Unipol (UNI) investor relations material

Transaction overview

• Announced acquisition of a carved-out Banca Monte dei Paschi di Siena (BMPS) entity, including 635 branches, around 2 million clients, €55bn in deposits, and €42bn in net customer loans, free of NPLs and legacy litigation.

• Purchase price capped at €3.5bn, financed by a €2.5bn capital increase and existing cash, with strong shareholder support for the rights issue.

• Target perimeter excludes large investment banking, insurance agreements, NPLs, and unrelated litigation risks.

• Intention to combine the acquired bank with BPER, aiming to create Italy’s second-largest banking group, with Unipol’s stake expected to reach around 40% (30% physical, 10% derivatives) and de facto control.

• Acquisition completion targeted for H1 2027, with full integration by year-end 2027.

Strategic rationale and synergies

• Transaction leverages Unipol’s insurance distribution through the new bank’s network, enabling immediate revenue synergies and supporting diversification.

• Estimated total synergies from the BPER combination exceed €800m (c. €300m revenue, €500m cost), with management viewing these as conservative.

• No significant branch overlap between BMPS and BPER, supporting complementary growth and market expansion, especially in underrepresented regions.

• Combined group will be a top-2 player in both insurance and banking in Italy, with a diversified business model and enhanced distribution capabilities.

• Enhanced revenue base and predictable earnings profile, supporting domestic consolidation.

Financial impact and capital management

• BMPS entity acquired is profitable, with expected net income of €400–460m, CET1 ratio of 16%, and book value of €4bn.

• Combined group’s solvency ratio expected to remain above 200%, with insurance segment above 280% and banking CET1 ratio above 15%.

• Dividend floor raised to €930m from 2026 earnings (payable in 2027), with potential for €1bn+ annual payout post-integration, assuming a 50% payout ratio.

• Rights issue planned by year-end 2024 or 2026, with main cooperative shareholders committed to subscribing.