Good day, and welcome to today's UniCredit and Alpha Bank conference call, which will be hosted by Andrea Orcel, CEO of UniCredit, and Vassilios Psaltis, CEO of Alpha Bank. This meeting is being recorded, and at this time, I'd like to hand the call over to Andrea Orcel, CEO of UniCredit. Please go ahead.
Thank you. Good morning, everyone, and thank you very much for joining this call at rather short notice on a Monday morning. Vassilios Psaltis and I, Vassilios, sorry. I and Vassilios Psaltis, the CEO of Alpha Bank, are co-hosting this call today to briefly present to you the details of our strategic partnership in Greece and Romania, and to answer any question you may have.
Well, thank you, Andrea. Good morning from my side as well. It's a real pleasure to announce this landmark transaction, as it is the first investment by a strategic player in the Greek banking space since the onset of the sovereign crisis. Andrea knows the market very well and has been by our side under a different capacity over the years. That's a fair bit to go through, so Andrea will give an overview of the Romanian leg of the agreement, and I will then follow up with Greece. We'll talk about how this ties up into our respective strategic imperatives and take your questions, hopefully keeping it within an hour. So over to you, Andrea.
Thank you, Vassilios. Let's start with the Romanian leg. I have made it a key component of our regular financial updates when asked about expansion to stress the opportunities that I see in what I term bolt-on acquisition in our key markets, with a particular focus on those countries in CEE. Today's announcement is a demonstration of that interest in our growth markets and natural expansion of our strategy with the creation of the third largest bank in Romania by total assets. In practical terms, as you will have read, the merger combines two complementary franchises with UniCredit Romania and Alpha Bank Romania, both having solid footholds in the corporate and retail segments. The basis of this agreement brings together two exceptionally high quality institutions with a complementary focus on driving growth in Romania, providing enhanced benefit to their respective client bases.
For Alpha, it is a route to Romania and UniCredit's other 12 markets, and for UniCredit, it is access to Greece for UniCredit's products and factories. The complementary nature of these client segments, coupled with the strength of offering from UniCredit's best-in-class product factories, means that as a result, the merger will grant the current customer of Alpha Bank Romania with access to an enlarged range of services and products provided by UniCredit. The transaction is expected to close in 2024, subject to the normal completion of a confirmatory due diligence process, corporate approval for the merger, and all necessary regulatory approval and consents, including on antitrust. Once completed, Alpha Bank is expected to retain 9.9% of the combined entity share capital and receive a cash consideration of EUR 300 million, or a lower amount in the event of any post-due diligence adjustments.
For us, the impact on our CET1 ratio as a result of this acquisition will be around 15 basis points.
So let's move now on to the commercial partnership in Greece. There are actually several complementary aspects to this part of the transaction. Number one, UniCredit will purchase a majority 51 stake in Alpha Life, our pension and savings product subsidiary, benefiting from an exclusive long-term distribution agreement with Alpha Bank, while enriching the current product range through the addition of UniCredit products. Number two, we will enter into a distribution agreement for UniCredit's asset management products, with UniCredit gaining access to our full distribution network, while Alpha Bank's clients will benefit from an increased offering that will now encompass UniCredit onemarkets mutual funds, as well as the terms and conditions that UniCredit has been able to attain from their existing partners.
The ability of UniCredit to extract better terms out of their partners for the benefit of our clients, as they do for their existing clients, is a clear differentiator and is now enhanced as they bring with them the increased weight of 16.5 million clients. And then lastly, through a cross-referral system, our respective client bases will gain access to an enhanced service offering across the product range in the UniCredit's combined 15 countries of presence. That's together with Alpha Bank. This is a truly mutually beneficial commitment. UniCredit gains access to our universe of clients to distribute their products, and our clients get access to a significantly enhanced offering at the best terms and conditions possible.
I would like to add that after significant reforms to aid the country's recovery from deep economic recession, the macro outlook for Greece has strengthened, with the country now having a high growth potential and expected to post the third highest growth rate in the Eurozone in 2023, at 2.5%, behind only Cyprus and Malta, according to IMF forecast. Robust economic momentum and a legislative overhaul placed the country in a favorable position in terms of attracting foreign investors. Rating agencies have already started to upgrade Greece to investment grade after 13 years.
More recently, S&P this past Friday, and more are expected to follow. Moving on to the next part, we have submitted today an offer to the Hellenic Financial Stability Fund to purchase, in accordance with the HFSF, the investment strategy and procedure, all the share of HFSF currently hold in Alpha, equal to circa 9%. The transaction will have a negligible impact on UniCredit CET1 ratio. If the process with the HFSF is not completed, UniCredit has committed to purchase on market, the lower of a 5% equity participation in Alpha or pre-agreed value, if over a period of 24 months. In Romania, the decision to merge our Romanian subsidiary is primarily driven by doing what we believe is in the best interest of the best of the business over the long term, and what creates maximum value for our shareholders.
As those of you who follow us know, our objective for Romania has been to ensure that we maximize the value of our established franchise. The merger with a top player in the pan-European banking space, such as UniCredit, is testament to the quality and thus the value of our franchise there. Through the merger of our subsidiary in the country, we are able to attain critical size, solidifying the status of the combined entity. Oh, I'm sorry, but I seem to have jumped the page. I apologize. Linked to the UniCredit strategy, as mentioned at the outset, opportunities to grow our footprint and our presence in the CEE market and the opportunities that it presents, as well as the expansion of our product factories and the cementing of partnership that enables that expansion, are core tenets of our growth strategy.
This project is a natural extension of our strategy, and with it, we meet all our objectives. We grow our presence in an attractive growth market such as Romania, and are able to tap into a pipeline that provide access to two million clients, to whom we can offer best-in-class products and services in a fee-driven, capital-light way. It vindicates the quality, competitiveness, and success of our factories, how they can be scaled and leveraged for the benefit of not only our clients, but those of our partners, starting with Alpha. In becoming a primary partner to Alpha in both asset management and unit-linked, we underscore the quality of onemarkets and demonstrate the first step towards an internalization of life insurance.
It also indicates the quality, competitiveness, and success of our factories, how they can be scaled and leveraged for the benefit of not only our clients, but also those of our partners, starting again with Alpha. And finally, we underscore the strategic approach that UniCredit, that Alpha has taken in expanding both geographically and product-wise since we unveiled UniCredit Unlocked, leveraging on the attractiveness on our business at a pan-European level. Being able to fulfill this objective with a partner as complementary as Alpha, where the synergies from the geographic and client footprint are so evident, ensures that these mergers will truly be to the benefit for all of our clients and to that of our shareholders. And I'll pass it back on to Vassilios.
Well, for Alpha Bank, this transaction as well clearly promotes our strategic objectives. In Romania, the decision to merge a Romanian subsidiary is primarily driven by doing what we believe is in the best interest of the business over the long term, and what creates maximum value for our shareholders. As those of you who follow us know, our objective for Romania has been to ensure that we maximize the value of our established franchise. The merger with a top player in the pan-European banking space, such as oniCredit, is testament to the quality and thus the value of our franchise there. Through the merger of our subsidiaries in the country, we're able to attain critical size, solidifying the status of the combined entity as a top three player in the market, thus improving the profitability potential.
The additional net income allow us to benefit from an uplift in the value of our investment, while at the same time, the retention of a 10% stake means that we can still capitalize on the favorable outlook for Romania. And of course, we retain this presence in a capital-efficient way, further optimizing our capital allocation and seeing an uplift to group returns through the upfront realization of value. With regards to our partnership in Greece, we have in the past established commercial agreements that accelerate product development and transfer know-how, mainly in the payments and in the non-life space. However, the agreement we announced with UniCredit today is not simply an extension of that strategy, as it comes with a much wider envelope of a holistic, long-term partnership and a large equity investment.
UniCredit comes with strong know-how in the targeted areas and has wide expertise and a broad network that will improve the overall service we can provide to our customers. We believe this partnership cements our leading position in the respective segments domestically in Greece, and thus further strengthens our franchise, underpinning our ability to improve the value that we create for our shareholders going forward. Furthermore, we bring a strategic partner onto our registry that has significant know-how and a strong presence in Europe, and we welcome that option to participate in our board. And importantly, we accelerate and de-risk the pending transaction by the HFSF. And then lastly, in terms of the impact on our key financial targets, these transactions are positive. In June, we set out our 2025 targets.
... Based on those, overall, the transaction leaves net profit expectations unchanged. However, at the same time, we will be further enhancing our capital buffers by more than 100 basis points, mainly due to the deconsolidation of the Romanian risk-weighted assets. As a result, we now expect to improve our 2025 return on tangible equity by 50 basis points, from above 12% to above 12.5%, with upside potentials from the commercial agreement. Andrea, I think with that, we should open the floor to questions.
Thank you, sir. Ladies and gentlemen, as a reminder, to ask a question at this time, please dial in over the phone and signal by pressing star one on your telephone keypad. Please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, it is star one to ask a question over the phone. Our first question comes from Antonio Reale from Bank of America. Please go ahead.
Good morning, everyone. Thanks for the presentation. It's Antonio from Bank of America. I have a couple of questions for Andrea, please. So it's clear what you're doing in Romania. I think it's clear also the financial rationale of the deal. It's a little less clear to me what your strategy is with respect to Greece. So you'll have a stake in Alpha Bank, have signed a commercial partnership, extended your product offering in Greece, which is a new market for you. What is your medium-term strategy in Greece? That's my first question. And secondly, you're guiding to a run rate of EUR 100 million incremental net profit for UniCredit, which derives from the merger in Romania and the partnerships. Can you maybe break down the drivers of the incremental net profit?
So how much will come from Romania and how much will come from Greece? Thank you.
Okay. So medium-term strategy, it is what it is today. Meaning we, in discussing with Alpha, the merger of our subsidiary in Romania, we actually came across the fact that there was significant value we could add for Alpha by plugging our factories, which will start with asset management and unit-linked, and shall continue across the board into their client franchise. And for us, it provides us with, let's say, vindication of the quality we have built in our factories, plus an ability to expand capital-light fee income and quality income into a parallel client franchise, i.e., the one of Alpha. So in looking at that, it also makes sense to seal this partnership with the acquisition of a significant but a limited stake in the bank.
Given the privatization, we have elected to make an offer to HFSF for their 8.9%. If that were to fail, or not complete for any reason, it is a competitive process, we are committed to buy the lower of 5% or a capped amount over the next two years to, you know, support our partnership in factors. That is what it is, no more. Actually, I am very excited about it because we have discussed the Pan-European advantages that UniCredit offers to its 13 banks and to all of the clients in the 13 countries. In this way, we will be able to stretch those advantages to Alpha, and Alpha will stretch those advantages to our 13 banks without having to do a more traditional full acquisition of a bank.
So it gives a lot more flexibility, in my opinion, capital light, you know, development potential to our model. With respect to where the value comes, I think the value comes primarily from Romania at this point in time. While we're very excited about what we can do with Alpha, what we have in those numbers are particularly related to unit-linked and Allianz Asset Management. And at the moment, Greece is still at the beginning of its growth phase in those areas, although Alpha has one of the best franchises in those products. So those at the beginning will be limited. Most of the value comes, as I said, from Romania. You just have to compare cost-income ratio of the two banks and add some to see how much is cost synergies.
There will be significant amount of, let's call it liquidity or financial synergies, as, Alpha is, quite liquid and tilts our franchise towards retail. Thirdly, there will be, the cost of risk of the two subsidiaries is very much under control. Ours has always been, and Alpha has, has finalized its own cleanup. And as we said in the due diligence, we have adjustments to make sure that that will support the bank going forward. So I would say that these are in the, in excess of EUR 100 million number and justify most of our number. What is not, factoring in a meaningful way is a substantial growth we can both extract from the franchises as they can together.
I would like to remind everybody that we were still rationalizing Romania and maintaining a check on our liquidity, and Alpha has been cleaning up and preparing Romania for a second phase of growth. So as they merge, they will both be on the front foot to go over, to grow the franchise forward. So we're very excited about that.
Thank you.
Our next question comes from Andrea Filtri from Mediobanca. Please go ahead.
Yes, good morning. Andrea, first for you. How do you convince the market that this is not the first step towards a traditional M&A between UniCredit and Alpha? Could you repeat this type of deal elsewhere? And what does the investment agreement mean for your JV with Amundi in asset management, please? And finally, if you could give us the horizon of the EUR 100 million-plus synergies. Thank you.
Okay. So, let me start with the last one. It's not EUR 100 million+ in synergies, Andrea, it is EUR 100+ million of additional net profit. So I am factoring in there the earnings of Alpha that we are incorporating into the combined organization, and then we add the synergies on top. So just, just to be clear, given that it is a cash transaction, we are. We've always said two things. We will have generous distribution that are recurrent and that are sustainable. So those distributions are confirmed, EUR 6.5 billion, in excess of EUR 6.5 billion this year.
But we also said that we will, we are still creating excess capital, and that excess capital could be used either to increase our distribution going forward directly by distributing it or increasing the, the distribution going forward by buying earnings at multiple that we feel are compelling given where our share price is trading. This is exactly what we're doing now. So just to be, to be clear on that. Timing, it depends, the timing for approvals and everything else. I would say that run rate is, at the moment, if you're conservative on the timing, that hits the second part of 2024, all of the approval and the execution, you're looking run rate of all of the, that number, 2026 or beyond.
If we can do it earlier, we'll do it earlier, but I would say that we still have to do a lot of work to clarify a lot of things. As you can appreciate, we've worked on this transaction closely, but we have not entered into all the details because we wanted to keep confidentiality. So we will update you on the revised numbers as we close the transaction. The second thing that you asked is, how am I going to convince people that this is not the first step towards a full acquisition of Alpha? I would say because by now you should be very clear that I either don't say something, or if I say, I hold it.
And that for me, having a partnership on the, let's call it distribution or on the client side with Alpha, being able to capture from not only asset management and unit-linked, but trade finance, payments, advisory, correspondent banking, locking in the equation between Greece and our 13 markets, I would say primarily the Balkans, but also Italy, and to a lesser extent, Germany and Austria. And doing so without consuming any capital and being able to bring in the quality revenues without everything else, and not sacrificing for low synergies in a market where we're not and that we don't know, is the way to go.
So for the time being, and for the foreseeable future, this is the best alliance we could think of, and I think it's the best use of capital without taking much risk that we don't want to take in execution of things we do not know how to execute. With respect to stretching it, sure, there could be situation where if this is a success, and I expect it to be, and that it will become an example of what key things can be done, it gives us strategic flexibility to add more banks to the network. So we will have our own banks, which we will continue to build upon and to do more acquisition about at these kind of terms.
But also we have the option to stretch and bring in the network and in partnership, other banks, that then will add not only to our 13 markets, but respectively to Greece, to Alpha, and to anybody who joins. So I do think it's a nice way to leverage our factories, that we are the only ones who can build to that extent, because we started with 15 million clients, now 17 to be, and then use that advantage and bring it to third parties that connect to our network in a way that is, that is profitable for both sides and respectful of both sides. I will add, maybe half as a joke, that I've known Vassilios for a long time, and beyond committing to you, I've committed to him, and I'm not going to deviate.
You, I think that was it, or was there another question in there?
If there are any implications for your JV with Amundi?
I don't think there are any specific implication on that. This is a new market, and there are no implications.
Thank you so much.
Thank you.
... Our next question comes from the line of Eleni Ismailou from Axia Ventures Group. Please go ahead.
Hello, and thank you for your presentation. Just one question for Alpha: What do you plan to do with the excess capital, and also does it accelerate your dividend policy, and would you consider a buyback? Thank you.
Thanks, Eleni, for that. Well, allow me to reaffirm our intention to pay dividend out of the 2023 profits. This is something that, we're very clear on, on our Capital Markets Day, and we ever since continued to communicate with that. In addition to that, I think, our focus on shareholder value, if anything, shows, is shown by this transaction, where we prove our willingness to execute. So with that, if you look at the numbers, we're actually building surplus capital, and that comes ahead of our promise in our Capital Markets Day. That means this accelerated pace, in our view, increases the confidence about, number one, the ability to create the excess capital that would be available to shareholders for the period up to 2025.
Secondly, obviously, makes the discussion that we're anyway gonna be having with the regulator, starting with a much better position. So if you look at the overall picture, I think we do have now, we do have also with this transaction, plentiful of capital from the promising loan growth in Greece. As you well know, we are very disciplined on pricing. We maintain our required return thresholds on anything that we do. So with that, I feel that, you know, we are best positioned towards that direction.
Now, discussing about buybacks, I think it is quite premature, given that we first want to get this discussion with the regulator on the dividend firmly down, so that we can then enlarge our options around the way that we're gonna be able to return to our shareholders, the value that we extract.
Thank you. With this, well, we are going to move to our next question from Delphine Lee from J.P. Morgan. Please go ahead.
Hi, morning. Thanks for taking my questions. My first question is on the stake in Alpha Bank of 9%. The local press has been talking about a premium of 50%, which suggests something around at least EUR 400 million. Is that the maximum amount that you're committed to invest in Alpha Bank? Just trying to get the sense of, you know, your commitment in, you know... I mean, if you don't get the stake from Hellenic Financial Stability Fund, is that amount the maximum that we should think about in Alpha Bank? My second question is on the product factories that you're talking about and UCG onemarkets, mutual funds.
I mean, can you just maybe elaborate a little bit about, you know, what you intend to do in Greece with, with asset management in particular? Just so we understand a little bit, you know, sort of the potential for fee generation here. And then my last question is on, more generally on the, the buybacks and the usage of the excess capital
Hello? Can you hear me?
Yes, I can. Please go.
Okay, sorry. Sorry. Yes, on the buyback, are you—do you feel, Andrea, sorry, that you're already doing a lot on share buybacks, and are you now emphasizing a little bit more M&A or transaction for your product factories? Or is, let's say, exceptional buyback still on the cards? Thank you.
Okay. You, you broke up the thing, so bear with me if I misunderstood some of your questions. So first, stake. So, we felt that as we're striking this partnership, we felt it was the right thing to do to make an offer to HFSF for their stake, and therefore, to allow for the full reprivatization of Alpha. Okay? However, if that is, in inverted terms, not successful for any reason, our commitment is to reach the lower of 5% or a capped cash amount that we have not disclosed, because otherwise you would know the number. And clearly, it is a lot lower than the amount that we need to buy 9%, given that it's a lower stake, 5% and a capped amount. So it's a lot lower.
And the purchase is done over a period of 24 months. So we have said that we would do it over a period to 24 months. So what we don't want to do is to drive speculation on the stock so that we're all clear. The second thing is, with respect to, product factories. So as we have discussed before, but, and we will be giving you more detail tomorrow, so again, bear with me tomorrow because you will have the answer to many of your question, I hope, is as part of our strategy, we have put back and reunified all the client franchises in each one of the 13 banks. Before they were all segmented and fragmented. But what we have also done, is we have centralized all what we call the product factories. And the product factories are-...
are going to be by tomorrow in three families. One, individual solution, which touches asset management and, insurance, both protection and life. Two, payments, for both corporate and retail. And three, corporate solution, which starts advisory and financing, client risk management, which is fundamentally the ability to provide SME clients with hedging products digitally or directly in, in FX, in rates, and in commodities, which for Europe is quite important. Trade finance and correspondent banking, and the likes. So these are now centralized for the group, and as they are centralized, they get scale and scope benefit, both in terms of the talent we can hire, the technology investment we can make, and the partners on the product side, so on the factory side, we can attract.
I mean, we've talked about Allianz in the past, we've talked about Mastercard, and we can continue. So those factories now give a truly, in my opinion, competitive advantage to each one of our 13 banks as they have the local reach, but they can distribute or leverage products and services at scale from the group. So the local competitors cannot replicate those kind of factories, but the, let's say, global competitors or larger competitor do not have the local reach. That's the principle. That's the concept. So if you now take away our 13 banks and add Alpha as a partner, we will just plug the factories in the same way and provide Alpha with the same type of advantage, obviously, in the fashion that they prefer. And that is a further leverage of our product factory.
So what we will show you when we talk to you about fees and quality growth, we have always spoken about what can be done with these product factories by leveraging the 13 banks. Now, we will be able to talk to you about what can be done by leveraging the 13 banks plus 1, which is Alpha. And if in the future there will be other agreements like this one with other banks, in markets where we're not, or in segments where we're not, then that will accelerate what we can do with the product factories, and therefore with the fee generation in the medium term. This is not a short-term impact. With respect to buyback distribution, excess capital, and so on, and so on, I will touch this tomorrow, but suffice it to say two things.
One, we have always said that as of today, the distribution, both share buyback and dividend that we're doing, are ordinary, recurring, sustainable. So the EUR 6.5 billion are confirmed, and hopefully, when we get all the authorization, we will anticipate the EUR 2.5 billion to this year, for 2023. The second, that does not change and remains the same, and those distribution will evolve with our organic capital generation and will remain ordinary. You are right, we have accumulated a significant amount of excess capital. That excess capital was always, not now, was always circled to go in primarily two directions. Direction number one, was increasing the distribution that we do, if and when necessary.
Direction number two, acquiring earnings to increase the distribution in a more organic way for the longer term, always keeping into consideration that our stock is trading at 5.5x, and we didn't want to deviate significantly from that when we acquire earnings. What we have, what we are announcing today is bang on on that. Is there now more of a focus on using excess capital in one direction or another? It depends on opportunity. The focus is exactly the same as it was before.
Great. Thank you very much.
Welcome.
Thank you. We'll now take our next question from Hugo Cruz, from KBW. Please go ahead.
Hi, thanks for the time. Just wanted to ask, are you looking to announce or, you know, look at any other M&A opportunities in CEE, or any other additional distribution agreement with other banks? Perhaps not in CEE, but if you could discuss that. And also in CEE, you know, what are the other countries you currently see as most attractive? Thank you.
I'm sorry. I got the CE question, but you broke up on the other two. Can you briefly repeat the other two questions? Sorry.
Yeah, sorry. Just if you could disclose if you are looking at additional M&A opportunities or distribution agreements with other banks? If it's something that you're currently discussing.
Okay. So I would just simply answer as I have in the past, because it is the truth. We look. It is our job to look at many things. It is also our job to be absolutely disciplined. You have seen us in many contexts, and you also have seen us say no several times. This continues. It is our job to look at opportunities that add value, and I have been clear that at this point in time, we see more opportunities to add value in the CEE than we would see in other markets, just because of what they are at the moment. So we will continue to look.
If there are opportunities in the right markets, at the right terms, that are consistent with our strategy and with the financial metrics that we have committed to, we will proceed. And if they are not, we will not proceed. With respect to distribution agreement, I would say that this is a novelty that came out from discussing with Alpha, Romania. And we realized as we were discussing with Alpha, Romania, the benefits of plugging our factories in Romania on Alpha franchise, and it expanded in doing so on the Greek franchise of Alpha. Now that has opened another option. We are having no other discussion with anyone on this option at this moment because it is completely a new option. Is it possible in the future?
It is possible, but I would encourage you to stay focused on my own priorities. One, creating value from within, and creating value from within, and creating value from within. Two, if there are acquisition that are in our perimeter, at the right financial terms, which compete correctly with buying our own stock, and win, do them because it makes sense. Now, we have a third option that is potentially, if there were to be other partnership of this type, we would look at them. But the focus, 80% of our attention is to deliver, deliver, deliver on our organic actions. Thank you very much.
Thank you, and as a final reminder, to ask a question, please signal by pressing star one on your telephone keypad. We will pause for just a moment to allow you to signal. We have a question from Mehmet Sevim, from J.P. Morgan. Please go ahead.
Good morning. Thank you very much for the presentation. I have a question for Mr. Psaltis, please, and this will be on the remaining involvement in Romania. Clearly, this is a transformative development for the franchise, but given you will be left with quite a small stake going forward, have you considered at this stage a full exit from Romania? And if yes, and decided against it, what upside do you see for your shareholders in the medium term from this franchise? Thanks very much.
Well, thank you. Thanks for the question. Listen, our view on Romania has not changed vis-à-vis our recent communication. This is indeed. We still consider that a very fast-growing economy. It's still an attractive banking market. The whole point is that time goes by, we all realize that in order to achieve adequate returns, one needs scale. So, what we have said already at our investor day is that, you know, we would be looking towards optimizing the way that we can extract value from our franchise. Which, by the way, is doing very well, and testament to that is indeed also the fact that UniCredit has been interested in partnering with us on that.
Now, the way we are looking at it, is that this transaction accelerates the achievement of these objectives in Romania. And on the other hand, at the group level, we do optimize the value for our shareholders. We're creating the number three player, and this is firmly a step up in terms of scale, in terms of profitability, but at the end of the day, in terms of the ability to service the customers there. So the criteria that we have used also on this one, is that we aim to maximize the shareholder value, and indeed, in a way that unlocks significantly, immediately for our shareholders. But at the same time, we're keeping a balance by retaining the longer term upside.
This 10% in a much more profitable bank, at the end of the day, allow us to arrive at the same amount of earnings that we have promised at our Capital Markets Day. However, we achieve that with a much more optimized capital efficiency, and on top of that, we release 100 basis points, more than 100 basis points of capital. So you appreciate that through this transaction, on the one hand, we have proven that we are very disciplined and diligent in implementing our capital allocation framework. But on the other hand, we're also fairly flexible in arriving at the structure that will allow us to optimize as many as we can from our key vectors.
That's great. Thanks very much.
Thank you. And, as there are no further questions in the queue, this concludes today's question and answer session. And with this, I'd like to hand the call back over to Andrea Orcel, the CEO of UniCredit, for any additional or closing remarks. Over to you, sir.
Well, thank you very much for your time and for joining us, Vassilios and I in this call. Hopefully, we will show you even more value creation than we are committing to today. Thank you, everyone.
Thank you all.
Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.