about a new multi-year plan. Did I understand correctly that you're looking to present a new strategy update sometime next year? If so, could we have any visibility as to when you would expect that to be? Thank you. If I add that up to your underlying profits this year plus some of the growth you've talked about, you're really going to be closer to €12 billion more than 11. if i add that up to your underlying profits this year plus some of the growth you've talked about you're really going to be closer to €12 billion more than 11 What am I missing? what am i missing Is it you're building buffers on buffers? is it you're building buffers on buffers The third and last clarification, if I may, I think you've talked about a new multi-year plan. the third and last clarification if i may i think you've talked about a new multi-year plan Did I understand correctly that you're looking to present a new strategy update sometime next year? did i understand correctly that you're looking to present a new strategy update sometime next year If so, could we have any visibility as to when you would expect that to be? if so could we have any visibility as to when you would expect that to be Thank you. thank you

Speaker 10: Okay, so let me start with NII. Let me be broader. I don't think NII in Italy has troughed yet. I think it has a little bit more to go. I would say that if I take a group-wide view in our Executive Committee, the word troughing on NII is more and more used. I think that like with the plan, the right time to discuss about trough or no trough and what are the expectations is probably with the year-end result. As we will be sitting on the year-end result, see what would have happened around January and the prospects, we will be able to guide you without speculating. I would say that we are troughing in the group. We just need confirmation that this is sustainable. Okay, so let me start with NII. okay so let me start with nii Let me be broader. let me be broader I don't think NII in Italy has troughed yet. i don't think nii in italy has troughed yet I think it has a little bit more to go. i think it has a little bit more to go I would say that if I take a group-wide view in our Executive Committee, the word troughing on NII is more and more used. i would say that if i take a group-wide view in our executive committee the word troughing on nii is more and more used I think that like with the plan, the right time to discuss about trough or no trough and what are the expectations is probably with the year-end result. i think that like with the plan the right time to discuss about trough or no trough and what are the expectations is probably with the year-end result As we will be sitting on the year-end result, see what would have happened around January and the prospects, we will be able to guide you without speculating. as we will be sitting on the year-end result see what would have happened around january and the prospects we will be able to guide you without speculating I would say that we are troughing in the group. i would say that we are troughing in the group We just need confirmation that this is sustainable. we just need confirmation that this is sustainable With respect to net profit ambition, I think I would like Antonio not to make the same mistake as we probably I made on distributions before. We will return €30 billion or more than €30 billion. We spent €6.5 billion and it becomes €36.5 billion. Now, it just became €33.5 billion, but not €36.5 billion and everybody's disappointed. I would say the following. Because of the further acceleration that we see in our underlying business, which is really the exciting story in our results of this year, unfortunately, because of all the noise, the consolidation of stake, the this and the that, it is kind of hidden. With respect to net profit ambition, I think I would like Antonio not to make the same mistake as we probably I made on distributions before. with respect to net profit ambition i think i would like antonio not to make the same mistake as we probably i made on distributions before We will return €30 billion or more than €30 billion. we will return €30 billion or more than €30 billion We spent €6.5 billion and it becomes €36.5 billion. we spent €6.5 billion and it becomes €36.5 billion Now, it just became €33.5 billion, but not €36.5 billion and everybody's disappointed. now it just became €33.5 billion but not €36.5 billion and everybody's disappointed I would say the following. i would say the following Because of the further acceleration that we see in our underlying business, which is really the exciting story in our results of this year, unfortunately, because of all the noise, the consolidation of stake, the this and the that, it is kind of hidden. because of the further acceleration that we see in our underlying business which is really the exciting story in our results of this year unfortunately because of all the noise the consolidation of stake the this and the that it is kind of hidden Because of the acceleration of our commercial results that we see this year and that we confirm three quarters in a row, and I hope, and it's critical, we will be confirming in the fourth quarter, we're more optimistic than what we were when we designed our phase two of UniCredit Unlocked 2025-2027. As every year, we update that by losing the looking back and adding a year. I think at the moment, if the trends are confirmed, we will be looking to upgrade our expectation for profitability. At the moment, you only have 2027. You will look at 2027. We will add 2028 and we will clarify 2026. For that reason, we're making the investment. In terms of your reconstruction, I would say this. Because of the acceleration of our commercial results that we see this year and that we confirm three quarters in a row, and I hope, and it's critical, we will be confirming in the fourth quarter, we're more optimistic than what we were when we designed our phase two of UniCredit Unlocked 2025-2027. because of the acceleration of our commercial results that we see this year and that we confirm three quarters in a row and i hope and it's critical we will be confirming in the fourth quarter we're more optimistic than what we were when we designed our phase two of unicredit unlocked 2025-2027 As every year, we update that by losing the looking back and adding a year. as every year we update that by losing the looking back and adding a year I think at the moment, if the trends are confirmed, we will be looking to upgrade our expectation for profitability. i think at the moment if the trends are confirmed we will be looking to upgrade our expectation for profitability At the moment, you only have 2027. at the moment you only have 2027 You will look at 2027. you will look at 2027 We will add 2028 and we will clarify 2026. we will add 2028 and we will clarify 2026 For that reason, we're making the investment. for that reason we're making the investment In terms of your reconstruction, I would say this. in terms of your reconstruction i would say this We were going to make circa, and you know that circa can be up or can be down, €10 billion in 2027 before we made these investments or before we consolidated this investment. If you mechanically take €10 billion and you add €1 billion net from this investment, and you're right, the €1 billion is dependent on two factors: the consensus on Commerzbank and Alpha Bank being right, and that I'm not going to get into; and secondly, our hedging cost, which I'm deducting from the total numbers being the ones that you're estimating to be, but we're going to give you an update with the year-end numbers. If you mechanically add circa €10 billion to circa €11 billion, you don't get to well above €11 billion. You get to circa €11 billion. Okay? Why are we telling you well above €11 billion? We were going to make circa, and you know that circa can be up or can be down, €10 billion in 2027 before we made these investments or before we consolidated this investment. we were going to make circa and you know that circa can be up or can be down €10 billion in 2027 before we made these investments or before we consolidated this investment If you mechanically take € 10 billion and you add €1 billion net from this investment, and you're right, the €1 billion is dependent on two factors: the consensus on Commerzbank and Alpha Bank being right, and that I'm not going to get into; and secondly, our hedging cost, which I'm deducting from the total numbers being the ones that you're estimating to be, but we're going to give you an update with the year-end numbers. if you mechanically take € 10 billion and you add €1 billion net from this investment and you're right the €1 billion is dependent on two factors the consensus on commerzbank and alpha bank being right and that i'm not going to get into and secondly our hedging cost which i'm deducting from the total numbers being the ones that you're estimating to be but we're going to give you an update with the year-end numbers If you mechanically add circa €10 billion to circa €11 billion, you don't get to well above €11 billion. if you mechanically add circa €10 billion to circa €11 billion you don't get to well above €11 billion You get to circa €11 billion. you get to circa €11 billion Okay? okay Why are we telling you well above €11 billion? why are we telling you well above €11 billion Because the underlying franchise is doing better than we anticipated at the beginning of the year. How much well above €11 billion, I'm not going to comment because we're finalizing our plan. We're getting the feedback from everybody. We want to be realistic on what we say, and most importantly, our board needs to approve it. Let's put it this way, I'm optimistic about 2027, which is the only number out there. For us internally, we are also positive on what we can do on 2026 because of all these factors, because it's not only one year that gets pulled up. 2026 and 2028 will be affected as well. With one caveat or one caution. The caution is that the new investment that we're doing on accelerating is going to impact 2026, but not fully. They need to be rolled in. Because the underlying franchise is doing better than we anticipated at the beginning of the year. because the underlying franchise is doing better than we anticipated at the beginning of the year How much well above €11 billion, I'm not going to comment because we're finalizing our plan. how much well above €11 billion i'm not going to comment because we're finalizing our plan We're getting the feedback from everybody. we're getting the feedback from everybody We want to be realistic on what we say, and most importantly, our board needs to approve it. we want to be realistic on what we say and most importantly our board needs to approve it Let's put it this way, I'm optimistic about 2027, which is the only number out there. let's put it this way i'm optimistic about 2027 which is the only number out there For us internally, we are also positive on what we can do on 2026 because of all these factors, because it's not only one year that gets pulled up. 2026 and 2028 will be affected as well. for us internally we are also positive on what we can do on 2026 because of all these factors because it's not only one year that gets pulled up 2026 and 2028 will be affected as well With one caveat or one caution. with one caveat or one caution The caution is that the new investment that we're doing on accelerating is going to impact 2026, but not fully. the caution is that the new investment that we're doing on accelerating is going to impact 2026 but not fully They need to be rolled in. they need to be rolled in The years where our investment, new investment, is going to impact the most, and I'm answering your question again, is in 2027 and 2028. In 2026, although we have started this investment, they will impact for only a fragment of a year. 2026 is going to remain just what, which is not little, what our acceleration can deliver without a lot of impact from those investments because they will arrive a little bit later in the time and affect more of the second half of a year than the first half of a year. I hope that that's clear. With respect to Strategy The years where our investment, new investment, is going to impact the most, and I'm answering your question again, is in 2027 and 2028. the years where our investment new investment is going to impact the most and i'm answering your question again is in 2027 and 2028 In 2026, although we have started this investment, they will impact for only a fragment of a year. 2026 is going to remain just what, which is not little, what our acceleration can deliver without a lot of impact from those investments because they will arrive a little bit later in the time and affect more of the second half of a year than the first half of a year. in 2026 although we have started this investment they will impact for only a fragment of a year 2026 is going to remain just what which is not little what our acceleration can deliver without a lot of impact from those investments because they will arrive a little bit later in the time and affect more of the second half of a year than the first half of a year I hope that that's clear. i hope that that's clear With respect to Strategy with respect to strategy Unless somebody demonstrates otherwise, I personally do not like investor days. I like updating everybody, all of our stakeholders, every quarter. I don't think many banks maybe bore you or interest you with an update on their strategy and where they are going as an integral part of their result presentation four quarters a year. Once a year, once we roll our plan, we review our guidance with a lot more granular detail. I think that is more continuous and better. Should you expect that with the full year 2025 results, we will give you significant detail on the next three-year plans as we roll? You should. Is that an investor day? No, it's not. The date is very clear, it is when Magda will tell you we will have the year-end results, sometimes in February. Unless somebody demonstrates otherwise, I personally do not like investor days. unless somebody demonstrates otherwise i personally do not like investor days I like updating everybody, all of our stakeholders, every quarter. i like updating everybody all of our stakeholders every quarter I don't think many banks maybe bore you or interest you with an update on their strategy and where they are going as an integral part of their result presentation four quarters a year. i don't think many banks maybe bore you or interest you with an update on their strategy and where they are going as an integral part of their result presentation four quarters a year Once a year, once we roll our plan, we review our guidance with a lot more granular detail. once a year once we roll our plan we review our guidance with a lot more granular detail I think that is more continuous and better. i think that is more continuous and better Should you expect that with the full year 2025 results, we will give you significant detail on the next three-year plans as we roll? should you expect that with the full year 2025 results we will give you significant detail on the next three-year plans as we roll You should. you should Is that an investor day? is that an investor day No, it's not. no it's not The date is very clear, it is when Magda will tell you we will have the year-end results, sometimes in February. the date is very clear it is when magda will tell you we will have the year-end results sometimes in february

Speaker 7: Very clear, thank you. Very clear, thank you. very clear thank you

Speaker 3: The next question is from Delphine Lee, J.P. Morgan. Please go ahead. Ms. Lee, we cannot hear you. Maybe the line is on mute. The next question is from Delphine Lee, J.P. the next question is from delphine lee j.p Morgan. morgan Please go ahead. please go ahead Ms. Lee, we cannot hear you. ms lee we cannot hear you Maybe the line is on mute. maybe the line is on mute

Speaker 4: Yes, apologies. Hi, thank you for taking my questions. My first one is on Commerzbank. Just to understand a little bit where we are now on the derivatives that are still in place, on the hedging costs, just to understand a little bit, you know, how to read a little bit, you know, the effect it's taken this year, but also kind of what we should expect in the coming years. My second question is on the Italian bank tax. I mean, I saw you said it was a bit early, but I don't know if you could just share any color about just, you know, what do you think is a likely scenario? Thank you. Yes, apologies. yes apologies Hi, thank you for taking my questions. hi thank you for taking my questions My first one is on Commerzbank. my first one is on commerzbank Just to understand a little bit where we are now on the derivatives that are still in place, on the hedging costs, just to understand a little bit, you know, how to read a little bit, you know, the effect it's taken this year, but also kind of what we should expect in the coming years. just to understand a little bit where we are now on the derivatives that are still in place on the hedging costs just to understand a little bit you know how to read a little bit you know the effect it's taken this year but also kind of what we should expect in the coming years My second question is on the Italian bank tax. my second question is on the italian bank tax I mean, I saw you said it was a bit early, but I don't know if you could just share any color about just, you know, what do you think is a likely scenario? i mean i saw you said it was a bit early but i don't know if you could just share any color about just you know what do you think is a likely scenario Thank you. thank you

Speaker 10: Okay, so Commerzbank, where we are now on the hedging cost. I would say that it's fair to say that we're now completely aligned on the upside with Commerzbank as we have at, I would say, significant costs this year. That's why you see the impact I was talking about. We have practically eliminated all call options that we had sold on the stock when we colored it or on part of the stock when we colored it. If you look at it from a long standpoint on the upside, we're one to one. However, as for everything else we do, and it's not personal or anything, we remain always cautious as we have overlays on our asset quality while we are very strong on it and we are very optimistic on it. We have something called put option on the stake just in case. Okay, so Commerzbank, where we are now on the hedging cost. okay so commerzbank where we are now on the hedging cost I would say that it's fair to say that we're now completely aligned on the upside with Commerzbank as we have at, I would say, significant costs this year. i would say that it's fair to say that we're now completely aligned on the upside with commerzbank as we have at i would say significant costs this year That's why you see the impact I was talking about. that's why you see the impact i was talking about We have practically eliminated all call options that we had sold on the stock when we colored it or on part of the stock when we colored it. we have practically eliminated all call options that we had sold on the stock when we colored it or on part of the stock when we colored it If you look at it from a long standpoint on the upside, we're one to one. if you look at it from a long standpoint on the upside we're one to one However, as for everything else we do, and it's not personal or anything, we remain always cautious as we have overlays on our asset quality while we are very strong on it and we are very optimistic on it. however as for everything else we do and it's not personal or anything we remain always cautious as we have overlays on our asset quality while we are very strong on it and we are very optimistic on it We have something called put option on the stake just in case. we have something called put option on the stake just in case If the performance is positive and ahead of expectation, we are one-on-one aligned. If the performance is not just negative, but significantly negative, we make money. Okay, that's where we are. Now, those hedges cost money and they are netted from the profitability of a stake. They cost money in two ways. One, the cost of the stakes, which is several hundred million. We will update on exactly where we are because we continue to do action to reduce it with the end-of-year results. The second thing is funding because we're funding the participation, obviously. The two of them are significant, but as we have taken cost upfront already, we continue to look at ways to reduce that combined cost to give you more and more a clean impact on the net income we bring in from the stakes because we think it's cleaner and clearer for all of you. If the performance is positive and ahead of expectation, we are one-on-one aligned. if the performance is positive and ahead of expectation we are one-on-one aligned If the performance is not just negative, but significantly negative, we make money. if the performance is not just negative but significantly negative we make money Okay, that's where we are. okay that's where we are Now, those hedges cost money and they are netted from the profitability of a stake. now those hedges cost money and they are netted from the profitability of a stake They cost money in two ways. they cost money in two ways One, the cost of the stakes, which is several hundred million. one the cost of the stakes which is several hundred million We will update on exactly where we are because we continue to do action to reduce it with the end-of-year results. we will update on exactly where we are because we continue to do action to reduce it with the end-of-year results The second thing is funding because we're funding the participation, obviously. the second thing is funding because we're funding the participation obviously The two of them are significant, but as we have taken cost upfront already, we continue to look at ways to reduce that combined cost to give you more and more a clean impact on the net income we bring in from the stakes because we think it's cleaner and clearer for all of you. the two of them are significant but as we have taken cost upfront already we continue to look at ways to reduce that combined cost to give you more and more a clean impact on the net income we bring in from the stakes because we think it's cleaner and clearer for all of you We will do that, but as we are conservative, we will maintain our put option to protect on the downside. For one, rating agencies approve of that. Italian bank tax, and what do you think is a likely scenario? I think I never know what the likely scenario is with anything that is politically related, and I don't try to speculate. I don't know. I would just say that it is premature to assess the full impact. I would say that depending on the rumor, the full impact is more or less high. I would say that for UniCredit specifically, the combination of the fact that we are, in inverted commas, only 40% in Italy and 40% profitability in Italy, and so on and so forth, the impact is obviously diluted on the 100%. We will do that, but as we are conservative, we will maintain our put option to protect on the downside. we will do that but as we are conservative we will maintain our put option to protect on the downside For one, rating agencies approve of that. for one rating agencies approve of that Italian bank tax, and what do you think is a likely scenario? italian bank tax and what do you think is a likely scenario I think I never know what the likely scenario is with anything that is politically related, and I don't try to speculate. i think i never know what the likely scenario is with anything that is politically related and i don't try to speculate I don't know. i don't know I would just say that it is premature to assess the full impact. i would just say that it is premature to assess the full impact I would say that depending on the rumor, the full impact is more or less high. i would say that depending on the rumor the full impact is more or less high I would say that for UniCredit specifically, the combination of the fact that we are, in inverted commas, only 40% in Italy and 40% profitability in Italy, and so on and so forth, the impact is obviously diluted on the 100%. i would say that for unicredit specifically the combination of the fact that we are in inverted commas only 40% in italy and 40% profitability in italy and so on and so forth the impact is obviously diluted on the 100% Secondly, by having all of the cautionary, call them buffers, that we have across, we are going to try to neutralize as much of the impact, whatever the impact is, as we can. At the moment, we expect an impact, obviously, but it's premature to tell you how much. We will see in the next few days or weeks where we're going to land. Secondly, by having all of the cautionary, call them buffers, that we have across, we are going to try to neutralize as much of the impact, whatever the impact is, as we can. secondly by having all of the cautionary call them buffers that we have across we are going to try to neutralize as much of the impact whatever the impact is as we can At the moment, we expect an impact, obviously, but it's premature to tell you how much. at the moment we expect an impact obviously but it's premature to tell you how much We will see in the next few days or weeks where we're going to land. we will see in the next few days or weeks where we're going to land

Speaker 4: Great, thank you very much. Great, thank you very much. great thank you very much

Speaker 3: The next question is from Giovanni Razzoli, Deutsche Bank. Please go ahead. The next question is from Giovanni Razzoli, Deutsche Bank. the next question is from giovanni razzoli deutsche bank Please go ahead. please go ahead

Speaker 2: Good morning. Two questions at my end. One is on Russia. You confirmed that you are going to exit the country by 1st of 2026. Shall we assume that the contribution to the bottom line will also basically go to zero, or do you have ways to move some of the revenue or businesses elsewhere to keep the contribution of that contribution to some extent at some point? The second question is on your stake in Assicurazioni Generali. In the last conference call, you anticipated that you would have reduced your stake below 2%. Based on the last report on consult, you are still above 5%. I was wondering how shall we treat it in terms of contribution to your P&L or whether you have changed your views on these stakes. Thank you. Good morning. good morning Two questions at my end. two questions at my end One is on Russia. one is on russia You confirmed that you are going to exit the country by 1st of 2026. you confirmed that you are going to exit the country by 1st of 2026 Shall we assume that the contribution to the bottom line will also basically go to zero, or do you have ways to move some of the revenue or businesses elsewhere to keep the contribution of that contribution to some extent at some point? shall we assume that the contribution to the bottom line will also basically go to zero or do you have ways to move some of the revenue or businesses elsewhere to keep the contribution of that contribution to some extent at some point The second question is on your stake in Assicurazioni Generali. the second question is on your stake in assicurazioni generali In the last conference call, you anticipated that you would have reduced your stake below 2%. in the last conference call you anticipated that you would have reduced your stake below 2% Based on the last report on consult, you are still above 5%. based on the last report on consult you are still above 5% I was wondering how shall we treat it in terms of contribution to your P&L or whether you have changed your views on these stakes. i was wondering how shall we treat it in terms of contribution to your p&l or whether you have changed your views on these stakes Thank you. thank you

Speaker 10: On Russia, we never said we would exit by the first half of 2026. Let me be clear. What we expect to close, if you want to call it exit, and maybe that's where the misunderstanding lies, is that we will close our retail operation, which has already declined very significantly by the first half of 2026. We stand by that at the moment. The state of the franchise going forward is, as I said, we have about €700 million in local lending. For €700 million, we haven't granted any new loan since the war started. The rate of decline of those loans is dependent on which loan they are. If I have a mortgage, it's a long tail. That's why banks are different than other industries. If you are multi-year, they are multi-year. We believe that we will gradually trendline to about €500 million over time. On Russia, we never said we would exit by the first half of 2026. on russia we never said we would exit by the first half of 2026 Let me be clear. let me be clear What we expect to close, if you want to call it exit, and maybe that's where the misunderstanding lies, is that we will close our retail operation, which has already declined very significantly by the first half of 2026. what we expect to close if you want to call it exit and maybe that's where the misunderstanding lies is that we will close our retail operation which has already declined very significantly by the first half of 2026 We stand by that at the moment. we stand by that at the moment The state of the franchise going forward is, as I said, we have about €700 million in local lending. the state of the franchise going forward is as i said we have about €700 million in local lending For €700 million, we haven't granted any new loan since the war started. for €700 million we haven't granted any new loan since the war started The rate of decline of those loans is dependent on which loan they are. the rate of decline of those loans is dependent on which loan they are If I have a mortgage, it's a long tail. if i have a mortgage it's a long tail That's why banks are different than other industries. that's why banks are different than other industries If you are multi-year, they are multi-year. if you are multi-year they are multi-year We believe that we will gradually trendline to about €500 million over time. we believe that we will gradually trendline to about €500 million over time There is very little we can do to go above and beyond that because if we have a loan outstanding and we're not giving you one, you trendline as the loans decay, and that is what varies. As we said, on deposit, the local deposits are just below €1 billion. We are a very cash-rich bank. We are viewed to be a safe haven to a certain extent, one, because we are international, and two, because of our strong capitalization. Obviously, by not having done any new loan, we are not exposed to any worsening of a credit cycle or anything else. We're just, I don't know, call it a safe deposit box, maybe it's not the right word. Those are there. Under Russian law, we cannot turn away deposits. They are what they are. There is very little we can do to go above and beyond that because if we have a loan outstanding and we're not giving you one, you trendline as the loans decay, and that is what varies. there is very little we can do to go above and beyond that because if we have a loan outstanding and we're not giving you one you trendline as the loans decay and that is what varies As we said, on deposit, the local deposits are just below €1 billion. as we said on deposit the local deposits are just below €1 billion We are a very cash-rich bank. we are a very cash-rich bank We are viewed to be a safe haven to a certain extent, one, because we are international, and two, because of our strong capitalization. we are viewed to be a safe haven to a certain extent one because we are international and two because of our strong capitalization Obviously, by not having done any new loan, we are not exposed to any worsening of a credit cycle or anything else. obviously by not having done any new loan we are not exposed to any worsening of a credit cycle or anything else We're just, I don't know, call it a safe deposit box, maybe it's not the right word. we're just i don't know call it a safe deposit box maybe it's not the right word Those are there. those are there Under Russian law, we cannot turn away deposits. under russian law we cannot turn away deposits They are what they are. they are what they are We don't see any particular trend up or down at the moment, but they are what they are, and they are probably going to stay around that level. On payments, we used to be multi-currency, if I remember correctly, on 16 different currencies. We're now focused on two. Some we have discontinued, some we have effectively rendered marginal or close to zero. Those two are U.S. dollar and euro, as you have seen heard very broadly in Italy, and as said, we are providing a service to international Western companies that are still in the country and to the Western world that requires to execute payments directly and not through other economic blocks for energy and commodities that continue to be purchased by all of our countries from Russia. Therefore, that's what they are there for, and they stay there. We don't see any particular trend up or down at the moment, but they are what they are, and they are probably going to stay around that level. we don't see any particular trend up or down at the moment but they are what they are and they are probably going to stay around that level On payments, we used to be multi-currency, if I remember correctly, on 16 different currencies. on payments we used to be multi-currency if i remember correctly on 16 different currencies We're now focused on two. we're now focused on two Some we have discontinued, some we have effectively rendered marginal or close to zero. some we have discontinued some we have effectively rendered marginal or close to zero Those two are U.S. dollar and euro, as you have seen heard very broadly in Italy, and as said, we are providing a service to international Western companies that are still in the country and to the Western world that requires to execute payments directly and not through other economic blocks for energy and commodities that continue to be purchased by all of our countries from Russia. those two are u.s dollar and euro as you have seen heard very broadly in italy and as said we are providing a service to international western companies that are still in the country and to the western world that requires to execute payments directly and not through other economic blocks for energy and commodities that continue to be purchased by all of our countries from russia Therefore, that's what they are there for, and they stay there. therefore that's what they are there for and they stay there They are less than 2% of the total payment that we do, about €6-7 billion. We don't see very material change from that, but they could evaluate. You asked your question about the contribution. I think because of how Russian and Russia rates are and because we are super covered in Russia, every time a loan is repaid, we get significant write-backs. As an example, this quarter, one large multinational or one large company in Russia repaid a cross-border loan, the last cross-border loan of substance that we had. As they repaid, they were covered at 40%. We released a significant amount of provision. From the beginning of the war, we've had that trend again and again. I can't stop that. If they repay and they're painful, I'm booking the release of provisions. I do think that the Russia trend line will continue as is. They are less than 2% of the total payment that we do, about €6-7 billion. they are less than 2% of the total payment that we do about €6-7 billion We don't see very material change from that, but they could evaluate. we don't see very material change from that but they could evaluate You asked your question about the contribution. you asked your question about the contribution I think because of how Russian and Russia rates are and because we are super covered in Russia, every time a loan is repaid, we get significant write-backs. i think because of how russian and russia rates are and because we are super covered in russia every time a loan is repaid we get significant write-backs As an example, this quarter, one large multinational or one large company in Russia repaid a cross-border loan, the last cross-border loan of substance that we had. as an example this quarter one large multinational or one large company in russia repaid a cross-border loan the last cross-border loan of substance that we had As they repaid, they were covered at 40%. as they repaid they were covered at 40% We released a significant amount of provision. we released a significant amount of provision From the beginning of the war, we've had that trend again and again. from the beginning of the war we've had that trend again and again I can't stop that. i can't stop that If they repay and they're painful, I'm booking the release of provisions. if they repay and they're painful i'm booking the release of provisions I do think that the Russia trend line will continue as is. i do think that the russia trend line will continue as is The Russia contribution to our profitability will significantly decline in 2026. In 2027, as we said, the contribution was going to trend down to, let's call it, marginal. When you look at our numbers, and I have made this point before, but maybe it's missed, try to look at our numbers and after 2027, eliminate the fact that we're absorbing a €600 to €700 million compression of bottom line and much greater on NII from the compression of Russia because at that point, my delta, I will have troughed and my delta goes up. What we're telling you is that the performance, the commercial performance of the rest of our franchise is running a lot faster than you think it's running because it's also absorbing that. Staking Generali reducing, etc. The Russia contribution to our profitability will significantly decline in 2026. the russia contribution to our profitability will significantly decline in 2026 In 2027, as we said, the contribution was going to trend down to, let's call it, marginal. in 2027 as we said the contribution was going to trend down to let's call it marginal When you look at our numbers, and I have made this point before, but maybe it's missed, try to look at our numbers and after 2027, eliminate the fact that we're absorbing a €600 to €700 million compression of bottom line and much greater on NII from the compression of Russia because at that point, my delta, I will have troughed and my delta goes up. when you look at our numbers and i have made this point before but maybe it's missed try to look at our numbers and after 2027 eliminate the fact that we're absorbing a €600 to €700 million compression of bottom line and much greater on nii from the compression of russia because at that point my delta i will have troughed and my delta goes up What we're telling you is that the performance, the commercial performance of the rest of our franchise is running a lot faster than you think it's running because it's also absorbing that. what we're telling you is that the performance the commercial performance of the rest of our franchise is running a lot faster than you think it's running because it's also absorbing that Staking Generali reducing, etc. staking generali reducing etc Our net exposure to Generali has been reduced, or our net stake in Generali has been reduced significantly, dramatically, I would say below 5%. I wouldn't say it is below 5%. Furthermore, what remains is hedged on the downside. Why has it been done in a way we have done it? We didn't want to weigh on the company, and that's what we have done. Is it strategic? No, it's not. Have we changed stance? For the time being, we have not changed stance. We are where we are. We have reduced the exposure. It is not something that is considered tactically important at the moment. We have reduced our net exposure, and potentially we will reduce more. At the moment, you should think that between the net number and the hedge that we are, it's well below 2%. The net exposure, I want to be very clear. Our net exposure to Generali has been reduced, or our net stake in Generali has been reduced significantly, dramatically, I would say below 5%. our net exposure to generali has been reduced or our net stake in generali has been reduced significantly dramatically i would say below 5% I wouldn't say it is below 5%. i wouldn't say it is below 5% Furthermore, what remains is hedged on the downside. furthermore what remains is hedged on the downside Why has it been done in a way we have done it? why has it been done in a way we have done it We didn't want to weigh on the company, and that's what we have done. we didn't want to weigh on the company and that's what we have done Is it strategic? is it strategic No, it's not. no it's not Have we changed stance? have we changed stance For the time being, we have not changed stance. for the time being we have not changed stance We are where we are. we are where we are We have reduced the exposure. we have reduced the exposure It is not something that is considered tactically important at the moment. it is not something that is considered tactically important at the moment We have reduced our net exposure, and potentially we will reduce more. we have reduced our net exposure and potentially we will reduce more At the moment, you should think that between the net number and the hedge that we are, it's well below 2%. at the moment you should think that between the net number and the hedge that we are it's well below 2% The net exposure, I want to be very clear. the net exposure i want to be very clear

Speaker 2: Thank you. Thank you. thank you

Speaker 3: The next question is from Britta Schmidt, Autonomous Research. Please go ahead. The next question is from Britta Schmidt, Autonomous Research. the next question is from britta schmidt autonomous research Please go ahead. please go ahead

Speaker 8: Good morning. Thank you for taking my questions. A follow-up on Commerzbank. The performance of the CET1 guidance of 14.6% does not mention the increase in the stake to 29%, but the net profit indications for 2027 still do. Is this just a matter of timing, and what will be the impact of an additional 3%? With regards to NII, you said it'll pick up once rates are fully priced, and you sound more optimistic on longer than Italy. Can you confirm the 2027 NII indication that you previously provided to be slightly above 2024? Thank you. Good morning. good morning Thank you for taking my questions. thank you for taking my questions A follow-up on Commerzbank. a follow-up on commerzbank The performance of the CET1 guidance of 14.6% does not mention the increase in the stake to 29%, but the net profit indications for 2027 still do. the performance of the cet1 guidance of 14.6% does not mention the increase in the stake to 29% but the net profit indications for 2027 still do Is this just a matter of timing, and what will be the impact of an additional 3%? is this just a matter of timing and what will be the impact of an additional 3% With regards to NII, you said it'll pick up once rates are fully priced, and you sound more optimistic on longer than Italy. with regards to nii you said it'll pick up once rates are fully priced and you sound more optimistic on longer than italy Can you confirm the 2027 NII indication that you previously provided to be slightly above 2024? can you confirm the 2027 nii indication that you previously provided to be slightly above 2024 Thank you. thank you

Speaker 10: Yes, we are talking about 2027, and it is expected that by that time, in my opinion, much earlier than that, the remaining physical portion of the stake between 2026 and circa 2029 will be, let's say, consolidated. At the moment, we don't need it. It has an impact on capital. We don't need the contribution, and for the time being, it is better to do that because it squares with a long position with some of a short position, and it reduces the volatility of our P&L, which at the end of the day is what all of you want. I would say if you fast forward to 2027, but probably much earlier, we will be at circa 2029, plus minus. Yes, we are talking about 2027, and it is expected that by that time, in my opinion, much earlier than that, the remaining physical portion of the stake between 2026 and circa 2029 will be, let's say, consolidated. yes we are talking about 2027 and it is expected that by that time in my opinion much earlier than that the remaining physical portion of the stake between 2026 and circa 2029 will be let's say consolidated At the moment, we don't need it. at the moment we don't need it It has an impact on capital. it has an impact on capital We don't need the contribution, and for the time being, it is better to do that because it squares with a long position with some of a short position, and it reduces the volatility of our P&L, which at the end of the day is what all of you want. we don't need the contribution and for the time being it is better to do that because it squares with a long position with some of a short position and it reduces the volatility of our p&l which at the end of the day is what all of you want I would say if you fast forward to 2027, but probably much earlier, we will be at circa 2029, plus minus. i would say if you fast forward to 2027 but probably much earlier we will be at circa 2029 plus minus The timing to do that is linked to minimizing the impact on capital and ensuring that the volatility and the impact on our P&L quarter after quarter still gets reduced over time, so you don't need to go and estimate that, etc. That is the point. With respect to the NII indication, I think for the time being, we're just confirming. As we review our rolling three-year plan, we will update you on that, and depending on how much more growth we see vis-à-vis the time where we had that, we may be updating it on the upside. The timing to do that is linked to minimizing the impact on capital and ensuring that the volatility and the impact on our P&L quarter after quarter still gets reduced over time, so you don't need to go and estimate that, etc. That is the point. the timing to do that is linked to minimizing the impact on capital and ensuring that the volatility and the impact on our p&l quarter after quarter still gets reduced over time so you don't need to go and estimate that etc that is the point With respect to the NII indication, I think for the time being, we're just confirming. with respect to the nii indication i think for the time being we're just confirming As we review our rolling three-year plan, we will update you on that, and depending on how much more growth we see vis-à-vis the time where we had that, we may be updating it on the upside. as we review our rolling three-year plan we will update you on that and depending on how much more growth we see vis-à-vis the time where we had that we may be updating it on the upside

Speaker 3: The next question is from Sofie Peterzens, Goldman Sachs. Please go ahead. The next question is from Sofie Peterzens, Goldman Sachs. the next question is from sofie peterzens goldman sachs Please go ahead. please go ahead

Speaker 9: Yes, thank you for taking my question. This is Sophie from Goldman Sachs. My first question would be, you have the 29% stake in Commerzbank and 26% in Alpha Bank. In five years' time, how should we think about the probability of UniCredit owning 100%, potentially having unchanged ownership, or not owning anything in these two banks? If you could comment on how we should think about the ownership. My second question would be around the costs. I know you will have the strategic update with the fourth quarter results next year, but how should we think about cost growth in 2026? Should we expect any restructuring costs? Very long term, do you think that there is potential for UniCredit and European banks to become much more efficient than what we are today? Yes, thank you for taking my question. yes thank you for taking my question This is Sophie from Goldman Sachs. this is sophie from goldman sachs My first question would be, you have the 29% stake in Commerzbank and 26% in Alpha Bank. my first question would be you have the 29% stake in commerzbank and 26% in alpha bank In five years' time, how should we think about the probability of UniCredit owning 100%, potentially having unchanged ownership, or not owning anything in these two banks? in five years' time how should we think about the probability of unicredit owning 100% potentially having unchanged ownership or not owning anything in these two banks If you could comment on how we should think about the ownership. if you could comment on how we should think about the ownership My second question would be around the costs. my second question would be around the costs I know you will have the strategic update with the fourth quarter results next year, but how should we think about cost growth in 2026? i know you will have the strategic update with the fourth quarter results next year but how should we think about cost growth in 2026 Should we expect any restructuring costs? should we expect any restructuring costs Very long term, do you think that there is potential for UniCredit and European banks to become much more efficient than what we are today? very long term do you think that there is potential for unicredit and european banks to become much more efficient than what we are today You have one of the best cost-to-income ratios in the sector at 37% in the first nine months, but could that potentially go down to 30% or even lower in the very long term? Thank you. You have one of the best cost-to-income ratios in the sector at 37% in the first nine months, but could that potentially go down to 30% or even lower in the very long term? you have one of the best cost-to-income ratios in the sector at 37% in the first nine months but could that potentially go down to 30% or even lower in the very long term Thank you. thank you

Speaker 10: Okay, so I think for the time being, we are quite committed to remaining at a level of participation that is below the level of a full offer for very different reasons in Alpha and in Commerzbank. With respect to Alpha, one of the reasons why, or the main reason why we have increased our stakes, 9.9%, then we went to 20%, then we went to 26%, is very simple. We have an outstanding relationship with the bank, number one, and the bank asked us and considered it a positive development for them. That is a good reason when you have a partner. Okay, so I think for the time being, we are quite committed to remaining at a level of participation that is below the level of a full offer for very different reasons in Alpha and in Commerzbank. okay so i think for the time being we are quite committed to remaining at a level of participation that is below the level of a full offer for very different reasons in alpha and in commerzbank With respect to Alpha, one of the reasons why, or the main reason why we have increased our stakes, 9.9%, then we went to 20%, then we went to 26%, is very simple. with respect to alpha one of the reasons why or the main reason why we have increased our stakes 9.9% then we went to 20% then we went to 26% is very simple We have an outstanding relationship with the bank, number one, and the bank asked us and considered it a positive development for them. we have an outstanding relationship with the bank number one and the bank asked us and considered it a positive development for them That is a good reason when you have a partner. that is a good reason when you have a partner The second good reason, because you always need to have the financial meeting, is Alpha has effectively allowed us to demonstrate to ourselves first and then to the market that the setup that UniCredit now has with centralized product factories, with centralized procurement, with increasingly aligned technology data platform, with, let's call it, put at the center all the scalable services that a group like ours can give to 13 disparate banks, allowing those disparate banks to be not only the best they can be in the market, but surpass their competitors by leveraging what UniCredit putting at scale at the center can offer them. We discussed it many times. There were countries in Central and Eastern Europe who could not distribute investment products because the large asset managers would not go there and support that growth. They were not relevant enough. Through us, they can. The second good reason, because you always need to have the financial meeting, is Alpha has effectively allowed us to demonstrate to ourselves first and then to the market that the setup that UniCredit now has with centralized product factories, with centralized procurement, with increasingly aligned technology data platform, with, let's call it, put at the center all the scalable services that a group like ours can give to 13 disparate banks, allowing those disparate banks to be not only the best they can be in the market, but surpass their competitors by leveraging what UniCredit putting at scale at the center can offer them. the second good reason because you always need to have the financial meeting is alpha has effectively allowed us to demonstrate to ourselves first and then to the market that the setup that unicredit now has with centralized product factories with centralized procurement with increasingly aligned technology data platform with let's call it put at the center all the scalable services that a group like ours can give to 13 disparate banks allowing those disparate banks to be not only the best they can be in the market but surpass their competitors by leveraging what unicredit putting at scale at the center can offer them We discussed it many times. we discussed it many times There were countries in Central and Eastern Europe who could not distribute investment products because the large asset managers would not go there and support that growth. there were countries in central and eastern europe who could not distribute investment products because the large asset managers would not go there and support that growth They were not relevant enough. they were not relevant enough Through us, they can. through us they can If they did that one by one, they couldn't. We have demonstrated not only that, but we have demonstrated with Alpha that in a bank that is absolutely not part of a group, the level of value we can generate for them and for us by leveraging those common platform products, etc., at scale is much greater than it was. If you wish, it demonstrates that even without banking union for a group like us, we can demonstrate significantly above zero value creation across border just because we're set up how we're set up. We also work with them. If they did that one by one, they couldn't. if they did that one by one they couldn't We have demonstrated not only that, but we have demonstrated with Alpha that in a bank that is absolutely not part of a group, the level of value we can generate for them and for us by leveraging those common platform products, etc., at scale is much greater than it was. we have demonstrated not only that but we have demonstrated with alpha that in a bank that is absolutely not part of a group the level of value we can generate for them and for us by leveraging those common platform products etc at scale is much greater than it was If you wish, it demonstrates that even without banking union for a group like us, we can demonstrate significantly above zero value creation across border just because we're set up how we're set up. if you wish it demonstrates that even without banking union for a group like us we can demonstrate significantly above zero value creation across border just because we're set up how we're set up We also work with them. we also work with them They provide ideas, and we are providing ideas, and we believe that we have a blueprint in the way we run our network in retail, a blueprint on our contact centers, a blueprint in our digital first, and vice versa, where we can extract a lot of efficiencies even if we're separate. If you believe that, you want to increase your participation to not only benefit from that through your part of the equation, but to gain more exposure through their part of the equation. That's why we are where we are. We will not do things in Alpha that are not in the interest of everybody, and we are very, very committed to the partnership, and we believe that Greece and Alpha are a great addition, although on a partnership basis to what the group is. They provide ideas, and we are providing ideas, and we believe that we have a blueprint in the way we run our network in retail, a blueprint on our contact centers, a blueprint in our digital first, and vice versa, where we can extract a lot of efficiencies even if we're separate. they provide ideas and we are providing ideas and we believe that we have a blueprint in the way we run our network in retail a blueprint on our contact centers a blueprint in our digital first and vice versa where we can extract a lot of efficiencies even if we're separate If you believe that, you want to increase your participation to not only benefit from that through your part of the equation, but to gain more exposure through their part of the equation. if you believe that you want to increase your participation to not only benefit from that through your part of the equation but to gain more exposure through their part of the equation That's why we are where we are. that's why we are where we are We will not do things in Alpha that are not in the interest of everybody, and we are very, very committed to the partnership, and we believe that Greece and Alpha are a great addition, although on a partnership basis to what the group is. we will not do things in alpha that are not in the interest of everybody and we are very very committed to the partnership and we believe that greece and alpha are a great addition although on a partnership basis to what the group is Commerzbank is different, and I'm not going to comment on all the differences, but again, we are committed to stay below the full bid % for the moment. We have, through the put options, protection on the downside. We are now aligned one to one if there are positive developments. The two of them together give not only €1 billion of net profit, but also €1 billion of revenues, but also €1 billion of net profit, which is fully distributable to our shareholders. Today, if I were to take that off and replace it by share buyback, I would have significant dilution. It is an engine, a further engine to propel my net revenue. It is a further engine to support distribution and net profit growth. For the time being, we're very happy to stay where we are, and I would think about now keeping that for the foreseeable future. Commerzbank is different, and I'm not going to comment on all the differences, but again, we are committed to stay below the full bid % for the moment. commerzbank is different and i'm not going to comment on all the differences but again we are committed to stay below the full bid % for the moment We have, through the put options, protection on the downside. we have through the put options protection on the downside We are now aligned one to one if there are positive developments. we are now aligned one to one if there are positive developments The two of them together give not only €1 billion of net profit, but also €1 billion of revenues, but also €1 billion of net profit, which is fully distributable to our shareholders. the two of them together give not only €1 billion of net profit but also €1 billion of revenues but also €1 billion of net profit which is fully distributable to our shareholders Today, if I were to take that off and replace it by share buyback, I would have significant dilution. today if i were to take that off and replace it by share buyback i would have significant dilution It is an engine, a further engine to propel my net revenue. it is an engine a further engine to propel my net revenue It is a further engine to support distribution and net profit growth. it is a further engine to support distribution and net profit growth For the time being, we're very happy to stay where we are, and I would think about now keeping that for the foreseeable future. for the time being we're very happy to stay where we are and i would think about now keeping that for the foreseeable future Obviously, we observe the situation, and we will judge what to do if and when the situation changes. For the time being, it's not changing. How should we think about cost growth in 2026 and restructuring costs, etc., etc.? Okay, I think this is a good question because it allows us to touch on a point. From 2021, we have been pounding the table that cost growth, absolute cost growth, above and beyond cost-to-income ratio is critical to the success of the bank. A lot of people were saying, "But why do you focus so much on cost growth with rates and this and this and that? What do you care? It's €100 million here and there." I would say to those people, "Go now tell me the same thing with rates going down." Why is cost growth such a critical point for our group? Obviously, we observe the situation, and we will judge what to do if and when the situation changes. obviously we observe the situation and we will judge what to do if and when the situation changes For the time being, it's not changing. for the time being it's not changing How should we think about cost growth in 2026 and restructuring costs, etc., etc.? Okay, I think this is a good question because it allows us to touch on a point. how should we think about cost growth in 2026 and restructuring costs etc etc okay i think this is a good question because it allows us to touch on a point From 2021, we have been pounding the table that cost growth, absolute cost growth, above and beyond cost-to-income ratio is critical to the success of the bank. from 2021 we have been pounding the table that cost growth absolute cost growth above and beyond cost-to-income ratio is critical to the success of the bank A lot of people were saying, "But why do you focus so much on cost growth with rates and this and this and that? a lot of people were saying "but why do you focus so much on cost growth with rates and this and this and that What do you care? what do you care It's €100 million here and there." I would say to those people, "Go now tell me the same thing with rates going down." Why is cost growth such a critical point for our group? it's €100 million here and there." i would say to those people "go now tell me the same thing with rates going down." why is cost growth such a critical point for our group Our competition is no longer just legacy banks. Our competition is fintechs. You just need to see how much new clients, some of our competitors, the names that come to your mind, are aggregating in every country. The only way we're going to be successful in pushing them off is twofold. One, improving our client experience. Hence, all the investment we're doing in the network, in the omnichannel, etc., etc. Two, having a break-even point that is substantially below them because it allows us to have flexibility and to be able to release some of that ability on the margin if we want to push back if a situation becomes necessary. The second reason is, as I touched on, if you are very efficient and you constantly find new ways to reduce your cost, you will be able to finance investment. Our competition is no longer just legacy banks. our competition is no longer just legacy banks Our competition is fintechs. our competition is fintechs You just need to see how much new clients, some of our competitors, the names that come to your mind, are aggregating in every country. you just need to see how much new clients some of our competitors the names that come to your mind are aggregating in every country The only way we're going to be successful in pushing them off is twofold. the only way we're going to be successful in pushing them off is twofold One, improving our client experience. one improving our client experience Hence, all the investment we're doing in the network, in the omnichannel, etc., etc. Two, having a break-even point that is substantially below them because it allows us to have flexibility and to be able to release some of that ability on the margin if we want to push back if a situation becomes necessary. hence all the investment we're doing in the network in the omnichannel etc etc two having a break-even point that is substantially below them because it allows us to have flexibility and to be able to release some of that ability on the margin if we want to push back if a situation becomes necessary The second reason is, as I touched on, if you are very efficient and you constantly find new ways to reduce your cost, you will be able to finance investment. the second reason is as i touched on if you are very efficient and you constantly find new ways to reduce your cost you will be able to finance investment Whatever anybody tells us, if you go to the market with results every quarter, if your costs are a problem, you're not investing because it would become a compounded problem. Therefore, as you don't have control on cost, to contain that appearance of no control of cost, you're investing less. In our case, we can invest more because we have control on cost. I don't have a number to give you for full year 2026, 2027, or 2028. We did commit to keep our cost broadly flat from 2024 to 2027 before, and there is no way I'm going to back down from that commitment. This year, the costs are broadly flat, are going to go close to being broadly flat, not only as they appear, but absorbing all the new perimeter of consolidation that, if I don't remember wrongly, was adding about €100 million of cost to ours. Whatever anybody tells us, if you go to the market with results every quarter, if your costs are a problem, you're not investing because it would become a compounded problem. whatever anybody tells us if you go to the market with results every quarter if your costs are a problem you're not investing because it would become a compounded problem Therefore, as you don't have control on cost, to contain that appearance of no control of cost, you're investing less. therefore as you don't have control on cost to contain that appearance of no control of cost you're investing less In our case, we can invest more because we have control on cost. in our case we can invest more because we have control on cost I don't have a number to give you for full year 2026, 2027, or 2028. i don't have a number to give you for full year 2026 2027 or 2028 We did commit to keep our cost broadly flat from 2024 to 2027 before, and there is no way I'm going to back down from that commitment. we did commit to keep our cost broadly flat from 2024 to 2027 before and there is no way i'm going to back down from that commitment This year, the costs are broadly flat, are going to go close to being broadly flat, not only as they appear, but absorbing all the new perimeter of consolidation that, if I don't remember wrongly, was adding about €100 million of cost to ours. this year the costs are broadly flat are going to go close to being broadly flat not only as they appear but absorbing all the new perimeter of consolidation that if i don't remember wrongly was adding about €100 million of cost to ours When we tell you we're broadly flat, it means we absorbed €100 million while investing. I don't think any bank is able to do that today. We are determined to continue to go because we find inefficiencies every day. Restructuring cost. I have already said that on the €10.5 billion of this year, which may or may not be greater, we will potentially, probably, possibly, it's a decision for my board, deduct some upfronting of cost in investment or some below-the-line things to further accelerate, not so much 2026, but 2027 and 2028. Okay? In our plan this year, when we started 2025, we did not have any such cost because we took them before. Indeed, the impact of these things is not having an impact on 2026. They're having an impact on 2027 and 2028. Why then have we changed our position? When we tell you we're broadly flat, it means we absorbed €100 million while investing. when we tell you we're broadly flat it means we absorbed €100 million while investing I don't think any bank is able to do that today. i don't think any bank is able to do that today We are determined to continue to go because we find inefficiencies every day. we are determined to continue to go because we find inefficiencies every day Restructuring cost. restructuring cost I have already said that on the €10.5 billion of this year, which may or may not be greater, we will potentially, probably, possibly, it's a decision for my board, deduct some upfronting of cost in investment or some below-the-line things to further accelerate, not so much 2026, but 2027 and 2028. i have already said that on the €10.5 billion of this year which may or may not be greater we will potentially probably possibly it's a decision for my board deduct some upfronting of cost in investment or some below-the-line things to further accelerate not so much 2026 but 2027 and 2028 Okay? okay In our plan this year, when we started 2025, we did not have any such cost because we took them before. in our plan this year when we started 2025 we did not have any such cost because we took them before Indeed, the impact of these things is not having an impact on 2026. indeed the impact of these things is not having an impact on 2026 They're having an impact on 2027 and 2028. they're having an impact on 2027 and 2028 Why then have we changed our position? why then have we changed our position We have changed our position for two reasons. One, we can afford it. It's the famous quote from a famous American president, "You build your roof while the sun is shining." We have a roof. I think at the moment, we're just making improvements to the entire house. The second thing is because, due to witnessing true acceleration of top line from all of our businesses and all of our countries, we feel more confident that we can spend on certain things and accelerate that growth further. Those costs or investment or restructuring, call it whatever you want to call it, are directed at showing you that we are upgrading certain numbers because we are going to track it and we are going to give more impact. We have changed our position for two reasons. we have changed our position for two reasons One, we can afford it. one we can afford it It's the famous quote from a famous American president, "You build your roof while the sun is shining." We have a roof. it's the famous quote from a famous american president "you build your roof while the sun is shining." we have a roof I think at the moment, we're just making improvements to the entire house. i think at the moment we're just making improvements to the entire house The second thing is because, due to witnessing true acceleration of top line from all of our businesses and all of our countries, we feel more confident that we can spend on certain things and accelerate that growth further. the second thing is because due to witnessing true acceleration of top line from all of our businesses and all of our countries we feel more confident that we can spend on certain things and accelerate that growth further Those costs or investment or restructuring, call it whatever you want to call it, are directed at showing you that we are upgrading certain numbers because we are going to track it and we are going to give more impact. those costs or investment or restructuring call it whatever you want to call it are directed at showing you that we are upgrading certain numbers because we are going to track it and we are going to give more impact As of now, I can't tell you what we will do in 2026, but what I can tell you is we don't need to do anything in 2026, and we don't need to do anything in 2027. If we will do something in 2026 in addition to 2025 or in 2027, it will be because the sun is shining, we're doing much better than we anticipated, and we see better opportunities to further accelerate going forward. Otherwise, we're very happy and we're set for probably up to 2028. You have a baseline. If we can beat that baseline investing more, then we can talk about it again. Once we give you the baseline at the beginning of 2026, we will hold and we will only talk about doing anything else if we beat it. Is there a potential for UniCredit and EU banks to become more efficient than today? As of now, I can't tell you what we will do in 2026, but what I can tell you is we don't need to do anything in 2026, and we don't need to do anything in 2027. as of now i can't tell you what we will do in 2026 but what i can tell you is we don't need to do anything in 2026 and we don't need to do anything in 2027 If we will do something in 2026 in addition to 2025 or in 2027, it will be because the sun is shining, we're doing much better than we anticipated, and we see better opportunities to further accelerate going forward. if we will do something in 2026 in addition to 2025 or in 2027 it will be because the sun is shining we're doing much better than we anticipated and we see better opportunities to further accelerate going forward Otherwise, we're very happy and we're set for probably up to 2028. otherwise we're very happy and we're set for probably up to 2028 You have a baseline. you have a baseline If we can beat that baseline investing more, then we can talk about it again. if we can beat that baseline investing more then we can talk about it again Once we give you the baseline at the beginning of 2026, we will hold and we will only talk about doing anything else if we beat it. once we give you the baseline at the beginning of 2026 we will hold and we will only talk about doing anything else if we beat it Is there a potential for UniCredit and EU banks to become more efficient than today? is there a potential for unicredit and eu banks to become more efficient than today My personal view, absolutely. Absolutely. Every time we go to the end of a year, we say, "Don't look at incremental. Put everything back on a blank piece of paper and ask yourself, if you were building the business from the ground up today, would you build it like that?" The answer is always, "No. We would never do this, we would never do that, we would never do that." In many cases, you can't change everything at the same time because we're flying while we're doing this. Every time that we do an inch forward, we find a lot more opportunity to do another inch and then another inch. I think for too long, our sector has said, "Oh, we cannot be more efficient than that," etc., etc. My personal view, absolutely. my personal view absolutely Absolutely. absolutely Every time we go to the end of a year, we say, "Don't look at incremental. every time we go to the end of a year we say "don't look at incremental Put everything back on a blank piece of paper and ask yourself, if you were building the business from the ground up today, would you build it like that?" The answer is always, "No. put everything back on a blank piece of paper and ask yourself if you were building the business from the ground up today would you build it like that?" the answer is always "no We would never do this, we would never do that, we would never do that." In many cases, you can't change everything at the same time because we're flying while we're doing this. we would never do this we would never do that we would never do that." in many cases you can't change everything at the same time because we're flying while we're doing this Every time that we do an inch forward, we find a lot more opportunity to do another inch and then another inch. every time that we do an inch forward we find a lot more opportunity to do another inch and then another inch I think for too long, our sector has said, "Oh, we cannot be more efficient than that," etc., etc. i think for too long our sector has said "oh we cannot be more efficient than that," etc etc I will ask everybody how many of all of us would have thought that European banks could be not only at now much below 40, but even significantly below 50% cost-to-income ratio five years ago. You can say it's rates. I can respond, "Really? Because rates have just gone down 150 basis points and we're still holding." It's exactly the same on return on tangible equity. "Oh, it's rates." Really, we're still holding at 20% and we're committed to hold or improve both on cost, on cost-to-income ratio, and on return on tangible while growing. We will demonstrate that in the next few years. I will ask everybody how many of all of us would have thought that European banks could be not only at now much below 40, but even significantly below 50% cost-to-income ratio five years ago. i will ask everybody how many of all of us would have thought that european banks could be not only at now much below 40 but even significantly below 50% cost-to-income ratio five years ago You can say it's rates. you can say it's rates I can respond, "Really? i can respond "really Because rates have just gone down 150 basis points and we're still holding." It's exactly the same on return on tangible equity. "Oh, it's rates." Really, we're still holding at 20% and we're committed to hold or improve both on cost, on cost-to-income ratio, and on return on tangible while growing. because rates have just gone down 150 basis points and we're still holding." it's exactly the same on return on tangible equity "oh it's rates." really we're still holding at 20% and we're committed to hold or improve both on cost on cost-to-income ratio and on return on tangible while growing We will demonstrate that in the next few years. we will demonstrate that in the next few years

Speaker 9: Thank you. Thank you. thank you

Speaker 3: The next question is from Andrea Filtri, Mediobanca. Please go ahead. The next question is from Andrea Filtri, Mediobanca. the next question is from andrea filtri mediobanca Please go ahead. please go ahead

Speaker 12: Thank you for taking my questions. I think you just inspired my first question, which is, when do you think you can scale a Buddy platform up to roll it out to the rest of the group, and where do you see cost-to-income trending once the new tech is rolled out? The second question is, what would banks need from the European Commission to move ahead with real mergers in Europe? The third, just a clarification, how much longer can you keep your overlays unchanged? Thank you. Thank you for taking my questions. thank you for taking my questions I think you just inspired my first question, which is, when do you think you can scale a Buddy platform up to roll it out to the rest of the group, and where do you see cost-to-income trending once the new tech is rolled out? i think you just inspired my first question which is when do you think you can scale a buddy platform up to roll it out to the rest of the group and where do you see cost-to-income trending once the new tech is rolled out The second question is, what would banks need from the European Commission to move ahead with real mergers in Europe? the second question is what would banks need from the european commission to move ahead with real mergers in europe The third, just a clarification, how much longer can you keep your overlays unchanged? the third just a clarification how much longer can you keep your overlays unchanged Thank you. thank you

Speaker 10: Okay, so I'm going to start from number three because it's an important question. My overlays, this is a debate I have with many people, my overlays will remain where they are until I am absolutely convinced that I'm in summer and the sun is shining for the next two or three years. Until then, I am not going to let go. There is no point in shaving my cost of risk to look good in the short term, and then we get some issues with macro development, some issues with credit development, some issues with something and say, "Oh, and now my cost of risk needs to quadruple." I didn't say it quadrupled, I'm just giving an example. The overlays are as what they are. I think one country where I spent a lot of time in the past, called Spain, used to call them anticyclical provision. Okay, so I'm going to start from number three because it's an important question. okay so i'm going to start from number three because it's an important question My overlays, this is a debate I have with many people, my overlays will remain where they are until I am absolutely convinced that I'm in summer and the sun is shining for the next two or three years. my overlays this is a debate i have with many people my overlays will remain where they are until i am absolutely convinced that i'm in summer and the sun is shining for the next two or three years Until then, I am not going to let go. until then i am not going to let go There is no point in shaving my cost of risk to look good in the short term, and then we get some issues with macro development, some issues with credit development, some issues with something and say, "Oh, and now my cost of risk needs to quadruple." I didn't say it quadrupled, I'm just giving an example. there is no point in shaving my cost of risk to look good in the short term and then we get some issues with macro development some issues with credit development some issues with something and say "oh and now my cost of risk needs to quadruple." i didn't say it quadrupled i'm just giving an example The overlays are as what they are. the overlays are as what they are I think one country where I spent a lot of time in the past, called Spain, used to call them anticyclical provision. i think one country where i spent a lot of time in the past called spain used to call them anticyclical provision For me, it's an anticyclical provision. When the sun shines, you create overlays and extra provision. When it rains, you release overlays and extra provision to buffer the peaks and troughs of our sector. I think that is the conservative way of looking at it. We haven't released them yet because if you ask anybody, has there been anybody who will tell you, "We're fine. The cycle of risk is fine and there are no issues, and for the next three to five years, it's all fine"? Nobody's saying that, so why should I release? Accounting-wise, we release when some of the overlays are driven by drivers. The drivers are linked to areas of risk. Sometimes the areas of risk that we identify finish, and therefore the overlays are released. For me, it's an anticyclical provision. for me it's an anticyclical provision When the sun shines, you create overlays and extra provision. when the sun shines you create overlays and extra provision When it rains, you release overlays and extra provision to buffer the peaks and troughs of our sector. when it rains you release overlays and extra provision to buffer the peaks and troughs of our sector I think that is the conservative way of looking at it. i think that is the conservative way of looking at it We haven't released them yet because if you ask anybody, has there been anybody who will tell you, "We're fine. we haven't released them yet because if you ask anybody has there been anybody who will tell you "we're fine The cycle of risk is fine and there are no issues, and for the next three to five years, it's all fine"? the cycle of risk is fine and there are no issues and for the next three to five years it's all fine" Nobody's saying that, so why should I release? nobody's saying that so why should i release Accounting-wise, we release when some of the overlays are driven by drivers. accounting-wise we release when some of the overlays are driven by drivers The drivers are linked to areas of risk. the drivers are linked to areas of risk Sometimes the areas of risk that we identify finish, and therefore the overlays are released. sometimes the areas of risk that we identify finish and therefore the overlays are released We always, unfortunately or fortunately, find new areas of worry that drive the replenishing of the overlays at exactly the same level they were before. We will do that until when they release, we look out and we say, "Wow, there is really nothing else. There is no point in maintaining them." Hopefully, we will do that without having had to use them to contain our cost of risk, but we don't know. Nobody knows. That's the point. For us, overlays are an insurance policy, but one that will pay up and propel our net income if it doesn't need to be used because we are all wrong and the cycle of risk is benign and will remain benign for the foreseeable future, which everybody doubts. The first question, Vodeno and the growth and etc. We always, unfortunately or fortunately, find new areas of worry that drive the replenishing of the overlays at exactly the same level they were before. we always unfortunately or fortunately find new areas of worry that drive the replenishing of the overlays at exactly the same level they were before We will do that until when they release, we look out and we say, "Wow, there is really nothing else. we will do that until when they release we look out and we say "wow there is really nothing else There is no point in maintaining them." Hopefully, we will do that without having had to use them to contain our cost of risk, but we don't know. there is no point in maintaining them." hopefully we will do that without having had to use them to contain our cost of risk but we don't know Nobody knows. nobody knows That's the point. that's the point For us, overlays are an insurance policy, but one that will pay up and propel our net income if it doesn't need to be used because we are all wrong and the cycle of risk is benign and will remain benign for the foreseeable future, which everybody doubts. for us overlays are an insurance policy but one that will pay up and propel our net income if it doesn't need to be used because we are all wrong and the cycle of risk is benign and will remain benign for the foreseeable future which everybody doubts The first question, Vodeno and the growth and etc. the first question vodeno and the growth and etc We did a step that no other bank had done, which is instead of experimenting with external providers on modernizing our core banking system, modernizing our data platform using AI, by lack of opportunity relationships, we found what we believe, after diligence, to be one of the best, if not the best, core banking system platform of external providers out there. Why do I think it's one of the best? Number one, the break-even point of that platform is two-thirds to 70% below ours today. By the way, it's not because ours is not good, but because ours is legacy and theirs is not. It's all cloud native. Second reason, it is flexible. A lot of this platform, you can do transaction and payments. You cannot do multiple products. With Vodeno platform, you can. Because of that, we bought it. I think we bought it at an attractive price. We did a step that no other bank had done, which is instead of experimenting with external providers on modernizing our core banking system, modernizing our data platform using AI, by lack of opportunity relationships, we found what we believe, after diligence, to be one of the best, if not the best, core banking system platform of external providers out there. we did a step that no other bank had done which is instead of experimenting with external providers on modernizing our core banking system modernizing our data platform using ai by lack of opportunity relationships we found what we believe after diligence to be one of the best if not the best core banking system platform of external providers out there Why do I think it's one of the best? why do i think it's one of the best Number one, the break-even point of that platform is two-thirds to 70% below ours today. number one the break-even point of that platform is two-thirds to 70% below ours today By the way, it's not because ours is not good, but because ours is legacy and theirs is not. by the way it's not because ours is not good but because ours is legacy and theirs is not It's all cloud native. it's all cloud native Second reason, it is flexible. second reason it is flexible A lot of this platform, you can do transaction and payments. a lot of this platform you can do transaction and payments You cannot do multiple products. you cannot do multiple products With Vodeno platform, you can. with vodeno platform you can Because of that, we bought it. because of that we bought it I think we bought it at an attractive price. i think we bought it at an attractive price I think that it allows us to bring in 200 engineers that we can use on the side of a group as a sandbox to experiment on things. A lot more exciting job than our continued rationalization of what we have. They're there. As they're there, we are doing a number of initiatives with them. One is the new entry into Poland. People look at it as the new entry into Poland. I don't look at it as the new entry into Poland. I look at it as Vodeno with this break-even point at that level, with a digital-first bank, which also relies on branches because we will have 40 branches in Poland. Can it get in from the ground up and make money? I think that it allows us to bring in 200 engineers that we can use on the side of a group as a sandbox to experiment on things. i think that it allows us to bring in 200 engineers that we can use on the side of a group as a sandbox to experiment on things A lot more exciting job than our continued rationalization of what we have. a lot more exciting job than our continued rationalization of what we have They're there. they're there As they're there, we are doing a number of initiatives with them. as they're there we are doing a number of initiatives with them One is the new entry into Poland. one is the new entry into poland People look at it as the new entry into Poland. people look at it as the new entry into poland I don't look at it as the new entry into Poland. i don't look at it as the new entry into poland I look at it as Vodeno with this break-even point at that level, with a digital-first bank, which also relies on branches because we will have 40 branches in Poland. i look at it as vodeno with this break-even point at that level with a digital-first bank which also relies on branches because we will have 40 branches in poland Can it get in from the ground up and make money? can it get in from the ground up and make money I'm not going to tell you how many clients we're going to get on the platform, and I'm not even going to tell you how many products I'm selling. I am going to tell you, can we make money at 20% return on equity? If we can, that's the proof of the pudding, and therefore it's replicable in other places. Initiative number one. Initiative number two, Vodeno comes with an already functioning, and I believe unparalleled embedded finance platform. We're going to leverage it to the entire group, and it's an area of growth for our landing. Initiative number three, Vodeno allows us, when our internal technology and Vodeno look at our legacy system, to look at the possibility of migrating on the Vodeno platform. Incidentally, Vodeno is the only platform that has done it. We call it Vodeno Ion, but what is Ion? I'm not going to tell you how many clients we're going to get on the platform, and I'm not even going to tell you how many products I'm selling. i'm not going to tell you how many clients we're going to get on the platform and i'm not even going to tell you how many products i'm selling I am going to tell you, can we make money at 20% return on equity? i am going to tell you can we make money at 20% return on equity If we can, that's the proof of the pudding, and therefore it's replicable in other places. if we can that's the proof of the pudding and therefore it's replicable in other places Initiative number one. initiative number one Initiative number two, Vodeno comes with an already functioning, and I believe unparalleled embedded finance platform. initiative number two vodeno comes with an already functioning and i believe unparalleled embedded finance platform We're going to leverage it to the entire group, and it's an area of growth for our landing. we're going to leverage it to the entire group and it's an area of growth for our landing Initiative number three, Vodeno allows us, when our internal technology and Vodeno look at our legacy system, to look at the possibility of migrating on the Vodeno platform. initiative number three vodeno allows us when our internal technology and vodeno look at our legacy system to look at the possibility of migrating on the vodeno platform Incidentally, Vodeno is the only platform that has done it. incidentally vodeno is the only platform that has done it We call it Vodeno Ion, but what is Ion? we call it vodeno ion but what is ion Ion is the ex-Monte dei Paschi di Siena, Belgium. It had a legacy platform like all of us. It was migrated in full to Vodeno in under a year. Not the scale of UniCredit, not the scale of our unique banks, but it worked. It is premature to tell you when, how is it possible, but certainly in the trajectory of looking at what we can do to continue to modernize and migrate, that is considered, as it is considered every time we have a new initiative that is completely new to the group, moving to the cloud, do this, do that. They are help, contribution to our own team to be able to accelerate that because we have capacity, engineering capacity to accelerate it. For me, Vodeno is an outstanding sandbox and an acceleration leverage for us that we are experimenting with, and I'm very, very happy to have. Ion is the ex-Monte dei Paschi di Siena, Belgium. ion is the ex-monte dei paschi di siena belgium It had a legacy platform like all of us. it had a legacy platform like all of us It was migrated in full to Vodeno in under a year. it was migrated in full to vodeno in under a year Not the scale of UniCredit, not the scale of our unique banks, but it worked. not the scale of unicredit not the scale of our unique banks but it worked It is premature to tell you when, how is it possible, but certainly in the trajectory of looking at what we can do to continue to modernize and migrate, that is considered, as it is considered every time we have a new initiative that is completely new to the group, moving to the cloud, do this, do that. it is premature to tell you when how is it possible but certainly in the trajectory of looking at what we can do to continue to modernize and migrate that is considered as it is considered every time we have a new initiative that is completely new to the group moving to the cloud do this do that They are help, contribution to our own team to be able to accelerate that because we have capacity, engineering capacity to accelerate it. they are help contribution to our own team to be able to accelerate that because we have capacity engineering capacity to accelerate it For me, Vodeno is an outstanding sandbox and an acceleration leverage for us that we are experimenting with, and I'm very, very happy to have. for me vodeno is an outstanding sandbox and an acceleration leverage for us that we are experimenting with and i'm very very happy to have If you look at what will take for the EC, the European community, to allow banks to move with real mergers in Europe, I think you can look at it in two ways. Way number one, we need a banking union to do cross-border merger. How long is a piece of string? You need to ask them. Everybody says we need it, nobody wants to do it. You can look at it in another way. Regardless of a banking union, can we do cross-border merger and extract value? UniCredit can. I don't think anybody else can. That may be arrogant from our standpoint, but I think we can because of the setup that we have with 13 plus 1 banks, common factories, increasingly common technology platform, data platform, procurement, strategy, vision, purpose, talent, university, etc. If you look at what will take for the EC, the European community, to allow banks to move with real mergers in Europe, I think you can look at it in two ways. if you look at what will take for the ec the european community to allow banks to move with real mergers in europe i think you can look at it in two ways Way number one, we need a banking union to do cross-border merger. way number one we need a banking union to do cross-border merger How long is a piece of string? how long is a piece of string You need to ask them. you need to ask them Everybody says we need it, nobody wants to do it. everybody says we need it nobody wants to do it You can look at it in another way. you can look at it in another way Regardless of a banking union, can we do cross-border merger and extract value? regardless of a banking union can we do cross-border merger and extract value UniCredit can. unicredit can I don't think anybody else can. i don't think anybody else can That may be arrogant from our standpoint, but I think we can because of the setup that we have with 13 plus 1 banks, common factories, increasingly common technology platform, data platform, procurement, strategy, vision, purpose, talent, university, etc. that may be arrogant from our standpoint but i think we can because of the setup that we have with 13 plus 1 banks common factories increasingly common technology platform data platform procurement strategy vision purpose talent university etc It's just a container that accelerates and extracts more value than we could individually from every bank that chooses to partner with us. In addition to that, we believe that our blueprint from running transformation and banking can extract value from a number of banks even if we're not doing an in-market merger. Most importantly, we are in 13 markets. We're not hostage of any one market, and we can always look. Having said that, if you ask me what the time of everybody at UniCredit has been dedicated to across the board, and even more so in the last six months or three months or four months, it is providing you with an underlying performance that accelerates and the new plan that you will see from 2026 onward. It's just a container that accelerates and extracts more value than we could individually from every bank that chooses to partner with us. it's just a container that accelerates and extracts more value than we could individually from every bank that chooses to partner with us In addition to that, we believe that our blueprint from running transformation and banking can extract value from a number of banks even if we're not doing an in-market merger. in addition to that we believe that our blueprint from running transformation and banking can extract value from a number of banks even if we're not doing an in-market merger Most importantly, we are in 13 markets. most importantly we are in 13 markets We're not hostage of any one market, and we can always look. we're not hostage of any one market and we can always look Having said that, if you ask me what the time of everybody at UniCredit has been dedicated to across the board, and even more so in the last six months or three months or four months, it is providing you with an underlying performance that accelerates and the new plan that you will see from 2026 onward. having said that if you ask me what the time of everybody at unicredit has been dedicated to across the board and even more so in the last six months or three months or four months it is providing you with an underlying performance that accelerates and the new plan that you will see from 2026 onward It is not thinking that M&A is the only solution for us to buffer growth, which is what people who cannot grow anymore have to think. We will look at M&A if it accelerates, and we're very happy not to look at it if it doesn't. In the same way, we were very fast to take the opportunity on the stakes, and we will not do anyone because we're moving in a direction without needing anything more. If there are opportunities, we move fast. If there are not, the core is UniCredit at its foundation. It is not thinking that M&A is the only solution for us to buffer growth, which is what people who cannot grow anymore have to think. it is not thinking that m&a is the only solution for us to buffer growth which is what people who cannot grow anymore have to think We will look at M&A if it accelerates, and we're very happy not to look at it if it doesn't. we will look at m&a if it accelerates and we're very happy not to look at it if it doesn't In the same way, we were very fast to take the opportunity on the stakes, and we will not do anyone because we're moving in a direction without needing anything more. in the same way we were very fast to take the opportunity on the stakes and we will not do anyone because we're moving in a direction without needing anything more If there are opportunities, we move fast. if there are opportunities we move fast If there are not, the core is UniCredit at its foundation. if there are not the core is unicredit at its foundation

Speaker 3: We will now take the last question from Manuela Meroni in Intesa Sanpaolo. Please go ahead. We will now take the last question from Manuela Meroni in Intesa Sanpaolo. we will now take the last question from manuela meroni in intesa sanpaolo Please go ahead. please go ahead

Speaker 11: Yes, thank you for taking my question. The first one is on the revision of the taxation of the dividend paid on the EU subsidiaries. I'm wondering if you expect any refund following such a revision. The second question is on your strategy in Italy. It's clear that now you are focusing on the organic growth, but I'm wondering if you could be still open to inorganic growth, and in that case, what would be the area and the business in which you may potentially be interested in? Thank you. Yes, thank you for taking my question. yes thank you for taking my question The first one is on the revision of the taxation of the dividend paid on the EU subsidiaries. the first one is on the revision of the taxation of the dividend paid on the eu subsidiaries I'm wondering if you expect any refund following such a revision. i'm wondering if you expect any refund following such a revision The second question is on your strategy in Italy. the second question is on your strategy in italy It's clear that now you are focusing on the organic growth, but I'm wondering if you could be still open to inorganic growth, and in that case, what would be the area and the business in which you may potentially be interested in? it's clear that now you are focusing on the organic growth but i'm wondering if you could be still open to inorganic growth and in that case what would be the area and the business in which you may potentially be interested in Thank you. thank you

Speaker 10: Okay, so, answer to your question, without wanting to speculate as things are constantly moving in our countries and in the rest of Europe, I would be positive on the answer to question number one. Do we expect any refund following the revision of the taxation of dividends paid by EU subsidiaries because it's supported by a clear deliberal decision. Strategy initially would be, would you be open to inorganic growth? If so, in what areas? We're always open. We're always open, but if you ask me, it's almost like I said to someone, what is the possibility that you go on Mars? It's possible. It's not probable in the short term. It's not probable because of all the reasons you know very well, and most importantly, because yet again, I got confirmation that when you do M&A, you slow down your own franchise significantly. Okay, so, answer to your question, without wanting to speculate as things are constantly moving in our countries and in the rest of Europe, I would be positive on the answer to question number one. okay so answer to your question without wanting to speculate as things are constantly moving in our countries and in the rest of europe i would be positive on the answer to question number one Do we expect any refund following the revision of the taxation of dividends paid by EU subsidiaries because it's supported by a clear deliberal decision. do we expect any refund following the revision of the taxation of dividends paid by eu subsidiaries because it's supported by a clear deliberal decision Strategy initially would be, would you be open to inorganic growth? strategy initially would be would you be open to inorganic growth If so, in what areas? if so in what areas We're always open. we're always open We're always open, but if you ask me, it's almost like I said to someone, what is the possibility that you go on Mars? we're always open but if you ask me it's almost like i said to someone what is the possibility that you go on mars It's possible. it's possible It's not probable in the short term. it's not probable in the short term It's not probable because of all the reasons you know very well, and most importantly, because yet again, I got confirmation that when you do M&A, you slow down your own franchise significantly. it's not probable because of all the reasons you know very well and most importantly because yet again i got confirmation that when you do m&a you slow down your own franchise significantly I think that the revived momentum that Italy is experiencing now and the commitment they are making to themselves to gain market share creates a ton more value than being in a situation where, because of now the lens of regulatory and political approval, we are all in a swamp for a year before being able to move anywhere. There are a lot of considerations that are not value creation or certainly not value creation for the shareholder of a UniCredit cloud judgment. For us, we look, if there are good opportunities, we're there. If people are interested in creating value, we will run. We think that we can achieve a lot organically, and we will demonstrate it through 2026 to 2028. That's where the focus is, I would say, mostly, if not exclusively. I think that the revived momentum that Italy is experiencing now and the commitment they are making to themselves to gain market share creates a ton more value than being in a situation where, because of now the lens of regulatory and political approval, we are all in a swamp for a year before being able to move anywhere. i think that the revived momentum that italy is experiencing now and the commitment they are making to themselves to gain market share creates a ton more value than being in a situation where because of now the lens of regulatory and political approval we are all in a swamp for a year before being able to move anywhere There are a lot of considerations that are not value creation or certainly not value creation for the shareholder of a UniCredit cloud judgment. there are a lot of considerations that are not value creation or certainly not value creation for the shareholder of a unicredit cloud judgment For us, we look, if there are good opportunities, we're there. for us we look if there are good opportunities we're there If people are interested in creating value, we will run. if people are interested in creating value we will run We think that we can achieve a lot organically, and we will demonstrate it through 2026 to 2028. we think that we can achieve a lot organically and we will demonstrate it through 2026 to 2028 That's where the focus is, I would say, mostly, if not exclusively. that's where the focus is i would say mostly if not exclusively If something comes up, as we have demonstrated, we're always very quick to move, but we do not expect that something will come up. If something comes up, as we have demonstrated, we're always very quick to move, but we do not expect that something will come up. if something comes up as we have demonstrated we're always very quick to move but we do not expect that something will come up

Speaker 3: Okay, gentlemen, that was the last question. Thank you. Okay, gentlemen, that was the last question. okay gentlemen that was the last question Thank you. thank you

Speaker 10: Thank you very much. Thank you very much. thank you very much

Speaker 3: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect. Ladies and gentlemen, thank you for joining. ladies and gentlemen thank you for joining The conference is now over, and you may disconnect. the conference is now over and you may disconnect