Good day, thank you for standing by. Welcome to Banca Mediolanum Q1 2026 results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Alessandra Lanzone, Head of Investor Relations. Please go ahead, madam.
Thank you. Hello, everyone, and welcome to Banca Mediolanum's conference call. Thanks for joining us today. We are only at the beginning of the year, but Q1 offers already a meaningful first read on a very active start to 2026. The strength of our business, the drivers behind the numbers, and the trends of our performance. For the Q&A session at the end, please ask your question in the language of the line you're calling from. As usual, we respond in Italian, but with a simultaneous translation into English available. With that, I'm pleased to hand this over to our CEO, Massimo Doris, joined by our CFO, Angelo Lietti. Massimo, over to you.
Thank you, Alessandra. Very good afternoon to all of you. We started 2026 in a context that was already complex, shaped by geopolitics, shifting rates expectations, and policy developments. As the quarter progressed, market volatility increased, particularly from March onwards. The broader point is that volatility is no longer an exception. It has become part of the baseline we operate in. In this environment, the key question is not whether uncertainty is present, but how customers respond to it.
So far, the evidence is clear. Despite market volatility, we are not seeing our customers stepping back from the market. Flows continue and customers remain engaged, more selective perhaps, but still participating. This is an important signal. It confirms a pattern we have seen repeatedly and consistently over time, not by chance, but by design. It is part of our trademark.
In more uncertain phases, our model tends to show its strength. When customers need guidance, the value of advice becomes more visible, and the difference between a transactional approach and a relationship-based model becomes clearer. At the same time, the market's focus is evolving. The debate is moving away from rates alone and toward the quality of flows, the mix between managed and administered assets, and the sustainability of NII as the rate environment adjusts. The question we are addressing today is not simply how the quarter looks, but what it tells us about the consistency and quality of our growth going forward.
With that in mind, let's move into the numbers. I begin with the economic and financial highlights on slide four. The headline news is that we started 2026 exactly as we ended 2025, with strong momentum across the board.
Let me walk you through the numbers that matter most in slide four. I think you'll see why we are generally excited about this quarter. I start with the bottom line. Net income in the first quarter came in at EUR 276 million, up 13% year-on-year. The point is the underlying quality of that growth, which is coming from the core business, while non-recurring items moved in the opposite direction. In fact, core revenues were notably strong. Contribution margin reached EUR 582 million, up 18%. Operating margin, perhaps the most telling figure, came in at EUR 350 million, improving 25% versus the prior year. This quarter offered a particularly clear example of the operating leverage now built into our model, with revenues growing materially faster than costs.
Of course, a favorable NII comparison certainly helped, but it was also the result of the discipline we have been building over time. Results were supported by net commission income growth, up 12% to EUR 354 million, helped by solid management fees, the recurring backbone of our business model, up 9%. This increase in management fees needs to be read in context. The market correction in March had a visible impact on our managed assets given their significant equity component, even though net inflows remained very strong.
At the same time, the strength of January and February, both in terms of inflows and market appreciation, allowed recurring fees for the quarter to remain broadly in line with Q4. At the end of the day, this tells us the quality of inflows is strong. Our customers keep choosing managed products.
Net commission income growth was also boosted by banking service fees, which contributed substantially, surging 66%, as we'll touch on later. Net interest income stands out as the strongest swing, this is not a rates did the work quarter. NII came in at EUR 236 million, up 31%, despite a markedly different rate environment. What supported the increase was a stronger starting base. We had deliberately shifted our funding mix towards deposits, which we couldn't do without our consistent ability to attract them. This gave us access to a cheaper and more durable funding base. Don't forget that we also benefited from a lower retail cost of funding.
In Q1 last year, the cost base was affected by the combined impact of two high-volume time deposit promo offers, both carrying a relatively high rate. One at 5% launched in autumn 2024, and one at 4% at the beginning of 2025. This year, by contrast, the two campaigns impacting Q1 were both priced at 3%, making our funding cost much lighter. The expansion of the credit book in previous periods did the rest.
Our NII growth is driven less by rates themselves and more by the structural work we manage on the balance sheet, including our decision to front-load part of the government bond portfolio during the quarter. Keep in mind that the interest rate increase that was implemented in the quarter will only start to be reflecting our numbers from Q2. This all lead us to revise our guidance for the year based on updated assumptions, as we'll see later.
Finally, non-recurring items were down 42% from EUR 51 million to EUR 29 million. In Q1 last year, this line item benefited from a higher contribution from performance fees generated by our Italy-based funds, as well as from the positive fair value impact of our trading portfolio. This quarter, the contribution from performance fees was more limited, while fair value had a negative impact. A quick word now on the ratios. The cost-income ratio dropped to 34.8% from 37.6% of the full year 2025. This was helped by the usual Q1 seasonality and G&A costs, which tend to be lower together with strong business momentum.
Importantly, this was achieved while continuing to invest where it truly matters for the future of the business, in digital capabilities, in the effectiveness of our network, and the overall quality of the customer experience without compromising cost discipline.
The ratio of acquisition costs over gross commission ticked up slightly to 35.2% from 34.8% for the entire 2025, driven mainly by a timing mismatch between contest related costs and revenues. Finally, on credit. Cost of risk remained contained at 19 basis points for the quarter, in line with our expectations. Overall, this quarter confirmed that the engine we have been building continues to deliver and that our growth is structural, not cyclical. We are in a very good place.
Slide eight gives a closer look at the remaining income statement lines with a few points worth highlighting. Banking service fees is certainly the standout figure, jumping to EUR 80.5 million, up 66%. This growth was driven by particularly strong certificate sales, almost 3x higher than in Q1 last year, which were also helped by the strong market backdrop.
Many autocallable certificates reached their trigger levels earlier than expected and were redeemed ahead of schedule. Customer received attractive coupons and often reinvested the proceeds into new certificates, generating additional upfront fees. On top of this, there was also a positive price effect, thanks to a longer average maturity profile of the new issuances. Impairment on loans show a sharp percentage increase from EUR 1.4 million to EUR 6.6 million, which however, is within the range of the previous quarters. It is worth remembering that Q1 2025 was particularly low, partly because we benefited from the adoption of a new model for calculating expected losses on retail exposures.
Turning to slide 5, let me walk you through the business results for the quarter. Commercial activity remained robust, with total net inflows at EUR 3.34 billion, despite being down 11% against a very strong comparison base last year. In particular, managed asset inflows were positive at EUR 1.87 billion, only a mid-single digit below last year's record level. Which we see as a very resilient outcome given the different market backdrop.
Last year benefited from exceptionally supportive conditions from the outset, while this year was marked by volatility much earlier on. Even so, the quality of our inflows remained strong, even more so in March, showing that our customers continued to invest and put money to work rather than simply stay on the sidelines, even as uncertainty increased during the quarter. The same positive trend continued into April.
As shown on slide 34, net inflows into managed asset reached EUR 831 million in the month, while total net inflows came in at almost EUR 1.3 billion. This brings the first four months of the year to a very strong level, with EUR 2.7 billion into managed asset flows. The year-on-year comparison is clearly demanding, as April 2025 was our best month ever, but the absolute level of inflows remain very solid and confirms the continued strength of our commercial activity. The impact on the market downturn on assets in Q1 was naturally quite visible for us, reflecting the higher equity content of our customers' portfolios compared with the industry average.
Total assets ended March at EUR 154.37 billion, 1% lower than at the start of the year, with the gap already recovered by the end of April. To the contrary, the credit book expanded, ending the quarter 1.4% higher than at year end, at EUR 19.25 billion. Credit book growth was supported by higher loan originations, with loans granted up 12% year-on-year and lending just shy of EUR 1 billion for the period. General insurance also had a good quarter, with gross premiums up 14% to EUR 60.47 million. For us, this is not just an add-on business. It is part of how we help customers protect their wealth and earning capacity. Growth came particularly from standalone policies, up 16%.
On slide six, you can see another strong quarter in terms of customer growth. We added almost 60,000 new customers, taking the total close to 2.1 million and lifting the customer base by 2% from year end. Our group Family Banker network kept step with this growth, also up 2%, putting us within touching distance of 7,000 Family Bankers, a milestone we actually reached in April. Our Intelligent Investment Strategy continues to gain traction. We now have over EUR 5.5 billion invested in money market funds with a planned and gradual switch into equities over an average horizon of some 3.5 years.
Since the beginning of the year, around EUR 500 million of new money has been added to the service, bringing the total up around 10% and reinforcing the pipeline of assets that will progressively move into equity solutions over time. In addition, we can see a further EUR 3.4 billion set to move into mutual funds over the next 12 months, as shown in the last two lines of slide six. This includes well over EUR 1 billion from Double Chance deposits, up 27% since the beginning of the year, and more than EUR 2.3 billion from installment plan flows, which continue to build progressively and provide good visibility on future managed asset inflows. The rapid buildup in Double Chance deposits was no coincidence.
When geopolitical tensions triggered a sharp increase in market volatility at the beginning of March, we put Double Chance back in the spotlight, refocusing customers with available liquidity on a solution that was perfectly suited to that moment. In fact, this offers a way to take advantage of a particularly uncertain phase through a gradual entry mechanism, while adding to the pool of assets set to move into equity funds over the coming months.
Let's move on to another key pillar of our model, balance sheet ratios, as shown on slide seven. Our CET1 ratio remained extremely robust at 22.8%, without including the contribution from the period's earnings. The MREL ratio increased versus year end, as it reflects the EUR 500 million bond issued in January, compared with a EUR 300 million bond included in the year-end figure.
The leverage ratio was slightly lower than at year end, moving from 9.5% to 8.3%. Mainly reflecting the temporary increase in overall balance sheet exposures. Let's take a moment to focus on our network in Italy, which now stands at 5,294 Family Bankers at the end of March. The start of 2026 was particularly strong. We saw an 87% increase in the number of professionals choosing Banca Mediolanum, with 176 new financial advisors entering the network in the first quarter alone. Of these, 117 were senior profiles and 59 were junior advisors, namely the Banker Consultants for our Next program. Women represented around 26% of total new recruits.
The senior profiles are especially worth mentioning. Almost half of them came from the banking and insurance sector, where they had worked as private bankers, relationship managers, or branch managers. This confirms a trend we have been seeing for some time. Experienced professionals are increasingly looking beyond the traditional banking model and moving toward an advisory model that gives them more room to build long-term customer relationships.
This is where our positioning makes a difference. Banca Mediolanum is not a bank that simply has a network of advisors. It is a model built around Family Bankers. The structure, the tools, the training, and the product platform are all designed to help them support individuals and families across their financial lives. That is why the network remains not only a growth engine for the group, but also an increasingly attractive destination for high-quality professionals.
At the same time, our Banker Consultant program continues to be one of the most important ways in which we invest in the future of the network. It is designed for high-caliber graduates who begin with a six-month executive master at our corporate university, obtain their financial advisor certification, and then start their professional journey alongside a senior private banker or wealth advisor, working with that advisor's existing customer base. This gives them early exposure to real customer relationships, but within a structured and high-qualified environment where they can build experience, credibility, and seniority alongside an established professional.
What makes our program distinctive is precisely this combination of structured training and early field experience with a strong mentoring component. Their remuneration is covered by the senior banker, reinforcing the mentoring relationship and supporting the young professionals' development within the network.
The figures on slide 37 show how successful the project has become. At the end of April, 676 Banker Consultants were already active in the network, with a further 250 currently in training. On the back of this pipeline, we now expect to exceed 900 Banker Consultants by the end of 2026. We are now seeing clear evidence of the impact of this strategic initiative. Among the 830 senior bankers involved, those who have worked with a Banker Consultant for at least 12 months have recorded a material increase in productivity. They were already ahead of their peers at the starting point, and that lead has widened further. The advantage is particularly visible in managed asset inflows, where it has widened from 3% to 33%.
In other words, it is now 11x the initial level. The gap has also increased in loans from 27% to 39%, equivalent to a 12- percentage point increase, and has more than doubled in both protection policies from 28% to 60% and customer acquisition from 40% to 81%. The trend is positive and the pace is improving. Our network is becoming increasingly solid while productivity still offers further upside.
Let's turn to Spain on slide 31. Q1 showed a slightly different picture versus year-end. The economics were stronger, with the scale we have been building starting to come through more clearly in the P&L. At the same time, commercial activity normalized from the exceptional pace we saw last year, mainly reflecting the more volatile context and more cautious investor behavior.
The improved results we saw in Q1 confirm that the platform is gaining substance, and the investments made over the past quarters have created a broader and stronger base for future growth. Spain, in fact, remains a very exciting growth opportunity for us, with significant room to scale further. Let's look at the main highlights. Operating margin reached EUR 16.3 million, a 4% increase year-on-year, while net income stood at EUR 15.3 million, 8% higher. Total assets were broadly stable with only a marginal increase versus year-end to just over EUR 15.5 billion, with managed assets in line at EUR 11.9 billion. Total net inflows in the period were positive at EUR 590 million, while managed asset flows came to EUR 380 million.
Turning to lending, the credit book continued to grow, reaching EUR 1.84 billion, up 5% versus year end. Meanwhile, the Family Banker network grew by 1%, reaching a total of 1,670. The key point here is a step up in productivity over the past five years, mirroring what we've delivered in Italy. Average assets rose from EUR 5.5 million in 2020 to EUR 9.4 million today. Finally, our customer base in Spain expanded to 292,200, marking a 2% increase versus the end of the year.
Let me also give you a brief update on our Grandi Patrimoni program, the key initiative we are driving to strengthen our position at the top end of the market, as illustrated in slide number 73.
As you know, the program was launched to raise the service standard for customers with more than EUR 2 million in assets, offering a high-end advisory service designed to address complex needs through a strategic, personalized, and long-term approach. It combines fee-based advisory models, a dedicated product set, tailored investment banking and fiduciary services, and an enhanced coverage model through wealth advisor teams. The important point is that the program is now moving from launch phase to execution, and we are already seeing good traction. In the end of April, we had over 4,200 customers in the over EUR 2 million segment, up 6% versus year end and 28% above the program's initial baseline at the beginning of 2025.
Total assets in this segment reached approximately EUR 20 billion, up 5% despite the market volatility seen during the quarter, and 27% above the starting level of the program. What matters here is not only the growth in the number of high net worth customers, but the quality of the relationship we are building with them. More tailored advisory, greater use of specialized expertise, and a clearer opportunity to increase our share of wallet at the top end of the market. This is an area where our brand, our strongest private bankers, and the enhanced coverage model can make a real difference, and we will continue to scale it during the year. Finally, we are accelerating in the development of our AI program, not as a standalone technology initiative, but as a practical enabler of our business model.
The focus is threefold: improving operational efficiency, equipping our Family Bankers with better tools to serve customers, and developing end-user solutions that make the customer experience simpler, faster, and more personalized. To date, we have around 100 initiatives currently in the testing phase, 13 projects already released, and more than 1,800 active AI agents.
Well, to wrap up, Q1 was a strong and reassuring start of the year. It was not a quiet quarter. Markets became more volatile, uncertainty increased, and the comparison base was demanding. The market environment changed quickly, but our direction did not. We continued to deliver across the main business lines, to grow our customer base and our network, and to make further progress on the strategic initiatives we have been building. While we remain mindful of the external environment, the route is clear.
The first quarter confirmed the resilience of our model and gives us further confidence that even in a more complex context, our objectives for the year remain well within reach. With that in mind, let me now turn to our 2026 guidance and to the targets we are working towards. We expect net inflows into managed assets to be around EUR 9 billion, assuming normal market conditions. We now see net interest income up approximately 15% versus 2025. We are targeting a cost-income ratio of around 38%. We expect cost of risk to be around 20 basis points, and we intend to increase dividend per share versus the EUR 0.80 base dividend.
Q1 was a strong first step in that direction. Our job now is to keep executing with discipline and consistency, because making progress look steady is exactly what a resilient model is designed to do. Thank you for your time, and as always, we appreciate your continued support.
Thank you, Massimo. We can now open the Q&A session. Go.
We can open the Q&A session. If you want to ask a question, press star one one on your telephone keypad and wait for hearing your name to start asking the question. Star one one if you want to ask a question. First question from the line of Enrico Bolzoni, JP Morgan.
Apologies. I was speaking English instead of Italian. You have revised the NII guidance. What are the assumptions underpinning this NII in terms of rates and volumes? If I take the first quarter information, I end up with a result which is higher than 15%. Obviously, you are expecting increasing rates. Second question, certificates, a very good result in the first quarter. What can we expect in the next few quarters in terms of maturities, and also specifically with the reference to Q2 maturities?
Third question, equity markets were extremely volatile. I guess the Double Chance strategies moved assets from fixed income to equities and vice versa. What are we to expect in terms of margin evolution for the rest of the year? Thank you.
NII, obviously, we cannot just extrapolate the first quarter's margin and multiply it by three, by four. As I said earlier, this 31%, which we see, is due to two factors mainly. First factor is an increase in volumes, and this is obviously something that hopefully will continue on steadily for the rest of the year, because our banking book is in excess of EUR 19 billion, so it keeps growing. On the other side, we had a funding cost, which was lower.
With a specific reference to time deposits-
The first quarter of 2025 was impacted by the offer, promotional offer of Q4 2024, because it was a six-month time deposit. Clients started opening up these time deposits in, say, September, October, and this ended up impacting 2025. The promotional rate was 5%, plus in 2025, we launched a new promotional offer at 4%. The first quarter was impacted by both the 5% promotional rate offered in 2025 and the 4% promotional rate offered in 2024. In 2026, we were impacted by 3%, the 3% promotional rate offered in Q4 2025 and the 3% promotional rate offered in Q1 2026.
A simple average would point to a 1.5% difference in terms of retail funding cost. Since we actually managed to have as much as EUR 1 billion worth of new money, this was quite impactful. We have to add to this Double Chance offers, because last year rates declined. We have seen lower offers in the first quarter and higher in the second. These things had a certain impact. This will not happen in the following quarters. NII remained strong. That is why what we expect is an 15% for NII. This is the guidance, but of course, we have to see what happens in terms of interest rates evolution. This is our guidance.
We decided to front load some bonds that were bought by the treasury. These purchases impacted March, happened in March and impacted the first quarter. This is it. As far as rates are concerned, Angelo, why don't you take the floor?
Well, we expect rates to raise to increase in the second part of the years. In the second half of the year, compared to the first quarter, we expect a higher cost of funding, we will not report the same absolute values that we have reported in the first quarters. As far as certificates are concerned, EUR 800 million worth of certificates will expire between now and the end of the year, autocallable certificates included. Barring a market crash, these are the maturities.
Sorry, I don't remember the last question. Can somebody help me? Of course, yes. You had the question about margins. We reported a half a billion EUR IIS increase, so assets that were generated thanks to our IIS strategy. Flows are still good. If we look at mutual funds and units, we see that the lion's share in terms of inflows is either into fixed income market or money market instruments. You know, there was a lot of volatility when the conflict broke out in the Middle East. Customers, they decided to invest in equities for the longer term, were persuaded by bankers to invest in equities via the Intelligent Strategy or via Double Chance.
If I use IIS, the starting point is money market, whose management fees are 20 basis points. This, of course, has an impact on margins, because we have EUR 5.5 billion, and that would have a negative impact because the margin is extremely thin. If we look at what the market is doing, if we compare ourselves to the market and competitors, their inflows are definitely lower. Plus these assets are automatically transferred into equity markets. Clients cannot change their mind, you know. This is an automatic system, the system would gradually invest in the equity market. Temporarily, we will report a thinner margin because of the money market rates, it's a system that guarantees that the customer will remain extremely loyal to us and will continue investing.
Because, you know, the customer will not be emotionally impacted by market swings. They will see good results by investing gradually, and they will continue investing with us.
Thank you, Enrico. Next question.
Sure. Next question comes from Elena Perini, Intesa Sanpaolo. Please, madam, go ahead.
Thank you. Thank you, good afternoon, everybody. I actually have three questions for you. First of all, can you just provide a sort of outlook or a guidance or on NII for 2027? The second question refers to your performance fees. Can you tell us the performance fees you have accrued year to date, considering the pickup there has been in the last 40 days and the recovery of the markets in the last 40 days? Then the third question is a confirmation with respect to certificate maturities.
I believe autocallable are included, we might expect banking fees to remain fairly high also in the coming quarters. NII guidance for 2027, we expect it to be on the rise between 5 and 8%. Second question, possible performance fees that we might have included. We are checking it out, maybe we can answer to the third question.
Ask the question.
Yes, that on certificates. Clearly, if markets will keep on performing this way, we are going to have quite a few autocallable certificates being triggered because of course maturities not change with market performance.
If I may, while we're waiting, I may ask another question. We haven't been talking about regulation that much as of late. Any news, or are the issues always the same? With respect to the issues on the table, are there any evolutions or changes?
No, not really. No news on the front of regulations. We are actually hearing a little bit more on the Savings and Investment Union, whereas nothing is being said about RIS.
Thank you.
Next question, Giovanni Razzoli, Deutsche Bank.
Good afternoon, everyone. Let me get back to slide six please, where you showed the growth in the accumulation, deaccumulation products such as Double Chance. I mean, this family of product is really extremely successful. You have achieved almost EUR 7 billion-EUR 8 billion, i.e., 6% of your total assets. I believe that by year-end, that amount will be a lot higher. Earlier you said there is a 2- percentage point commission difference between these products and others. Currently you have EUR 150 million worth of commissions embedded into those products. They will continue on. Could this type of product be considered like a sort of an insurance policy that Mediolanum is using to protect itself when market goes down?
Also, the underlying funds are Irish funds that enjoy a more favorable tax regime. Certificates, how many did you sell in the first quarter? How many are autocallables, and what are the associated commissions?
Well, the insurance policy, as you refer, as you said, is, I like the term. It's an insurance policy that makes sure we receive a steady flow, regardless of how markets are performing. We are talking about almost EUR 9 billion, not EUR 7 billion or EUR 8 billion, EUR 9 billion. If you look at IIS, these are all, you know, money market funds that really don't have an interesting margin for us. This will be switched to equity markets where we would have 250+ basis points, plus performance fees. The margin is a lot fatter.
As far as Double Chance is concerned, we go from deposits on which we pay an interest rate to customers, so we have no margin there, and we would shift the money to equity funds. We could use Double Chance for fixed income funds as well, but they represent a small percentage, I think as low as 20% only. Normally we use Double Chance for equity markets. As far as the accumulation, or installment plan, there, you know, we use banking account money. Actually, we do have a margin on banking account because banking accounts don't pay any interest to customers. These bank deposits are increased when the client's wages are deposited. If they stay in the deposit, the customer may spend the money.
Instead, if this money is, you know, shifted, is switched into e quities into other forms of investment. This would generate a good margin for us, but also a good return for customers. If customers don't have a good return, they will leave us. We cannot just focus on margins. The bank must enjoy a certain advantage. There must be an advantage that can be given to customers as well. We always talk about the three Cs rule. Every time we issue or we design a new product or promote a commercial action, we always ask ourselves whether that product generates an advantage for the customer, yes or no. If it generates an advantage for the Family Banker, yes or not. I'm sorry, it's not the three Cs, but the three yes.
Whether that generates an advantage for the bank. Of course, the advantage for the customer is the most important one. As far as certificates are concerned, EUR 669 million were sold in the first quarter, EUR 335 million of which are autocallable. As far as commissions go, normally certificates have a maturity of about four to six years, and the average commission is 6.4%. Getting back to what Elena Perini was saying earlier, potentially performance fees are worth about EUR 55 million on top of those that have already been posted. So, EUR 35 million have already been booked, and EUR 55 million are the potential performance fees.
Thank you, Giovanni. Next question.
There are no further questions from the Italian line, so let me hand it over to my colleague for the English line. Thank you.
Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question from the line of Hubert Lam from Bank of America. Please go ahead.
Hi. Thanks for taking my questions. I just got one. Can you talk about your flows and how much of it is coming from third-party funds, and possibly even ETFs, compared to your own Mediolanum funds? You see a growing proportion of your flows coming from third party going forward. Thank you.
Just a second, we are just collecting all the information, and we have to make a distinction between Mediolanum My Life and the other funds. Just bear with me. I'm just waiting for an answer. Yeah. Well, just give me the total.
Hubert Lam, are there any other questions you wanted to ask to Mr. Doris while we're waiting?
No, not at the moment. Yeah, I got one other question. Don't mind. It's on the cost-income ratio. I know that you're still targeting around 38% for the year, but Q1 was better than that. I think it's closer to 35%. Just wondering why you think 38% is still the target for the year when you've done better so far this year?
Right. In the first quarter, generally, costs are slightly lower, then they tend to increase over time in the remainder of the year. This is why we don't believe it is possible to keep the same cost-income ratio as the first quarter. We said approximately 38%. It could be slightly above or slightly lower, but it's a matter of the seasonality of costs. In April, EUR 350 million net inflows in third-party funds. EUR 350 million out of EUR 2.275 billion. This is the inflows in funds and unit-linked funds in the first three months or four months rather. Consider that part of these EUR 350 million I was mentioning, most of it generally ends up in the Mediolanum My Life.
No, sorry. These are sold or distributed directly. It's EUR 350 million out of EUR 2.275 billion.
Thank you, Hubert.
Sorry, he asked about ETFs as well, actually.
Actually, there's very little in ETFs. ETF that are bought on spot are the ETFs that our clients buy directly on our trading online platform. There is only a brokerage fee and that's it. The advanced advisory program has just been launched. In this case, if within the asset allocation, the Family Banker includes the securities or ETFs, then we charge an advisory fee, an additional advisory fee. This means that you don't just have the transaction fee in terms of revenue, but also the advisory fee. We just launched it. We're talking about a mere 40 contracts, so we still don't have a volume or enough volume to make any kind of statistics that can make any sense.
We have to wait for the end of the year, waiting for these contracts to pile up and reach a meaningful number so as to get an idea of the possible inflows coming from this advanced advisory program that is going then to flow into assets under administration. How much of this and that is going to be advised is going to be in securities or in ETFs. At that point, we will understand the fee that is going to be applied. Depending on the size of the client and the discount that can be granted by the banker, we have a very wide range.
Thank you, Hubert. Any other questions from the English line?
Thank you. There are no further questions on the English line. I would like to hand back over to the Italian.
Next question. Next question, Adele Palamà, UBS. Please go ahead.
Good evening. I have two questions. One is the AUM guidance. You talked about AUM flows of EUR 9 billion, in line with what you reported for 2025. Actually, if I annualize what you have reported up to now as AUM flows, that's not the number that comes up. Do you expect inflows to accelerate in the second part of the year? I imagine that this is tied to Double Chance and IIS strategies. Second question is on NII. You said that in the second part of the year you expect the cost of funding to increase. The assumption is based on an increase in interest rates, as I said, in the second half. How many promos do you expect to launch in 2026?
As far as NII is concerned, but actually what I am referring to is the retail book's gross yield. In the third and fourth quarter of 2025, the gross interest yield of the retail book has increased by 16 basis points, and then it remained flat or stable between the fourth quarter of 2025 and the first quarter of 2026. Can you give me some color with respect to this aspect? How do you expect this yield to move over the year? Would you expect it to remain stable, or do you think it is going to increase, depending on the interest rates and, is there anything impacting this yield in particular?
Let's start with the EUR 9 billion worth of inflows. If we multiply it by three, the EUR 9 billion in the four months, you don't get to that amount. Why do we expect to get to this number? Because we are going to launch products and contests that we believe are going to provide a momentum to inflows to really support inflows. As of the end of May and June, we expect to report an increase in the inflows of assets under management. Thanks to these initiatives, we believe that we are going to have an increase in the cost of funding in the second quarter.
This is why we don't believe that NII is going to increase by 31%, as it was the case in the first quarter. There is going to be a peak in the second quarter. It's going to stabilize in the third and fourth quarter. As to the investment yield, whether they are mortgages or treasury notes, treasury securities, mortgages are tied to the three-month EURIBOR. As of the 1st of April, we had an increase in the EURIBOR, almost all mortgages are floating rate mortgages and are tied to the three-month EURIBOR rate
For three months, they will be based upon the EURIBOR rate at the end of March, and then they are going to be based on the EURIBOR rate of the end of June and so on and so forth. Depending on the level of the rate, we are going to generate a certain revenue. With respect to treasury notes, the or floating rates are tied to the six-month EURIBOR. Only 32%, because 67% are fixed rate. There they are, and it's fixed. One-third of these securities are tied to the six-month EURIBOR rate. You were asking about promos. We are now going to launch a contest in order to support inflows into managed assets, and we're going to talk about this during our convention to our bankers
In the last four or five years, we generally launch two promos per year, granting interesting rates on six-month deposits. We did the last one well, the latest one was in October. As it was the case in the last few years, we're going to launch other promos. Here you see the various offers. You see first quarter and third quarter 2023, first quarter and third quarter 2024, and so on and so forth, with the various rates offered. The inflows that went into these six-month deposits, and the number of customers who invested in these deposits, they are rather new clients or existing customers that deposited more money.
In the last column, which is most important, because the objective of these time deposits is to turn most of that money into managed assets. Our target is to turn at least 70% of time deposits into managed assets. You see that all of them basically hit the target. The promo launched in the third quarter of 2025, the first start to come due right now, I mean, lately, recently. Already 50% of time deposits have been turned into managed assets. The promo that was launched in the first quarter 2026, money is still sitting on the time deposit. Only as of July, the money deposited on these time deposits is going to be turned into managed assets.
Fine. Thank you, Adele. Are there any other questions?
No, this is the closing of our Q&A session. Let me hand it over to Mrs. Lanzone.
Thank you. Massimo, do you want to make a final comment on our results?
Considering what went on on markets, I am very happy with our results in terms of inflows, and I'm sure that based on what we will present at the convention, inflows will accelerate even more. I'm very happy with customer acquisition. 60,000 new customers were acquired. I am very happy with the new recruits. The network is really growing. Customer acquisition, you know, you make an offer, a 3%, a 4% or 5% promotional offer, and you have an immediate response by customers. When you try and wanna make a change of step in recruiting new financial advisors, things don't move that fast. It takes time.
You put in place an action, you do something, you implement an initiative, it takes time before new financial consultants can be hired. We started increasing recruits, recruiting, now I think we have accelerated even more, this really makes me very happy. Finally, I'd like to say that considering that we reported a plus 13% in net, in net income, even though we reported EUR 20 million less in terms of non-recurring items, in fact, the operating margin is up 25%. I'm really happy with our business performance. Thank you very much. Have a lovely evening. I know your day was really filled with lots of events and calls. We'll meet again on July 30th for the first half results.
Thank you so much. This is the end of the conference. Thank you for attending. You can disconnect now.