You are listening to the Chorus Call Conference Operato r. Welcome and thank you for joining the Banca Ifis Experts Hub 2025 Results Conference Call. 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 speak to an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Frederik Geertman, who is the Chief Executive Officer of Banca Ifis. Please go ahead, sir.
Thank you, madam, and welcome everybody to our First Hub 2025 Results Call. Today we will, first, devote some time to the illimity transaction, which, as you know, has closed on July 4th. Then we will do the usual update of the results as you are accustomed that we do every quarter. As always, we will have time for Q&A at the end, so we welcome your calls and your comments and questions at the end of this call. I would like to create you page four for the update on illimity. Following the completion of the tender offer and the reopening of the term, the bank has acquired 92.5% of illimity's share capital. That includes the owners' shares.
The sell-out procedure for the remaining outstanding shares will end on August 29th, and the outcome of the offer we think guarantees the full integration of illimity in Banca Ifis, generating, obviously, higher industrial value than the two entities separately. Thanks to the cost and revenue synergies that the postmortem group will generate and the application of risk and asset quality standards of Banca Ifis to illimity. illimity holds a shareholders' meeting on September 26th for the appointment of its new corporate body and for the review of articles of association reflecting its inclusion in the new banking group. We also confirmed to the market that we have appointed PWC to carry out the due diligence on illimity's balance sheet that was requested, as you may recall, by the ECB, which is to be completed by December.
Banca has encouraged illimity to immediately review and assess the asset quality of its portfolio in light of the upcoming due diligence process and the future alignment to Banca Ifis's best practices in terms of asset valuation. The ensuing extraordinary write-off will not affect the overall risk-return profile of the transaction for Banca Ifis or the financial and capital founders of the combined entity. Banca Ifis is, of course, closely monitoring the risk profile, the asset quality, and the liquidity of illimity. Page five: we're ready for the integration, well positioned to benefit from the full integration of illimity. We like to remind everybody of our track record in execution and value creation. We have a first half net income this year, or this semester, of EUR 87 million, and that's EUR 94 million excluding the EUR 9 million pre-tax one-off costs linked to the offer.
We're well on track towards the 2025 standalone guidance. Of course, the track record also includes the 2022-2024 business plan where we accumulated in excess of EUR 460 million, which was significantly above the target. We followed a very solid CET1 ratio, 16.62%. That's more than 6.6% above the draft requirement, faced both the macroeconomic environment and the integration of illimity while maintaining our effective dividend policy that supports our growth and ensures a solid capital profile. We stated in January when we launched the offer and reaffirmed it that we have a post-merger CET1 target in the range of 14%. We have a very robust financial position, EUR 1.1 billion in reserves that can be funded in the ECB. Further flux in July, as you've probably seen, with the placement of a single-booker bond of EUR 400 million.
The spread on this bond was at a historical low of 145 basis points, significantly below previous emissions. We have a clearly set risk profile that you know in terms of diversification, concentration, portfolio duration, risk exposure, locked in default mitigation, for guarantees. The bank is well set to execute an integration and to absorb the economic effects of the integration itself. A page on value capture. We confirm cost and revenue synergies as quantified. A very detailed and articulate execution project has already been kicked off with numerous managers on both sides involved. Defined, combined, organizational setup, the IC, the business structure, starting on a qualitative and quantitative assessment of illimity's personnel, but at all levels in terms of skills, remuneration, and the need of the combined entity. The balance sheet consolidation, of course.
In Q3, we will consolidate the results and the balance sheet of illimity and profit alignment of operating division, the streamlining of the function to improve efficiency and ensure, obviously, operational continuity. Finally, the cross-selling activation on the revenue side into the respective customer bases. All the integration analysis and the due diligence will be completed by the fourth quarter of 2025. In addition, we have started a strategic review of illimity's assets and subsidiaries, considering potential disposal based on the fit with Banca Ifis. We will consider their potential long-term value creation and the investments required in terms of capital expenditure and human resources, but also the value that may be captured by potential asset sales. Page seven: the timetable for the integration.
As I mentioned, until the 29th of August, we have the sell-out offering to the remaining illimity shareholders, either the same conditions of the tender offer or an alternative tax amount of EUR 4.0767 per share. In September, the delivery of the illimity will issue, where the exact date is to be defined, depends also on the outcome of the sell-out. On December 25th, shareholders' meeting for the appointment of the new corporate bodies. In November, as always, we will present the nine-month result, and they will be consolidated results with the consolidation of illimity. In December, we expect to conclude or we have to conclude the due diligence on illimity as requested by the ECB. In the first half of 2026, we'll be ready to share with the market a business plan for the combined group. Having said that, we go to page nine, on the second quarter results.
Quarterly revenues, down year-on-year, 9%. Net revenue is about EUR 172 million. QoQ. Commercial banking revenues at EUR 83 million, QoQ decreased mainly due to seasonality and structured plan as an equity investment. They gave us a very significant boost in the first Q. Npl revenues at EUR 76 million. As we shared before, we are streamlining the recovery activity, and we're executing with focus on the existing costs and on the new Npl acquisitions that we did in the first half of this year, where we've acquired, at a quite quick rate, interesting portfolios. Funding non-currency and net revenues at EUR 13 million. We confirmed the proprietary book as a recurrent and stable contribution to revenue. I recall, on the year-on-year data, that the second quarter of 2024 was positively impacted by, first of all, a much higher base rate.
That's between 150 basis points to 200 basis points, and also the starting of a workout of the newly acquired Npl portfolio and some interest in the model we call the illimity Leasing. Late interest payments on specific files. We will be more clear later in the comments. Page 10: Commercial Activity. Factoring develops, the turnover developed better than the market. We always keep an eye on spreads there. It's quite easy to get a lot of turnover from the market. It's more difficult to get it at good spreads. Our average spread is 3.65%. That goes on top of the base rate and excludes commissions, which are very relatively fascinating, as you know. We have EUR 3.4 billion turnover, which is considered a very good number based on the market. In leasing, two slightly different dynamics. Automotive leasing is on the rise, + 9% year-on-year when the market is contracting.
That's a very encouraging number. We maintain focus on our niches, so we maintain an average spread of 3.46%. Equipment and technology looks a bit soft, - 4% when the market did + 12%. I think I mentioned this in the last call. The market has seen an increase by large tickets that are not typically our type of activity linked to the PNRR. It's slightly distorted if we look at what's going on in our niche. We're holding up quite nicely and also keeping the rates in place. Overall, the leasing business is very healthy. Page 11: Npls. Usual quarterly cash collection will go up and down a bit, also based on how portfolios perform, new portfolios coming in, etc. We confirm roughly EUR 100 million per quarter of cash collection. In terms of revenues, EUR 73 million.
We add to those revenues some value that we extract from the sales of portfolios. That's really the back end of the Npl business, which confirms the asset valuation of the Npls that we have on the balance sheet. Page 12: Net Interest Income Sensitivity. I remind everybody that what we simulate here is a 50 basis point decrease. Of course, if we compare year-on-year, the decrease in base rates has been between 150 basis points and 200 basis points compared to when we measure it, so a multiple of that. You see that, obviously, in our net interest income, as well as the visible effects of these late payment interests that were present a year ago. We are continuing to work on two things. One is the further reduction of our rate sensitivity. The second is a very focused approach towards the reduction of the cost of funding.
Page 13: We get some transparency on the dynamics. You can see the graph with a bit of history. You can see the speed that base rates decrease. If we just look at the last two, we have the base rate effects of roughly 60 basis points. Aggregate interest income and effect of 40 basis points. The difference, of course, is due to the component of the portfolio that is fixed rate. For instance, in leasing, we have quite a lot of it. The aggregate cost of QoQ, 20 basis points for a net QoQ of roughly 20 basis points on the overall spread. I remind everybody that, you know, we had a lot of excess liquidity also, throughout 2024, given the objective to reach in advance the FSB rule. Page 14, Costs. Total quarterly cost down year-on-year through significant efficiency, of course.
QoQ, + EUR 4 million. That is EUR 2 million of indirect tax related to proprietary finance and bank deposits, EUR 1 million legal and consulting expenses, and EUR 1 million building and maintenance expenses. Overall, in the semester, a contraction year-on-year. In the last few, also a contraction year-on-year. Costs that we can directly link to Npl recovery, plus EUR 2 million. Cost of personnel basically stable, EUR 1 QoQ, and that's the monthly timing effect. Page 15, loan provisions. Still quite low levels. We had EUR 8 million in Q1, EUR 11 million in Q2, so a few million more. You see that our coverage levels remain very high. With respect to the reduction of the coverage in bad loans, that is not due to the entry of new bad loans, which are less covered. It is due to the exit of very seasoned positions that were very highly covered.
These positions were closed, and this appears from our books. Finally, therefore, impacting the average of the overall coverage ratio of the bank at 46%. If we look at NPE ratios, you see that they go down both on the gross and on the net ratio. That happens not just because of the runoff of the pharma portfolio that you see in gray. We always show it separately, but also a reduction in the actual, real Npl, as you might call them. You see that we have a 20 basis point decrease from 5.7%- 5.5% on the gross ratio. Gross Npl ratio, that we closed the quarter with 5.8%. Net Npl ratio, 3.2%. No real changes in the risk situation of the bank or in the outlook. On page 16, we show, as we always do, we try to be as forward-looking as possible.
We always get these questions in the call. We share with you top left, payment days in factoring, the [Net-Zero]. Late days, that's just how much time before the invoices are paid. Table. Top right, stage one and stage two loan. You can see that the stage two remains very subdued between, in the last quarter, at 9%, 7%, 8%. No significant increase there. Rating migrations, the upgrades and the downgrades are of similar dimension as they've been in the last quarters. Finally, as a result, you might say, in bottom right, the probability of default remains around 2.9% in the last quarter. Page 17: Capital Ratios. I already mentioned this because it's obviously relevant in the context of the integration of illimity. CET1 ratio of 16.62%. What are the key elements of the evolution? + 44% due to net income, after deducting an estimation of the dividend.
Minus 7 basis points due to increase in exposure on the calendar provisioning. Minus 40 basis points due to RWA increase, mainly due to the credit risk component. That's just business basically being underwritten and therefore impacting the denominator. I don't normally comment the detail of the quarterly results. You can see the table for yourself. If that's all right with you, I would here hold the presentation and hand over for any questions you might have on the results or on the press release that we issued a few hours ago. Thank you very much.
Thank you. This is the Chorus Call Conference Operato r. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Manuela Maroni in Intesa Sanpaolo. Please go ahead.
Good afternoon. Thank you for taking my questions. I have some questions on illimity and some on the dividends. On illimity, first, what amount of extraordinary write-offs do you expect for illimity in the second quarter of this year? Second, given the recent development, do you still see financial value in the transaction? Third, what Common Equity Tier 1 do you expect at the end of 2025 for the combined entity? I mean, does the 14% Common Equity Tier 1 you mentioned in the presentation already account for the foreseeable write-offs and the integration costs? In the press release, you mentioned the spin-off of certain non-core assets to mitigate the impact of the write-offs. Could you please clarify which assets are being referred and what is the expected timing? For the dividends, I would like to know what dividends do you expect in 2025?
Your guidance for the year on a standalone basis is EUR 150 million of net income. illimity will bring EUR 110 million of restructuring costs. If you have a larger amount of shares, under this scenario, do you expect us to skip the EUR 2.1 dividend per share you paid in 2024? The last question on dividend is if you will pay the interim dividend in November? Thank you.
Thank you, Manuela. It's quite a list. First of all, the extraordinary write-off. As the parent company of illimity, we're aware, of course, of the magnitude of the extraordinary write-offs that are important, but they are consistent with the price paid and the targets that were communicated on January 8th. Considering that they will be included in the second quarter results of the company and that the illimity part of Banca Ifis group started in July, we believe that the detailed communication regarding the scope of the assets involved and the amount is the responsibility of illimity's current management. I reiterate that the numbers are sizable but consistent with the offer price and the projections we made at the start of the offer period. The amount is in line with what we financially estimated after the last of the offer and after a previous write-off announced by illimity.
We are confident, to your question, do we still see financial value, that they will not affect the overall risk-return profile of the transaction for Banca Ifis nor the financial and capital founders of the combined entity. We confirm the rationale. I remind you that the pricing was always based on the premise that, first, significant balance sheet repair would be necessary. Second, the equity story told by illimity's management was consistently over-optimistic in our view. To put a number on that, you asked for it. We expect, we still expect to maintain a solid CET1 level of around 14% after the integration, which we think is the correct level to run a bank of our size and to maintain an attractive dividend policy. In terms of the dividends, first of all, we have a guidance of EUR 160 million.
As I expressed, we think we are on track to meeting that guidance. Remember that when we completed the transaction, we had acquired north of 90% of the shares for roughly one-third of the book value, right? Part of that book value has already been eroded by the provisions carried out since then, but there's still a very sizable bad will. 2025 dividends will depend on, on May 10th, the operational results of Banca Ifis, of the illimity, the final result of the due diligence that PWC needs to perform, obviously, the evolution of the macro environment. I think we'll be more precise regarding the precise numbers that you asked in the third quarter call. Let me say that for 2025, we confirm an attractive dividend policy, overall in line with the policies we had in 2024 in terms of overall cash out.
We think that that is the right way to remunerate the shareholders and to ensure a solid capital profile. We have started a review of all assets and companies that illimity already defined as non-core. On that, we are not in a position to tell you exactly what the perimeter of sales will be, right? We will certainly not swap into a fourth sale, right? We cannot now tell you which will go out first and which will go out second. We'll be more precise in the coming quarter, but we believe that at least some of these transactions will be positive in terms of contribution to capital. I think I answered all your questions, Manuela.
Maybe the interim dividend in November?
Oh, yes.
Is confirmed.
That's very easy. Yeah, confirmed. We've done it for the last years, and we'd like to keep doing it.
Thank you.
The next question is from Elena Rossetto at [audio distortion] .
Yes. Hello to everyone. Thanks for taking my question. A couple of questions from my side. When do you start and when do you have to conclude the due diligence requested by ECB for the determination of the bad will? Do you expect further write-offs? Do you confirm the EUR 120 million estimated restructuring costs related to illimity integration?
Thank you very much. Yes. The due diligence has to be complete by December because the ECB asked us to complete it within six months of that, roughly December. I would assume that we will have a clearer point of view on that when we have the nine-month earnings call, okay? It won't be maybe fully done, but hopefully, we'll give you some color on how it's going. I can't tell you how much that's going to generate, if it's going to generate anything, but, you know, obviously, it might. Also depending on the extraordinary write-off that illimity will do before the due diligence, right? That's to probably be subtracted. You don't need to do things twice, thankfully. You asked for the restructuring costs. EUR 110 million, we had estimated when we launched the offer. I can reconfirm it.
That's roughly a number that we didn't have any reason to change, okay? On the basis of the initial analysis that were made, the initial scoping of the project, we don't have today any reason to change it. We also reconfirmed, as we don't have any reason to change it, obviously, the good side, which is the recurring, not one-off, recurring costs and revenue shares, you see that, okay?
Thank you very much.
The next question is from [audio distortion] from [audio distortion] Please go ahead.
Hello, everybody. Thank you for taking my question. I go back to the dividend that you were discussing before. I don't know if I understood correctly. You said that you confirm, you think that in 2024, total dividend can be confirmed in terms of the sales, a total amount of around EUR 110 million, if I remember well. This is the first question. The second question, on the right, in the first half, there is quite an important reduction in terms of NII. When do you see an inflection point on this? In the coming quarter, do you see an improvement? Finally, on Npls, there is an important contribution of capital gains. In general terms, you've mentioned the sale of sales. Is this a strategy that is due to continue and that we expect further gains from sales going forward? Thank you.
Okay. Let me remind you of the dividend policy of our bank. The dividend policy says that until a certain level of profit, EUR 100 million, we distribute 50%. North of that level, we distribute 100%. That's the policy. If you take the guidance that we have, what follows from that is that the payout doesn't change because the guidance is similar to what happened last year. We are now in July. The dividends are paid at the end of the period, obviously, on the basis of the profits of the period that have still, obviously, six months ahead of us and some elements of variability. I think we've seen simulated specifics as reasonably possible in the month of July.
The dividend policy, as I mentioned, is unchanged, and it has that progressive, we think, very efficient and very market-friendly approach that as we make cash returns, we give everything to the market. If we make a bit less, then we give a bit less. North of EUR 100 million, we will distribute all. That's why we talk about consistent dividend policy, and that's why we talk about a market-friendly approach. With respect to the first half interest rate and the outlook, I will make a very brief comment and then ask for some help from Roberto Diacetti, the CFO, because he spoke about this stuff half an hour ago, and he will give some comments. You see a compression that, obviously, we noted too.
You don't need to project the same level of compression until the end of the year, also because, as we've said, first half last year, there were some elements in there that we can't repeat. What we're seeing now is as Euribor stabilizes, our cost of funding continues to decrease at a nice rate. The inflection point that you asked for, so when is the overall spread going to increase, we think you can start seeing that happening Q3, Q4 of this year, roughly. We will have a nice season ahead of us in which, hopefully, Euribor will be stable and the cost of funding will continue to decrease. Also, when some very, very expensive bonds expire, both from illimity and from Ifis. Some of that progression will be plunky, okay? It won't come in every day. It will also, hopefully, come in jumps.
I will ask Roberto to give you a bit of detail on the net interest income so that you really see where we stand.
Yeah. Thank you, Frederik. In terms of reduction in net interest income, EUR 17 million are actually due to base rate reduction. The rest is due to three factors that I would say are almost equally weighted. One, we sold Npl, so we benefited from higher other income, but lower contribution from workout into net interest income. Moreover, last year, we had important late interest payments that actually we had a very low contribution from late interest payments this year. The third is marginally lower spread in our commercial portfolio. I would say that those three factors have an equal weight in actually explaining why our net interest income has gone down. For the year, we stick with a guidance of - 10% net interest income. We are reducing our cost of funding. In June, for the month of June, it was 3.24%.
Our target is to reduce it below 3.20% for the year. Actually, we've seen some further reduction in the second part of the year. This should help the net interest income going forward. Thank you for asking.
I had a third one, and as Simone saw on Npls, yeah? I'll just take that and give you back the floor. Npl portfolio sales strategy will continue, the answer is yes, okay? Keep in mind that we like to sell sales, right, or cross-off portfolio where additional workup activity, and the cost of doing that starts to become negative as a trade-off, right? We're not selling valuable parts that will give us, you know, a significant ROE in the next quarters. We want to keep a cleaner shop than what was done historically, where we had very, very large gross book values, right? They have very limited relation to the net book value. If you look at the net book value of our Npl, you see a slight growth, I believe, Qo Q. I'll give you the answer.
What we're selling is spent sales of portfolios at the end of their life. The reason, as Roberto mentioned, that that contributes positively to the P&L is because we don't attribute a relevant book value to those loans. That gives you also some comfort, not just in the fact that we run a slightly shinier shop that's easier to read, but also that the value of the Npl, as they're written on our books, has a relation with the market value of these things, okay? We will keep selling. I'm not saying that the next six months will be as intense as the last six months because it depends on how much you had. As I mentioned, we are selective in what we sell, right? Expect us to continue on this path of probably stable to decreasing gross book value, yeah? and increasing net book value, okay?
Thank you.
The next question is Andrea Loro at [Twitter]. Please go ahead.
Hi. Good morning, and thank you for taking my question. I have three. The first one on RWA density. From my calculation, the RWA density of the non-core division seems to have increased quarter on quarter. What is this spike due to compared to last quarter? If you can comment on this point. The second one on calendar provisioning, are there any updates on co-investment vehicles and what can we expect on capital between now and the year-end on this front? The third one, you will present the updated business plan for the combined entity in the first half of 2026 after the due diligence. What are the main areas you will focus on in the immediate future? Can you give us a little more detail on the strategy you intend to adopt at the operational level on illimity? Thank you.
Okay. With greater asset density of the non-core division of illimity, that area will be tight. I don't have a point of view, okay? We'll need some, we really need some more time to get into that type of evaluation also, if it's too high, too low, or if there's any work to be done there. I get the question, but we need to come back on this in the following quarter. Calendar provisioning. You asked about the update on the structures that we're putting in place on that. We have an ongoing and positive regulatory conversation. We have conversations with co-investors. We are, I think, fairly close to being able to present to the market how it will work as we start. Expect us to come back on it in the nine-month call. I would want to add something.
You asked us what the impact on our capital would be when that starts. I need to clarify that these structures are not effective if you sell existing loans on the calendar provisioning from your book into the structure. They are effective when you buy with the structure new stuff. The effect on our capital, of the activation of such a strategy, you should assume is zero. Of course, progressively, it's another story, right, because over time, this will develop. I thought you had maybe imagined that we would be, you know, transferring a bunch of assets. The answer is we won't do that. Also, because the amount of Npls under calendar provisioning that we have now on the book is in the tens of millions of euros. It's not a huge, it's not a huge thing. Finally, update on the business plan. First half 2026.
Main areas to focus on, I would say, grab the presentation we made to the market when we launched the offer, right? We want to become a more universal bank. You will read up in the papers that we completed the acquisition of Revalea. It was just pending regulatory approval, of course, but it's hopefully there. Revalea was two years ago. I'm sorry. Hopefully there, pending regulatory approval, of course. illimity has a lot of assets in the SME part. illimity also has a, we think, well-performing and well-functioning home banking system for retail customers. Expect us to become a more multi-specialist, okay, with additional service lines and divisions compared to how we already were, with a strong focus on being the premier SME-focused bank in Italy, okay? Of course, individual business lines is a bit early, right?
The business philosophy, it was, I think, already a bit described in the, in when we launched the offer. That's the way we are working towards.
Is it okay, Davide?
The next question is from Fabrizio Bernardi in Intermonte. Please go ahead.
Hi, everybody. Excuse me. I had a few telephone issues. I guess you have stated that the dividend policies are changing. The bottom line is a standard and basic.
I'm sorry to interrupt, Fabrizio. You are not audible. It's a very disturbed line, and I can't hear, really, I can't hear a word you say.
Please, Mr. Bernardi, if you could just reconnect.
Can you hear me now?
Yes, please go ahead.
Yes, sorry. I had some mobile issues. I guess you confirmed the payout strategy and the guidance in terms of bottom line for 2025, including, yes or not, illimity. My question is more broad about asset quality, not of Banca Ifis, but in general. Do you see any coming issue or the asset quality, let's say, trend is going on okay with your projections? We have seen some banks, very big ones, projecting very low cost of risk and gross net Npls, well better than what they were planning. Given your job, I was asking if you can give us some color about what is going on.
Fabrizio, thank you. Thanks for repeating the question. We now hear you perfectly. We share data, first of all. You find it in the presentation. Do we have any indication of things going worse? Not at all. It seems all very, very stable.
If you're asking on the basis of macro data and on the basis of what happened over the last, I don't know, 20 years in the banking system, if I would expect an increase of risk, the answer is yes, logically, I would expect it. Because GDP growth is flat at best. Industrial production has been contracting for some time. There are macroeconomic volatilities or geopolitical, I should say, that are on the papers every day. I won't list them. If you ask me, would you, on the basis of this, expect that cost of risk in this country would increase, I would say logically, yeah. Do we see it? No. This type of paradox has been going on for a lot of quarters, which is why we add this part, because it seems a paradox.
I hope, which I think would be the most benign look on this, is that fundamentally, the strength of the Italian corporate segment and small business segment has improved to an extent that wasn't there 10 years ago when the big crisis hit. If that were the case, then we can assume that what we've seen the last years, what we just received in a moment due to the COVID measures or the liquidity that was pumped into the market, but it can stay with us. However, when you mentioned that large banks are projecting very low NPE ratios, I guess they're starting to factor into their model that something has changed permanently. That is, I think, today, as much as we can reasonably say. We see nothing in terms of deterioration.
We would expect actually something, but I respect also the position of players who probably start to assume that it could be more permanent in nature, this level of riskiness of the Italian economy. That would be good news.
Given your experience, do you have any, let's say, imagination about the trend of M&A in Italy? We are seeing many impossible transactions, most of which are, let's say, limited in terms of feasibility. What I'm asking is, is there an entity like, I don't know, the Bank of Italy or the ECB that is pushing for M&A in order to reduce dramatically the number of banks operating in Italy through consolidation? Is there a sense in this, or are all these transactions technically, industrially driven?
I can talk about our transaction. We proposed a market-based offer on a player that does similar things to us in a different way, so complementary to us. We approached the market and we put a price on that. 92% of the shareholders, or of the shares, I should say, were clad to that pitch, to that reasoning, to that proposal to the market. Apparently, the combination of price and strategic rationale was convincing enough for these shareholders to buy. We believe in it a lot. We think it is a good transaction. We think most of the entities will benefit. We think, especially, I would say, illimity shareholders will benefit from a larger, more stable, and more prudently run route. With respect to what you asked from regulators or from other players, that's really up to them. We are a market player.
We talk to the market and we propose a transaction. I think it would be probably a bit unwise on my part to comment on other transactions and also to comment on what the regulator's intentions would be. Also, my opinion, I guess, would be worth as much as anybody. I will keep my remarks at this.
Okay. My next question was more related to the role that the major banker is playing in terms of M&A. I was asking from the point of view of Banca Ifis if there is potentially any change that could happen if things go to the direction that we are told?
Yeah. Fabrizio, Banca Ifis doesn't have a point of view on that in anonymous call.
Okay, thank you very much.
Thank you.
The next question is from [Mr. Segrimardi], BNP Paribas. Please go ahead.
Good afternoon, everybody, and thanks for taking my questions. I have asked you two questions.
[Mr. Segrimardi], could you please use the.
Speaker louder.
Yes, get closer to the louder.
Speaker louder.
Can you hear me now?
No.
Not really. No, worse.
Can you hear me now?
Yes.
Yes, thank you. Thank you very much. That's better.
Thank you. Thank you. Thank you for taking my two questions. I have actually the first one, which was on the loan books. We saw some nice pickup quarter on quarter and year-on-year. Should we expect the same trend in the remainder part of the year? Do you expect that loan demand to be solid in due course? The second one is on cost. We saw this quarter, nice performance. Costs were QoQ, and there is some decline year-on-year. What should we expect cost to develop in the remainder part of the year? Thank you.
Okay. In the meantime, I have the COO , Mr. Lanza, to collect his thoughts on the second question. I will give the floor to him in a second. You asked about the loan book. Yes, we saw it too. We were happy to register that. We saw some takeoff in the loan. There's not a lot of loan demand, to be honest. We don't see a lot of demand from the corporates and the small businesses. What you see happening is the result of a very meticulous and proactive approach to commercial proactiveness, right, if you will. We would love to continue like this, to see it grow more, to grow on like this. In our opinion, the growth of the loan book is more distribution-constrained than, it's certainly not liquidity or capital-constrained in our bank, right?
When you want to be disciplined in terms of pricing, you saw that in leasing, right, where we had the two quarters, right? When you want to be disciplined in terms of risk, it's really a lot of work to get to be commercially effective in those cases where the risk and the price match, right? Obviously, Banca Ifis is a specialist, so we tend to be quick. We tend to be customer-oriented. We have great digital assets, so we tend to have a high service quality. The real thing is, can you give more, not can you give more loans? That's always possible. It's, can you give more loans with this risk profile and this pricing, right? That's what we're working on. You will see, I hope, a progressive continuation of this trend, right? That's certainly what we are working on.
The environment in terms of loan demand is not particularly benign, okay? I will give Fabio Lanza, the COO , the question on cost.
Hi. Good afternoon, everybody. Thank you , for your questions. I think that you could appreciate the high level of discipline that we use in this first part of the year. Obviously, we finished last year our projects, our three-year project out. That means that some projects finish according with the timeline. In the meantime, some other projects are incoming, both in terms of Banca Ifis alone, but of course, the last month, also something related to the integration and to the merger with illimity. If the question is if we continue with this high level of discipline in terms of cost, the answer is yes for both reasons. First, to confirm the results that, as I said before.
Second, to start the work that we have to do with the new colleagues to maintain our effort and to reach the synergies that we communicate with this investment merger. I hope I have answered your question.
Yes, thank you again for answering, and I apologize for the bad lines before.
That's fine.
The next question is a follow-up from [Simone Saccheriotte's] team at your bank company. Go ahead.
Yes, thank you. I would like to have a bit more color on the acquisition of Se&D [Assassin en]. What is the rationale of this acquisition? We saw your long-term project in the sector of wealth management. Where are the synergies with the rest of your business? I am having a medium-term view on these new segments that you are adding to the activities of the bank. Thank you.
Thank you, [Simonetta]. Yeah, we're really excited about that. We think [Okidea] is a fantastic platform in terms of efficiency and also performance. You might have read the interview our Chairman gave a few months ago where he positioned this type of development of Banca Ifis, right, with a long-term view for the development of the bank. The mandate I have from my Chairman is to, first of all, develop [Okidea], leveraging synergies with our group. They can exist both, obviously, on infrastructure, cost, and that sort of thing. It's a relatively small platform that we think can benefit a lot from being incorporated into an organization that has our size and our scale effect. Also, and especially, synergies in terms of serving our clients more broadly. We think we have unparalleled relationships with SMEs and with the entrepreneurs behind them in Italy.
You need to make only reasonable assumptions about our ability to talk to these people and develop this private banking business with them. Already, you will see quite a contribution to [Okidea]'s growth until now. In addition, what we plan to do is broaden the offer a bit. That's something that we will have to obviously develop in a project together with the management of [Okidea] that we think are really great and that we're very, very happy to welcome in our group. They've built a great platform. Therefore, together with them, we're going to develop this also under the Fürstenberg brand, which we think is a great honor that we have been able to use this. That will certainly add the prestige to this activity that it merits.
These are the elements that we think make it a very interesting journey that is just starting on the basis of this really interesting, efficient, and effective platform. When I say effective, I mean their ability to generate reproducible overperformance over time by a really great asset allocation and fund selection platform that they've developed over time. We think it is a small jewel. We're very happy, together with the shareholder, to go and develop this in the way that I mentioned to you.
Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.
Thank you very much. We will certainly hear or talk to you again in the nine-month earnings call. It's one minute to 3:00 P.M., so it looks like we've saved within the hour. I thank everybody for their time and attention. We'll speak to each other soon. Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.