Evening. This is the Chorus conference operator. Welcome and thank you for joining the Banco BPM Group H1 2025 results presentation. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time I would like to turn the conference over to Mr. Arne Riscassi, IR Manager of Banco BPM. Please go ahead, sir.
Good afternoon everybody and thanks for joining the Banco BPM Alfea results conference call. Giuseppe Castagna, our CEO, and Edoardo Ginevra, Joint General Manager and CFO, will take you through the presentation which will be followed by a Q and A session. Please just let me remind you to limit to maximum two questions each. I will hand over to Mr. Castagna.
Good evening everybody. Welcome to our H1 presentation. Very happy to give you this presentation which is full of good results and state of art of our business plan. Target already reached in our H1. First of all, very good. Net income at an all-time high at EUR 1,210,000,000. Well on track on our target of this year EUR 1,950,000,000. Very good news also from capital. Remember that we had a guidance over 13%. We are already at 13.3% of CET1.
Also of course this will be the first presentation which we have also consolidated from the second quarter Anima results. I will try to give you both figures. One like-for-like without Anima contribution and of course the stated one which includes also Anima contribution which means Q2 contribution plus the one-off on capital gain. Let's start from net income. 31% like-for-like increase from EUR 750 million of H1 last year to almost EUR 1,984,000,000 this first half of the year to which we have to add EUR 230 million of global contribution of Anima .
Let's say that these account for EUR 54 million being the contribution of Q2, EUR 200 million being the capital gain, and - EUR 25 million which are the cost of both the successful OPA and the abandoned OPS for a total again net income of more than EUR 1.2 billion in six months which represents 62% of our guidance of almost EUR 2 billion, EUR 1,950,000,000 for 2025. Again the guidance is really be overcome by our Common Equity Tier 1. All these results I would say are thanks to the confirmation our model to be very close to our client, to our territory and is well represented by the growth that we had both in new lending for EUR 15.3 billion in the first six months of the year, which represents 50% more than the same period last year, and also the sales of investment products which is 12%+ year- on- year.
Very good performance also on the management of our credit portfolio which declined 23% year- on- year. If we exclude considering net NP the loans with state guarantee which we don't want to sell because are very much well covered, then we can cash all the difference. We are below 1%, 0.84%. We confirm the interim dividend also for this year, which will be approved by the board in November and be paid the same month during 2025 for a total consideration of EUR 700 million, even though we have already accrued in the first half of the year EUR 800 million of potential dividend to be distributed. Page seven. Let's consider what happened to our bank with Anima consolidation to confirm the successful strategy that we had in launching the public offer on Anima .
We have our group now handling EUR 155 billion of assets under management on top of the more than EUR 200 billion of the bank, with a total consideration of EUR 383 billion managed by the group. Also, the contribution to the fees and the net fees and net income is very considerable. We increase with Anima on a performance basis 23% net fees and 11% net income of the group. Another very important target that we have already reached, which was one of the main targets for 2027 of our business plan, was to even the contribution from non-NII to the one given by NII. I'm sure you remember that our target was to reach 50% of non-NII.
Let's say that after first half of the second year of the plan, but the first year with Anima insight, we are already at 49% of non-NII on total revenues contribution, and also the contribution to net income from wealth management, asset management, and protection is already at the target level of 35%. Very consistent is also the increase of both return on equity and return on tangible equity, respectively to 17% and 22.6%. Also, the pre-tax and pre one-off profit contribution is already at the level of the final year of the business plan. We are already at EUR 1.6 billion vis-à-vis EUR 1.577 billion, being an average of the results of 2027. The contribution comes from very solid growth in revenues. As you can see on the left, we grew notwithstanding EUR 124 million reduction in NII year on year, we grew non-NII EUR 213 million.
For a total consideration EUR 2.883 billion, which is 3.2% like-for-like growth, to which we have to add a contribution second quarter of Anima , which is EUR 141 million, ending up to more than EUR 3 billion in the first half of the year. Again, the non-NII revenues grew from 38% in the first half of 2024 to 45% like-for-like. If we have a pro forma consolidation of Anima for all the year, we are already, as I mentioned before, at 49% of contribution. This was coupled by very strong cost control. We reduced our cost from 2% points to 2.6% like-for-like. We are basically at the same level of cost even over 2024, even if we include the cost related to Anima for the second quarter.
The same we can say for the declining of provision, which went down 24% from EUR 215 million to EUR 163 million, which comes from a reduction of LLPs from EUR 194 million- EUR 164 million and basically to reduce it to zero. The other provision, mainly on real estate on page nine, this was coupled again by a very strong capital position. We started, as you know, with 15% at the end of last year. We had to face two very strong reductions coming from the Anima acquisition, of course, after the denial of the application of Danish compromise, which accounted for 242 basis points and regular headwinds for 62 basis points, mainly related to Basel III. This ended up our capital to 12%, to which we were able to add both with organic capital generation and managerial action.
Mainly, I would say regarding on fair value, on comprehensive income DTA and so on, the level of the capital above the 3%- 13.3%. The same comes from MDA buffer, which grew from an average level that we mentioned in Q1 of 350 basis points to almost 380 basis points. Generally speaking, you know that our business plan has been done with the strong thought of transforming our bank from a pure commercial bank into a more consolidated bank with all the product factory contributing to the final results. In order to do that, it takes time, but we were very quick to reach some of the target already forecast for 2027 already in the first half of the year.
Notwithstanding that, there is still a long way to complete, and we want just to say that for the different product factory that we consolidated, let's say in the last three years, 2023, 2024, and 2025, we are still halfway, I would say, to the final full steam that we think can happen starting from 2026 for the different product factory. Let's say that life insurance that we integrated in 2023, but we had the opportunity only to switch in terms of IT system during 2Q25. We have completed the migration very successfully. Meanwhile, our joint venture PNC is still under migration, which is to be completed in the second part of 2025.
This is just to say that these are very long, time-consuming transactions which are already giving very good result to our bank but still have to perform in the terms that we forecast in the business plan because still has to bring more value to our bank. The same we can say for the payment system on Numiya joint venture with ICCREA and FSI as the transaction was completed in 2024. We worked a lot last quarter 2024, first quarter 2025 to complete the POS migration which is completely successfully completed. We are now starting with the issuing migration, so the issuing of credit cards to our clients, and this will take for the whole 2025. Full steam will be in 2026. Last but not least, Anima, which was announced, the cash offer was announced on the 6th of November 2024, as you know, has been completed April 2025.
This is the first quarter in which we consolidate Anima and the numbers are already very loudly speaking, but still we think that with all the synergy we can have full steam again in 2026. I would say very good result up to now, but it is a long work and we have to wait maybe another year to see better and stronger results that we expect. Let's have a look to the roadmap to the plan target. As you know, we plan to terminate 2027 with EUR 2,150,000,000 of net profit. We have on the right side of the slide 11 split in two.
Of course, the half one and half two compared with H1 2025 pro forma, which means consolidating Anima for both quarters, not only for the one that is stated, not considering of course the one off, and comparing this figure with our final plan target. As you can see, total revenues are almost there. We have performed EUR 3,150,000,000 as total revenues compared to EUR 3,180,000,000 of the target of the plan, which is we are slightly above in terms of NII EUR 30 million above, slightly below EUR 70 million below in terms of fees and commission.
This is why I explained to you that the roadmap for the increasing of volumes of the product factory are still to come with core revenues which are EUR 3,100,000,000 vis a vis EUR 3,160,000,000 with non-interest income contribution of 49% compared with 50% of the plan and operating costs which are already at the level of the 2027 plan target. Cost income is already there, 44%. We are below in terms of cost of risk with the net income excluding one off and by far minorities which is almost EUR 1,060,000,000 compared to EUR 1,075,000,000 of the business plan. Still some room but very close to the final target. Let's have a look on page 13 to the main figure of our H1. Of course, we are comparing like for like in the first two columns and we just put also the stated number on the fourth column of the slide.
I will comment of course only the like for like. We are 7% below in terms of net interest income. If you consider the NII at full funding cost, which means including the cost of the reduction that we experience, cost of certificates, the total NII cost has been 4.2% below last year results and this 4.2% has been completely replaced by increase of 4.4% in terms of net fees and commission which grew 4.4%. Let's say that we had also a very strong increase in terms of income from insurance from EUR 25 million to EUR 80 million. We had a good net financial result from EUR -76 million-EUR + 46 million and this brought total revenues 3.2% vis-à- vis H1 2024. We already spoke about the reduction of 2.6% in terms of operating cost which brings the pre-provision income to + 8.5%.
We experienced some reduction in total provision. We grow the contribution profit from continuing operation pre-tax to 14% and post-tax to almost 18% more than the first six months of 2024. Of course, 2024 was impacted from the last tranche of systemic charge. We end up with a 31% of increase like-for-like accounting net income to EUR 984 million. Meanwhile, including Anima , we reach a net profit stated of EUR 1.2 billion. On the right side you can see the main trends 2023, 2024, 2025. Both of course compared with the first with H1 of each year and you see that the growth and improvement was good. In all the main line of the profit and loss, revenues grew almost 12%. Cost income went down 4 full percentage points, LLP were down 36% and the net profit from continuing operation was up 42%. Let's go through some items.
NII EUR 1.6 billion results over the year - 7% year on year. Meanwhile, we have the Q2 compared to Q1 at only 3.9% below. If we exclude a one-off over Q1 related to interest on a previous litigation, we have like-for-like an increase of 1%. Also Q2 and Q1 on net interest income. Let's consider how these six months results come from a reduction of Euribor which in H1 2024 was 3.87% and was down to 2.33% in H1 2025. The sensitivity would have brought down more than EUR 200 million our results. We were able to recover EUR 91 million through managerial action. Through managerial action excluding one-off, we have already recovered EUR 65 million out of the EUR 100 million. We said in our presentation of the strategic plan we would end up the 2027. Almost two-thirds of the recovery has already been done in the first six months.
Let's pass to the trend of commercial spreads. Spreads are doing much better than the reduction of Euribor as you can see both year on year. Compared with Q2 2024, we have had Euribor down 170 basis points with the commercial spread only 118 basis points. Meanwhile, Q2 and Q1 2025, the reduction of, sorry, of Q2 2025 to Q4 2024. In the last six months, the reduction of the Euribor was 91 basis points. Meanwhile, we managed to reduce commercial spread only 66 basis points. On the bottom side of the right part of the slide, you will find the update on the managerial action that you well know. We have increased our replicating portfolio to EUR 26.5 billion, up from EUR 22 billion end of the year, with an average receiving yield of 2.1% and the duration of 2.7 years.
The share of index current account stayed at 36% compared with 34% full year. You can see also some indication about the low cost of wholesale funding that we are experiencing thanks to the better perception of our risk profile confirmed by the rating agency. Also, after the abandonment of our OPS very recently, we will tell afterwards some detail, but the reduction of the spread as you can see is really massive, contributing to the bettering of our results vis a vis the final target of the industrial plan. We have been reaching these results continuing to do the work that we do better, supporting our clients, our territory, putting all our effort in serving our corporates and retail clients which led us to increase 50% the new lending granted.
Specifically, we increased the lending to household, so the mortgage side to private individuals, 68% year on year and almost 40%. The new lending to small business and the new lending to small business has been 59% guaranteed by state guarantee vis a vis 52% which was the average in 2024. The stock of performing loans basically has the same level of end of the year. This is just because we reduced EUR 1.6 billion our exposure to some institutional big ticket. Meanwhile, both in the household we grow 1% in the stock and in non-financial corporates we grew 1.8% toward the end of the year. All in all, 52% of non-financial corporate portfolio is secured, 27% with state guarantee and 25% with collateral. In terms of direct customer funding, this is driven by deposit which grew from EUR 100 million to EUR 101.9 billion.
Meanwhile, the certificate's reduction was EUR 400 million, bringing the total direct customer funding to EUR 107.3 billion. On page 16, let's have a look to the growth of the commission. Like for like, we grew 4.4%. Normalizing for the reduction in the Eco Bonus and the instant payments, we have grown more than 7% year on year. Of course, the stated result is much higher because we consider also the integration of Anima to EUR 1.2 billion. If we would consider a pro forma with the full consolidation of Anima for the first six months, the contribution on net fees would go up to EUR 1.340 billion. Our growth was mainly in the investment product fees, which grew 12%, which is exactly the growth that we experience in the investment product placement, going from EUR 10.6 billion in six months 2024 to almost EUR 12 billion in six months 2025.
Let me assure that also in July we had investment product fee sales for EUR 2 billion, which is exactly the average of the first six months. Going to the details, upfront fees grew with 27%, running fees 3%, to which we have to add the EUR 140 million coming from the second quarter of Anima consolidation. Very strong results also in other fees, even though it appears to be flat. Just consider that we have almost EUR 30 million less in the first half 2025 coming from the reduction of the fiscal credit fees, the famous Eco Bonus, and the impact of the instant payment. This reduction was completely offset by the other fees, mainly fees from specialized activities, meaning corporate investment bank structure, fine trade finance, which grew from EUR 140 million- EUR 176 million.
Let's have a look at the number with the consolidation of Anima of the indirect customer funding, which grew EUR 3 billion like for like without Anima , from EUR 160 billion- EUR 119 billion, and of course, as I mentioned before, end up to EUR 275 billion consolidating Anima , of which EUR 222 billion of assets under management and EUR 54 billion of assets under custody. It is worth noticing that there is EUR 1 billion growth higher than last year of net flows of assets under management, growing from EUR 300 million of last year to EUR 1.3 billion of this year. The cost income again a good reduction, 2.6%, bringing the cost income down from 48%- 45.2% like for like, 44.6% including Anima . Basically, with a flat contribution from the staff cost.
Let's have in mind that the main impact of the early retirement scheme will appear in the second half of this year, which will amount in a saving of EUR 40 million. Of course, more than offsetting both the new labor contract and also the new hiring, we continue to make very good results also in other administrative expense and D&A, with a total reduction of 7.8%. Cost of risk down to 33 basis points, driven by all the credit management over the life cycle, meaning very strong credit policy in granting new loans, mostly granted by the state. Very effective management throughout the life of the loan with all the attention to the deterioration, possible deterioration of credit, and the early intervention in order to minimize the potential effect of cost of credit.
This brought us to a reduction of 23% total NPE year on year, and excluding the NPEs with state guarantee, we have a reduction of almost 30% year on year. Let's consider on the bottom side on the left of page 19, that the net bad loan excluding state guarantees represents only 0.2% of total new loans. This is basically to make evident that we basically don't have any other net bad loans other than the ones that are guaranteed by the state. On the right side, some figures about ratio cost of risk again down to 33 basis points, default rate better into below 1%- 0.9, good increase in cure rate to 7.5, and also the coverage which appears to grow also on the total NPEs again on the right side.
If you exclude the state guarantee and the NPE guaranteed by state, we increase the coverage of the other bad loans from 73%- 75%, of UTP from 41.4%- 41.9%, and globally it grew to 53% the full coverage of the other loan not guaranteed by the state. Let's give the floor to Edoardo Ginevra, which will guide you through the financial and capital issue.
Thank you, Giuseppe, and good evening everyone. On page 20, we see the contribution of the financial part of our balance sheet both to capital and to financial activities to P&L. In terms of contribution to capital, our negative reserves are down now to EUR 335 million on a net basis thanks to the reduction from the initial level at the beginning of the year of EUR 1 billion, thanks to the active management of our bond portfolio. Similarly, we had a positive trend in unrealized losses on debt securities at amortized cost, which is now almost at EUR 0, at EUR -27 million at the end of June. We worked actively to improve the resilience of the contribution of net interest of our own preferred net interest income, increasing its BPV now at EUR 2 million, EUR 2.1 million of which only EUR 0.8 million coming from Italian government bonds.
Net financial result is now at EUR 72.7 million in the quarter stated, thanks to various factors, among which it's important to notice the dividend we received from Monte dei Paschi , the EUR 97 million, more than EUR 97 million. The active management of our bond portfolio, the reduction in the cost of certificates, which one year ago was EUR 75 million per quarter, now it's near to half that amount at only EUR 41.9 million, thanks to both the reduction in rates and improvement in our credit spread. Page 21 is quite flat. The evolution of the portfolio versus the previous quarter, you may observe that all data are very stable: EUR 46.7 billion the total, EUR 8.5 billion corporate and non-government bonds, EUR 38.2 billion of government bonds, 69% the amortized cost component. Finally, Italian government bonds remaining below 40%, exactly at 38.9%. Liquidity in this environment grew significantly.
Now we have cash plus unencumbered assets at almost EUR 54 billion. These owing to the evolution of eligible assets, especially total direct funding is at EUR 135 billion with EUR 4 billion increase in bonds that we issued that we have in our balance sheet, whose success was facilitated also by the improvement in outstanding with the credit rating agencies. DBRS updated our rating to BBB high in April. Recently, S&P, Moody's, and Fitch, all three of them upgraded our outlook to positive, and it is very important to notice this was after the conclusion, after the withdrawal of the tender offer on our shares. We had no external support, so to speak. SCR is now up at 160%. NSFR at 127%. Net ECB position is slightly below EUR 9 billion. MREL buffer almost at 8%, 792 basis points.
Bearing in mind that we have absorbed also from an MRL perspective the impact of the acquisition of Anima with no harsh compromise and talking about this impact, let's recap the evolution of capital to that very strong 13.3% that we are printing in June. We started in March at 14.76%. Then performance in this quarter, and I'm talking about organic, sorry, recurring performance not accounting for the EUR 200 million of revaluation in the stake of Anima, allowed to bring 85 basis points positive contribution. 72 basis points are the part that is dedicated to the payment to the dividend that is maturing during this quarter. 41 basis points is the contribution of DTAs and Fair Value Other Comprehensive Income reserves.
Apart from other minor points, other minor contributors, our support to the economy, thanks also to the high quality mix of the new lending and to the contribution of state guarantees, is costing only 9 basis points in terms of reduction in capital. Acquisition of Anima gives 189 basis points on top of the 53 already booked in Q1, leading to the total 242 that we've shown in a previous slide. Coming at the end, resulting in the end to 13.32% which is more than 30 basis points above the planned target. MDA and CET1 buffer on the right part of this slide have been reduced following not only the decrease in CET1 ratio but also the systemic risk buffer increase. The phasing of this systemic risk buffer that was introduced one year ago by Bank of Italy was planned to be adopted in two separate installments.
Now the buffer is at 379 basis points. It's well above the planned target. One final point on this slide is that this contribution that I mentioned from DTA and Fair Other Comprehensive Income is an organic capital generation that the bank will continue to materialize in the coming quarters. Until the end of the plan we expect to generate capital with this source for a comfortable 140 basis points. Final remarks, page 25 is an updated presentation of our guidance in terms of profitability and the confirmation of the interim dividend guidance is confirmed on net profit. As far as net profit is concerned at EUR 1.95 billion despite further declining rates. Now we're modeling a full year which is very close to the 2% that is the end state of our strategic plan.
62% of these EUR 1.95 billion have been already achieved in the first half of this year, and to get the remaining 38% we're expecting a mid single digit decline in NII at full funding cost. Including the certificates, double digit increase in net fees and commissions, which will of course enjoy the benefit of the contribution of Anima for the total part of the second half of this year instead of just one quarter as in the first half. A continuation in the reduction in the trend in cost income and a significant reduction in provisions gaining comparison with last year. As already mentioned in the beginning of the presentation, the guidance of the dividend is EUR 700 million compared to the EUR 600 million the previous year EUR 0.46 per share as expected dividend per share.
This to be confirmed or finally defined by the Board in November when also the payment date is expected. An increase of 17% versus the previous year. We are in total at EUR 2.2 billion dividends including these EUR 700 million, which means that we are proceeding at the right pace towards our target of EUR 6 billion until 2027. The dividend yield is a strong 8% following also the very good performance of our share price in the last weeks. The accrued dividend is EUR 800 million to be compared with the EUR 700 million that we were guiding the market towards. Finally, combined ratio is confirmed also end of the year to stay above the 13% which is the minimum target of our plan. Now leaving the floor to Giuseppe.
Yes, just some very brief but I think very new final consideration about what happened in the last nine months that we lived together. Let me try to drive you through what happening on the market to our stock and our shareholders. After Anima announcement, which I think was a Pillarstone in all M&A fast that has been creating in Italy. After our announcement on the public offer of Anima, which has been concluded successfully. As you may remember, I mentioned in the presentation on the business plan that of course the consensus needed always some months to acknowledge the result that we were presenting year by year. The same happened, but more quickly this time.
As you can see, the first figure was the one related to the Anima to our consensus of net profit before immediately after Anima announcement, this was the figure EUR 1.3 billion of net profit for 2027. This was, let's call it the undisturbed figure of which was considered. Immediately after, after the presentation on our business plan first part of 2024, February 2024, the consensus grew to EUR 1.6 billion. After Q1 results again it grew to EUR 1.8 billion and currently is already EUR 1.9 billion o f course this helped a lot. The performance the share price of our stock which grew 70% during the same period, more than the FTSE Italian banks which grew 40%. More important, this gave a material impact to our return. Total shareholder return for our shareholders, which in the last nine months was 91% compared to the lower return of our peers.
This for us is very important because of course we still have some room, we still have 10% between the consensus and our target, which is EUR 2.15 billion. We really believe that this can still add some move to our stock price and to remuneration for our shareholders. Let me conclude with a final page, which is more qualitative, but is very important because in only six months, basically we have already put the base for having the bank that we presented in our business plan. We say that we would have wanted to have a bank well balanced between NII and non NII. A bank which would have overcome 17% in terms, 16% in terms of ROE, we are already at 17%. 21% have ROT target and we're already at 22.6% net income quarter six months, net income of EUR 1.75 million w e are EUR 1.60 million.
The qualitative part is very important for us, which brings our bank to transform, to be transformed from a pure commercial bank to a more capital-light model of bank. You can see that the wealth and asset management plus protection grew from 24% of last year to 35% of this first half year, which is completely already in line with the results that we presented for 2027 specialty banking solution. 9% vis a vis 10%- 15% of the plan target commercial banking activities reducing from 65%- 56% of this first part of the year, compared to with a 50%, 55% of our target plan. This means that we are already really on the right pattern for transforming our bank in a less, less capital intensive, in a less risky kind of bank.
We think that this should bring to some consideration also in terms of multiple to be considered for the net result of our bank. We are really very proud that only six months we're already able to give you these very strong pattern for the future of our bank. Of course, again, we still have a lot to do in terms of completion of the productivity of our product factory. All these things have been done very recently in the last couple of years. We could start only in the final part of 2024 to really manage some of the new joint ventures we did. We are really sure that this number can only improve once all the product factory will be at full stream. Thank you very much for your attention w e will give you some time for the Q and A section and of course very, very happy to answer.
Thank you. This is the Chorus call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press N1 on their touchtone telephone. To remove yourself from the question queue, please press N2. We kindly ask to use your handset when asking questions. Anyone who has a question may press N1 at this time. First question is from Giovanni Razzoli, Deutsche Bank.
Good afternoon to everybody and two questions on my side. The first one is on the CET1 ratio. You mentioned that by 2027 you expected to release 140 basis points of CET1 via DTA and fair value on other comprehensive income. I was wondering whether there are other, you know, managerial actions that activate in order to improve further your CET1 ratio from the already, in my view, strong level of 13.3%. A clarification again on the CET1 ratio you reported in the second quarter because you said that you have accrued EUR 0.8 billion of dividends, but you plan to distribute EUR 0.7 billion. Shall I interpret this as kind of EUR 100 million of capital buffer so that your CET1 ratio would be around 15 basis points higher in the second quarter when compared to the 13.3% that you have reported?
To conclude on the CET1 ratio, if I put all these into the context, I would assume that your CET1 ratio would be closer to 14% rather than above 13%. What are the other moving parts that may instead bring it just above 13%? The last question, the NII, your replicating portfolio has a duration that is more or less half the amount of your competitors. Two of them report a duration that is above four years. Yours is flat at 2.7 years. I was wondering whether you can increase or your target to increase the duration of your replicating portfolio to improve the contribution to NII as other peers are doing or you don't want to stretch your balance sheet in this respect and you don't plan any changes. Thank you.
Okay, so thanks a lot Giovanni, for the two questions plus two questions. Let me start with capital. We continue to be very active on various fronts for improving our capital position. Thanks for noting the point on DTAs and [Federal] Comprehensive income, other managerial actions. We have already implemented two synthetic securitizations in the first quarter of this year and we are making room for implementing a third one potentially in the fourth quarter. We are leaving a little bit on the background optimizations on the composition of our group, especially as far as assets that are currently generating goodwill in Anima who could be transferred from Anima to Banco BPM Vita originating treatment directly at Danish compromise. This is an option we are leaving for the future, but not something that we are currently actively pursuing in the current context.
The accrued dividend as opposed to the EUR 700 million. We are using only simply the criteria that we are smoothing the overall payment of the dividend between the first and the second, the second part so the interim and the final balance. This means correctly that we are prudent in capital calculation in this quarter and we will release the same capital when we pay the second installment at the end of the year. Moving parts of capital. We are happy to be above 13%, but we have to bear in mind that there could be risks from interest rate environment that may generate, so to say, that will require us to be well equipped whenever any evolution in interest rates may materialize. For the time being we are confident that we can. We are very good at the current level of 13.3%.
Let's see what will happen in the future on the duration of the replicating portfolio. On one hand, we are happy that this is limited. We are not locked with this replicating portfolio for a very long period of time. Still we are generating a very satisfactory return on it. Now in area of positive carry after the reduction, the recent reduction in your rival increased duration may have some price because of course there is some yield pickup given the current shape of the curve. At the same time may create some unnecessary rigidities in the overall asset-liability management. We will continue to replace the maturities that we have in the replicating portfolio on the increase in the duration. Unless there are, what we say, material changes in the shape of the curve, I don't believe this is a choice we will adopt.
If may I add just a note on what you envisage the potential 40%. We were said that after Anima we would have been down to below 12%. We showed with Q1 that we're already on track for 20%. We were obliged to change our guidance of the original plan before the non approval of Anima Danish compromise from 14% target or ending part to 13%. As you see, in a couple of quarters we are already above 13%. 13.3% is a very good result. With all the moving parts which are going to increase as we have already done since seven, eight years, we were very able to manage our capital structure, to improve our capital base. Also in the old time of the MP disposal and we never were short of capital. We are a bank which can produce capital and we very soon will be ready maybe to change our guidance also on the business plan.
Thank you.
Next question is from Antonio Reale, Bank of America.
Hi, good afternoon, it's Antonio from Bank of America. I have two questions, please. One on strategy and one on the effects of Golden Power, please. Starting with strategy, I think you've made your standalone case clear and I think you're well on track, if not ahead, when I look at your plan targets, which is why I'd like to ask you, what's next for the bank? You're out of passivity rules now, you've been open to explore opportunities. I think you own a stake in Monte Paschi , you've been open to explore for the commercial partnerships. At the same time, your main shareholder, Crédit Agricole, has rounded up its stake in the bank. My question is, where do you see Banco BPM going from here? What role do you want to play in this Italian M&A wave?
The second question is on Golden Power, which is partly interlinked with my previous question. The conditions imposed by the Italian government on UniCredit have meant that there was a cap to the value your shareholders could extract from a potential improvement of the offer. Now, I'm conscious we are talking about a purely theoretical exercise, as UniCredit has never improved the offer and the bid remained below your share price throughout the offer period. We never got to see the true value potential. The theoretical upside value of the bank could have been capped somehow by Golden Power, which is a serious matter. It creates a precedent and I'm sure your board and you as a management team have considered that. How shall we think about this in the future? Is it going to prevent or limit future M&A opportunities for the bank and, more important, any value creation for your shareholders? I'd like to hear your thoughts. Thank you.
Let's start from the first part. I think I was quite open in saying that we will wait to see after the round one of consolidation, what will be the situation o f course, as you were rightly saying, we have already two things that are quite, let's say, something that can show the way. One is our participation in Monte dei Paschi 9%. Of course, you cannot forget that as well as for Anima offer, also our participation in Monte dei Paschi was before all the public offer round, first round. We will see what happened to Monte dei Paschi after the conclusion of Mediobanca transaction. Second, in the meantime, thanks to the offer from Crédit Agricole, the opportunity to grow from 9.9%- 19.9%. We read yesterday that as they were announcing, they are now 20+ .
We will see how as a shareholder they will ask what they will wanted to do and we will examine in full independence the best for our shareholders. This comes to the second question. Frankly speaking, I never saw Golden Power regulations as a limit for our shareholders. This was announced as a EUR 10 billion M&A when it started. Now we have a bank that is already almost EUR 17 billion worth. No limit for our bank. No limit standalone, no limit for further consolidation. I cannot do anything if somebody was stopped by the fear of Golden Power regulations. It's not the question that you have to do. I think that we have been able to bring the bank to the good word.
As I mentioned before, we still have a couple of hundred million to recover in order to have the value of the bank until the next update of the plan. Also, the capital generation is proving that maybe we can have some more for our shareholders. I don't think really that Golden Power regulations can impact. In any case, it's not something that we can decide. What to say, in Germany is not Golden Power, Spain is not Golden Power. In Portugal is not Golden Power. It's something else with which the bank has to work with. I think it is the new normal.
Thank you.
Next question is from N oemi Peruch, Mediobanca.
Good evening. Thank you for taking my questions. I have two. The first one is on your target. You have reported EUR 1.2 billion of net profit as of H1 and your target is at EUR 1.95 billion. This implies clearly a lower run rate going forward, even excluding one-off. I was wondering on which lines you feel you have been particularly conservative. My second question is on SRPs. You have been pretty, pretty active in this market, especially in Q1 this year after the denial of the Danish compromise squared. I was wondering if you saw part of it as no recurrence, that is, if you are not going to roll over part of it in the future and if so, how much it is in terms of basis points. Thank you.
Okay, let me handle Noemi, the first part of the first question. Then I will give it to Edoardo for the second question. No, it's not that we are conservative. I would say, I think we are assuming the same pace of growth of the second half as well as the other bank who preceded us in the announcement of the results. Of course, first part of the year is always the best one. We had also many one-off. We gave our guidance before. We don't think that just in one quarter we can change our guidance. Of course, as Edoardo was saying, there are some indication for the opportunity that we have. The most important, I would say, do not depend really on us. We have already considered another cut to EUR 175. Let's say starting from the end of Q3.
If this won't happen, we can have a better NII for commission. I think the growth that we experience is massive and we are replicating the same growth of Q2 over Q3 and Q4, which normally are much harder because of August and December. Cost of risk still have possibly some room, but we cannot avoid to think to the geopolitical assumptions that are now still present in Europe. There is a degree of prudence, but there is a lot of commitment also in some other line like commission. We are trying to make something quite comfortable for the market to believe in. If there will be some progress in Q3, we will communicate. Our expectation is already to always to beat the guidance. It's not a target, it's a guidance. Edoardo, do you want to.
No, no. I just wanted to stress a little bit more the concept of the seasonality. It's not that the pace in the second half of the year is then the best estimator for the pace of the following years until the end of the plan. There are some areas of the P&L where in the first half of the year you produce a better result. The commission is the most important example. For example, in trading we account for the dividend of MPS , which is EUR 100 million almost net. This is something that happens once a year according to the plan of the bank. This is confirmed for the years to come, or even has some potential to improve on SRT. Sorry, the question on SRT. As you said correctly, we are very active.
I believe that in our roster of banks we are the most active in Italy in this instrument. We are comparable also with the larger and international players. We have printed two deals in March. We are planning a new one, as I said answering the previous question, in the fourth quarter. The pace for us will be always to at least replace the amortizing deals with the new ones, so that we preserve the capital optimization lever in the area where it is, of course assuming that the conditions in the market in terms of cost of equity do not worsen significantly from the current level. We are in a comfortable single digit area in terms of cost of capital when we close these deals. We've been always in this area in the last two years or so and we observe that the market seems to continue to be conducive for similar conditions to be replicated in the near future.
Thank you. Next question is from Ignacio Ularqui, BNP Paribas Exane.
Thanks very much for the presentation. I have two questions. The first one is looking to blend in growth and how do you see the evolution of the loan book into the second half? After a very strong first half, probably a bit overshadowed by financial institutions. How should we think about that and what would be the impact of that in asset-liability management vehicles? If there is any color that you can share with us. The second question is on the commercial spread. I mean leaving aside the incremental cut that you are forecasting, should we take the current natural issue as the kind of the right one to think about your commercial spread or do you still see incremental downside from here? Thank you.
Thank you for long road. We think we have done very good progress in the first part of the year, not only in the volume but also in the quality. As I mentioned before, we have increased mortgages, we have increased guaranteed transactions, so we are very happy with this kind of model. This of course may bring someone 2 basis points less lower than normal, but you know that having guaranteed transactions is much better in terms of ROT. We don't see, of course, what can I say? After the consolidation, I think there will be maybe a bit less competition. We are ready to take advantage from that. We are luckily enough master of our decisions, so we can still continue to serve very well our client, our places. We know very well our client.
I have to say that the successful conclusion of this potential M&A has been very much willing warranted by our client, and so everybody is much closer to the bank. I think we can only make advantage out of that. In terms of commercial spread, no, I don't think there is any impact. You know that we have already factorized the reduction in terms of cost of deposit in our forecast, but in terms of loans, of course, we don't have any further reduction expectation because when interest rates are cut, you can make the spread a bit more aggressive. Both because we grew at a good volume in H1 and because we think we have already a backlog of good transactions to be already granted starting from September, we think we can have a good part of the year also in H2.
Thank you very much.
Next question is from Hugo Cruz, KBW.
Hi, thank you for the time. Two questions, one on NII. Can you explain why the NII grew quarter-on-quarter on an underlying basis? Was it volumes? Was it loan spreads? Just give a bit more color would be helpful. You mentioned a few times updating the business plan targets. Do you have any date in mind to do that? Thank you.
Sorry. The second is review the targets.
Yes. When might you.
No, we don't have currently a plan. We don't believe we don't have in our program to review the targets of the plan. The plan includes already Anima. This is not in the rather currently we are happy with our EUR 2.15 billion and very much focused on pursuing it in the foreseeable future. As far as NII is concerned, yes, after deducting the one-off we have a growth of around 1%. This is due to the fact that we have reduced quarter on quarter our cost of funding, leveraging on the decreasing trend in the market reflected especially in the indexed deposits. Volumes did not contribute significantly. Some repricing and positive effect of repricing in the bond portfolio, but overall, I mean stability of it's a stable environment. It's been a stable environment where we were able to counterbalance the reduction in rates on loans, on index loans, with ALM and with the process.
If I may add something on, maybe I was guilty for giving you the idea of revising the business plan when I was talking about the Common Equity ratio. I say that of course we were obliged to cut the landing point 14% of common to 13%. Now we are really 13.3%. Let me say that we think that with our new business model we can save capital. We can very soon come back and maybe give some more guidance for the capital for the net profit. I don't think we can move our target plan also because implicitly we have already increased our target. You have to consider that in February we were considering an Euribor at 2.25% and now it is 1.75%, and again with more common negative one to be deployed rather than the 13% threshold that we indicate.
Very, very helpful. Thank you.
Next question is from Andrea Lisi, Equita.
Good evening. Thank you for taking my question. The first one is if you can p rovide us an update on the remaining stake in Anima of 10%. What would you do with this remaining stake? The second question is on the net f lows of AUM that were quite strong i n the first half of the year. Obviously, the market environment was supportive, and these supported as well the growth in fees, which actions do you mind to take in play to put in place to make this trend sustainable over time? To also sustain the growth of fees. Thank you.
Thank you Lisi. Let's say that for the 10%, let me be a bit conservative in saying that of course this is a listed company. I will not announce anything other than say that we will consider all the options and we got free of the standalone practice only a few days ago. We have to consider the integration of Anima. We can be more vocal maybe the next time we will see each other, I mean the Q3 for the other, and of course market. This is the net flow, so the market doesn't account for the growth of EUR 1.3 billion. If you may, we were meaning the market condition for sure. This helped, but also last year we had a very good market condition because meanwhile interest rate go down, it is a good opportunity to invest in asset under management.
We have been very much focusing on this. We are one of the banks which has the lower contribution related to the total deposit base in assets under management, so this is something that you have to work very hard. We are starting to see some good results, but still I think the best is yet to come because we have a lot of deposits growing quarter by quarter, and of course a good part of it can be switched into market assets under management.
Thank you.
Mr. Giuseppe, there are no more questions registered at this time.
Okay, so thank you. It's time to have some holiday for everybody. Tomorrow we will have some more one to one or too many. Very happy to answer to your further question, and if we don't see each other, have a good holidays and see you in September. Bye bye. Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.