Andrea Orcel (Unicredit) speaks about Banco BPM, Commerzbank, and Golden Power.

We all agree on the Golden Power with the objectives that are set and discussed each time—the support of the economy, small and medium enterprises, and families' savings. No one disagrees. Besides, our bank is managed this way. I remind everyone of something not discussed often: our lending to SMEs rose 40% in the first quarter alone, because it's key to our growth strategy, and we have both the capital and liquidity to do it. But where there is debate is on the reasons for applying the Golden Power, particularly national defense or national security, given the way the prescriptions were written. If they were written differently, there would be no problem for us. Many people believe the framework of application is not the right one, so we went to the TAR as we said we would. But the TAR ruling—or the TAR-Council of State process—won't arrive in time to give us certainty on closing the operation. So it could lapse and potentially be reformulated.

It can always be reformulated.

Dr. Messina, as always, is right. There is a new factor in M&A in Europe that has always existed but not at these extremes—government intervention in banking system operations. Unless you had a crystal ball, nobody saw it coming, because BBVA in Spain has the exact same problems. It's not an Italian or Spanish issue—it's happening in Germany, Hungary, Romania, and everywhere there are operations. If we started doing operations in other countries, we'd face the same situation. It's a new world where the influence of states and governments on market operations has become very significant. From another perspective, European institutions—the EU, ECB, Commission—have a different vision: they want a stronger banking system. We talk about Europe standing on its own feet against the US and China. Without banks, it's impossible—banks are the financial fuel for industry and the economy. We have dwarf banks with regulatory limitations on lending. I believe these two visions are going in different directions. In Italy, it's a lost opportunity. In Spain, the main banks all have over 20-25% market share. In Italy, we're second at 9%. You can't have competition between David and Goliath if one doesn't have the slingshot. We have the slingshot—our pan-European network—but the system structure isn't right. SMEs and families can't access all the services larger banks could provide. If we don't do it this time, Italy will have an unbalanced system. We need to dismantle the narrative that consolidation makes it harder to access credit. We've committed—1 plus 1 at UniCredit on SMEs equals 2 plus. Not 1.2 as happened with a non-Italian bank buying a small Italian bank. That's not our strategy. If BPM gives 100 and we give 100, we go to 200 plus growth. We have capital at 16% and excess liquidity. BPM has capital at 12.85% and tight liquidity. Between 2021 and 2024, we invested 5 to 7 times what mid-sized Italian banks invested in technology. All banks excluding Intesa are under 10% market share.

No, on Monte—you already mentioned it. But I don't believe so. We reached a crossroads similar to the one we're reaching now. The operation made sense industrially, but the numbers didn't work. I have an obligation and duty to my shareholders, colleagues, and clients. At the starting point—not today—the economic and risk conditions presented didn't work for us. The bank had 17.5 billion in market capitalization, and we saw much more internal value than external value. That concept returns today. We shook hands and parted ways. If you look at UniCredit's share price increase from then to now versus Monte dei Paschi—where 2.5 billion had to be put in—we made a good decision. The BPM operation is valid industrially, strategically, and for the country—much more support for SMEs and families, a network others can't provide. But it clashes with different visions that make it de facto uneconomic. The conditions can be converted into legal obstacles or increased economic costs.

Yes, if they remain as they are, absolutely.

I wouldn't put it that way. That's a question for the government, not me. BBVA in Spain has the same problem—the government is opposed there too. Governments have their vision. The only issue is this vision should benefit from greater information about reality. UniCredit lends more to SMEs than others. We're the only bank that gave 35 billion in subsidized facilities in three years. We've gone from 18,000 to 18,500 network employees, hiring 5,000 young people. We have more government bonds than any Italian bank, including Intesa, and we're smaller. If you spoke with Carlos Torres at BBVA, he'd tell you something similar. It's not an Orcel-Torres or UniCredit-BBVA issue. Governments have a vision formed partly on information from counterparties with every interest in these operations failing. The technical entities of the banking sector are almost all aligned in favor of greater consolidation to support Europe's transformation. We talk about defense, growth, innovation—who finances them? Government balance sheets are full. Banks must do it. To go beyond concentration limits, we need to be bigger—without eliminating competition, because 9% doesn't eliminate competition. On the deposit-to-loan ratio: a high ratio is a risk element because I must fund myself on markets. In recession, savings shift to deposits while lending drops—I take a penalty or must lend just to lend. In growth, deposits move away and I'd have to call back loans. The ratio doesn't work. But the objective is achievable, and we're in no disagreement with the government on objectives.

First, we focus too much on M&A—even in a forum about our people, we end up talking about banking deals. I remind everyone: when the new management formed, our share was at 7.56. We were at 17.5 billion market cap; we're now at almost 90. We distributed 26 billion to shareholders in four years. We'll do better in the next four. I don't need to do M&A—it must add value, not reduce it to do a favor for others who squeezed the lemon dry. If conditions are right, we'll do the operations. If not, we return to the best trajectory in Europe. BPM and Commerzbank are very different. On BPM, we made a de facto hostile bid, but due to BPM's actions and exogenous factors, our value creation capacity was reduced—they destroyed an estimated billion in value, dropping from 15% to 12.85% capital. Consob asked us to delay 2024 distributions. At the current exchange ratio, BPM shareholders would get 40% more distributions and 30% more net profit growth per share. That's quite generous. On Commerzbank—totally different. We've never launched an operation. We have 30%. That 30% can stay, be returned to shareholders for more returns, or become an operation involving all or part of Commerzbank. We're in no rush. HVB was founded before Commerzbank, has equal or larger SME market share, intermediates more Germany-Europe trade, and has double the return on capital and efficiency. We can wait.