WEBVTT - UniCredit CEO Andrea Orcel Talks Commerzbank 0:00:02.360 --> 0:00:07.360 Bloomberg Audio Studios, Podcasts, radio News. I'll tak you back 0:00:07.400 --> 0:00:12.160 to DeVos. Francine has just sat down at the Bloomberg 0:00:12.240 --> 0:00:16.360 House in DeVos. She is sitting next to Unicredits CEO 0:00:16.520 --> 0:00:20.200 Andrea Orchell. Let's take a listen to their conversation. 0:00:21.079 --> 0:00:24.239 You're, of course the chief executive of Unicredits, and you're 0:00:24.280 --> 0:00:27.920 actually the busiest banker at the moment in Europe, trying 0:00:27.960 --> 0:00:31.280 to buy Italian Bank, trying to buy Commerce Bank. We'll 0:00:31.280 --> 0:00:33.080 get to that in a moment. But actually there's quite 0:00:33.080 --> 0:00:36.720 a lot of hope and expectations in the US that 0:00:37.000 --> 0:00:40.440 Donald Trump deregulates banks. How problematic is that for the 0:00:40.479 --> 0:00:42.800 European banking system, Well. 0:00:42.560 --> 0:00:43.520 It is problematic. 0:00:43.600 --> 0:00:46.080 I think there needs to be the right balance between 0:00:46.159 --> 0:00:50.080 regulation and ability to execute, our ability to operate. I 0:00:50.120 --> 0:00:53.519 think sometimes we lose sight of the fact that the 0:00:53.600 --> 0:00:56.040 business of bank is to manage risk. 0:00:56.560 --> 0:00:58.800 To manage risk well, but to manage risk. 0:00:58.880 --> 0:01:01.680 If we look at our clients and we say, well, 0:01:01.680 --> 0:01:03.320 we would like to help you, but we are taking 0:01:03.400 --> 0:01:07.000 risks zero and we are supporting you, You're going to 0:01:07.040 --> 0:01:08.679 look at us and say, well, hang on a second, 0:01:08.680 --> 0:01:09.600 what's your value added? 0:01:10.040 --> 0:01:12.000 So I think The management. 0:01:11.480 --> 0:01:14.400 Of risk is at the core of banks, and banks 0:01:14.480 --> 0:01:17.720 need to have the right controls, the right regulation, but 0:01:17.880 --> 0:01:20.640 need to be able to take that risk. So too 0:01:20.680 --> 0:01:24.679 much theregulation is not a good idea. Too much regulation 0:01:25.640 --> 0:01:28.840 is or too little regulation is also not a good idea. 0:01:28.880 --> 0:01:30.920 You need to find the right balance. At the moment. 0:01:30.959 --> 0:01:33.080 The expectation is that the US will be well ahead 0:01:33.080 --> 0:01:37.000 of Europe in terms of being less regulated, and given 0:01:37.040 --> 0:01:40.080 that US banks do operate in Europe, that will put 0:01:40.160 --> 0:01:42.120 us at a competitive disadvantage. 0:01:42.600 --> 0:01:44.880 Do you expect regulation We've seen that in the UK 0:01:45.160 --> 0:01:47.840 last week, to expect European regulation to just take a 0:01:47.920 --> 0:01:51.240 pause and wait to see what the US does well. 0:01:51.280 --> 0:01:53.520 For the time being, there is a lot of discussion 0:01:53.560 --> 0:01:58.560 about where regulation is going to go, But for the 0:01:58.640 --> 0:02:02.120 time being, the indications are that Europe will maintain its 0:02:02.160 --> 0:02:06.480 course on regulation and will maintain the position where it is. 0:02:07.160 --> 0:02:09.480 And I think to a certain extent, if this is 0:02:09.480 --> 0:02:13.480 a steady state, this is something that we can live 0:02:13.520 --> 0:02:16.720 with and that is correct. If it continues to tighten, 0:02:17.240 --> 0:02:18.960 then it becomes a difficulty. 0:02:19.320 --> 0:02:22.720 How worried are you about competitiveness in Europe? What does 0:02:23.120 --> 0:02:23.959 your clients tell you? 0:02:24.440 --> 0:02:27.640 Look I think more generally, if you look at Europe, 0:02:27.840 --> 0:02:31.640 Europe needs gross. I think we need to rethink what 0:02:31.720 --> 0:02:34.040 is the vision for Europe, what is the strategy for Europe? 0:02:34.040 --> 0:02:37.120 And we need gross. Without gross, we're staying behind. We 0:02:37.200 --> 0:02:40.320 already behind, is going to get even worse. And in 0:02:40.360 --> 0:02:42.959 a way, if you look at gross or industrial growth 0:02:43.160 --> 0:02:48.800 as a car, the banks and capital market unions are 0:02:48.840 --> 0:02:52.880 the gasoline of that car. We cannot finance that gross transformation, 0:02:53.600 --> 0:02:57.200 that economic policy that we want without that feed. 0:02:57.800 --> 0:03:01.399 So if banks are not strong. 0:03:01.200 --> 0:03:07.560 Enough, not big enough, or or overly stringently regulated, and 0:03:07.600 --> 0:03:09.680 we don't have a capital market union, we may have 0:03:09.800 --> 0:03:11.760 all the plans in this world, but we're not going 0:03:11.800 --> 0:03:14.560 to be able to finance them at the same time. 0:03:14.639 --> 0:03:17.680 And you see it in a number of economies in Europe. 0:03:18.360 --> 0:03:21.040 Banks from other economic blocks are coming in. 0:03:21.400 --> 0:03:22.480 And when we. 0:03:22.400 --> 0:03:26.880 Talk about competition in countries like Germany, we talk mostly 0:03:26.919 --> 0:03:31.600 about American banks and maybe one or two European banks 0:03:31.639 --> 0:03:34.800 that have an approach to Germany in a certain way, 0:03:34.960 --> 0:03:38.120 But the real competitors we fear are American banks. 0:03:38.520 --> 0:03:40.520 I know you have skin in the game, but why 0:03:40.560 --> 0:03:42.640 is it so difficult to have a capital markets union? 0:03:44.320 --> 0:03:47.880 I think that like everything in Europe, you know, I 0:03:47.920 --> 0:03:52.360 think we celebrate our differences, and I think this is important. 0:03:52.360 --> 0:03:55.640 And being Italian, I think when I go through Italy, 0:03:56.040 --> 0:03:58.960 I need to explain to people that what I get 0:03:59.000 --> 0:04:00.880 in Milan is different from what I get in Rome, 0:04:00.920 --> 0:04:02.080 from when I get in Palermo. 0:04:02.160 --> 0:04:03.880 And they all have different. 0:04:03.640 --> 0:04:06.640 Views and they're very happy to tell you why they're better. 0:04:08.360 --> 0:04:12.400 So it happens in every country, it happens across Europe, 0:04:12.440 --> 0:04:14.240 and I think that's one of our strengths. But I 0:04:14.240 --> 0:04:18.360 think our biggest weakness is we're not capable to say, well, 0:04:18.400 --> 0:04:21.560 these five things we're going to put to common denominator 0:04:21.600 --> 0:04:25.880 because we can benefit more from doing it together than separately. 0:04:26.520 --> 0:04:29.720 And therefore you have all the regulation all these schemes, 0:04:30.080 --> 0:04:34.800 but they are always flexibility for each single state to 0:04:35.720 --> 0:04:39.080 implement them or not, and it always ends up being 0:04:39.160 --> 0:04:42.120 that on one or the other, a part of the 0:04:42.160 --> 0:04:46.160 European members implement and a part did not, and therefore 0:04:46.160 --> 0:04:49.080 we continue to have fragmentation and inability to. 0:04:50.640 --> 0:04:52.760 Build industries that go across Europe. 0:04:53.000 --> 0:04:55.000 So someone who I know is watching on air asked 0:04:55.040 --> 0:04:57.839 me yesterday what Andrew Rochelle is like and I just said, 0:04:58.120 --> 0:05:02.280 he's bold. You're surprised investors really shocked governments by buying 0:05:02.279 --> 0:05:04.839 a big stake in Commerce Bank and offering to buy 0:05:04.839 --> 0:05:07.440 Bunko BPM in Italy. What do you want to achieve 0:05:07.480 --> 0:05:09.200 and how fast do you want to achieve it? 0:05:09.760 --> 0:05:14.599 Well, I think it's a little bit a connecting of 0:05:14.920 --> 0:05:20.320 opportunity with interest if you look at UNI Credit. Actually, 0:05:20.320 --> 0:05:22.680 I was being criticized for three and a half years 0:05:22.760 --> 0:05:27.080 for not engaging in Animine because I thought firmly that 0:05:27.240 --> 0:05:31.719 the bank required setting back on the right tone, unlocking 0:05:32.520 --> 0:05:35.640 releasing trap potential, and we always said that at the 0:05:35.720 --> 0:05:37.600 right time, at the right terms, we would look at it. 0:05:37.680 --> 0:05:40.040 If you look at the key markets for US where 0:05:40.040 --> 0:05:41.640 we can do an. 0:05:41.520 --> 0:05:44.880 In market merger, strengthen the group and move the dial 0:05:45.000 --> 0:05:48.640 very significantly, you get Italy, you get. 0:05:48.480 --> 0:05:51.360 Germany and not really in. 0:05:51.360 --> 0:05:54.640 Market, but for our CEE you get Poland. And it 0:05:54.839 --> 0:05:57.800 just happened that the opportunity to do something in those 0:05:57.839 --> 0:06:01.760 three market came relatively at the same time. It also 0:06:01.839 --> 0:06:06.040 happened that we are exiting three years of transformation. We 0:06:06.080 --> 0:06:08.919 feel we are more ready than ever to do the 0:06:08.960 --> 0:06:12.200 next three years with even greater success. But at the 0:06:12.200 --> 0:06:14.280 same time, we have a team that has shown they 0:06:14.279 --> 0:06:17.920 are capable and that is capable of integrating and capable 0:06:18.040 --> 0:06:22.120 of accelerating what we can do alone with this acquisition, 0:06:22.200 --> 0:06:24.159 and if we do them, great, and if we don't, 0:06:24.279 --> 0:06:25.040 we will have tried. 0:06:25.080 --> 0:06:28.000 At least your moves have irritated governments in Germany and 0:06:28.040 --> 0:06:30.400 it did you predict the backlash? 0:06:30.880 --> 0:06:32.320 No, especially in Germany. 0:06:32.480 --> 0:06:34.880 I think there has been a lot of debate on that, 0:06:35.040 --> 0:06:37.360 but honestly, we struggle. 0:06:37.480 --> 0:06:40.000 I struggle to see what the debate is based on. 0:06:41.640 --> 0:06:45.080 I think beyond the fact that HVB and Commerce Bank 0:06:45.120 --> 0:06:47.760 have been talking to each other in bus direction for 0:06:47.800 --> 0:06:50.479 over twenty years, because it's a it's one of those 0:06:50.480 --> 0:06:52.440 deals that you always want to do. We can it 0:06:52.480 --> 0:06:55.120 makes a ton of sense, but for some reason it's 0:06:55.160 --> 0:06:57.960 always derailed. In the last two and a half, we 0:06:58.040 --> 0:07:01.680 probably have had and I probably have had meetings with 0:07:01.720 --> 0:07:05.080 both leadership of the government and leadership of the Commerce Bank. 0:07:05.120 --> 0:07:08.280 In the tents, we both a four and a half 0:07:08.320 --> 0:07:11.000 percent stake in anticipation that the government would sell Verse 0:07:11.000 --> 0:07:12.720 sixteen and a half, and we wanted to be at 0:07:12.760 --> 0:07:17.120 a level of consolidation. We clearly we were invited actually 0:07:17.120 --> 0:07:20.400 by the government as the only strategic to buy their 0:07:20.440 --> 0:07:22.320 stake the first seal down at four and a half. 0:07:22.360 --> 0:07:25.280 We did that in a transparent process. Actually we were 0:07:25.320 --> 0:07:27.800 asked to we were the best bid, and we were 0:07:27.840 --> 0:07:30.560 asked to bid again at a premium to what we 0:07:30.600 --> 0:07:33.600 had offered in order to get the entire stake. We 0:07:33.640 --> 0:07:37.960 agreed on a press release. During that process, we interacted 0:07:38.000 --> 0:07:40.280 again with a leadership of Commerce Bank, warning them but 0:07:40.360 --> 0:07:43.679 we were going to participate. Commerce Bank was the first 0:07:43.760 --> 0:07:46.440 call we had in the morning to debrief from where 0:07:46.480 --> 0:07:50.400 we were and from there it moved to surprise, well 0:07:50.520 --> 0:07:56.960 imagine hours, and then it moved to hostility or to opaqueness. Well, 0:07:57.200 --> 0:07:59.800 from the first day when we both and we mean 0:08:00.120 --> 0:08:02.960 Finance was well aware, we said we would ask authorization 0:08:03.080 --> 0:08:04.240 to go to twenty nine to nine. 0:08:04.920 --> 0:08:08.680 We did and we executed that. What we changed was 0:08:08.720 --> 0:08:11.040 because out of respect of both. 0:08:10.920 --> 0:08:15.320 The government and the Commerce Bank, we said, well, given 0:08:15.360 --> 0:08:18.000 that the emotions are what they are, let's wait for elections, 0:08:18.880 --> 0:08:21.559 Let's wait for things to come down, and then let's 0:08:21.560 --> 0:08:28.160 have an opportunity to instead of talk about perceptions, talk 0:08:28.160 --> 0:08:30.720 about facts, talk about figures, talk about the merit of 0:08:30.760 --> 0:08:33.680 the deal, the red lines and in front one in 0:08:33.679 --> 0:08:35.239 front of the other, tried. 0:08:34.960 --> 0:08:37.000 To see if there is a base to move forward 0:08:37.160 --> 0:08:37.439 or not. 0:08:38.080 --> 0:08:39.920 At the end of a dafferen scene for us, I 0:08:39.960 --> 0:08:42.880 would say it's a statement for Germany. We're trying to 0:08:42.920 --> 0:08:45.920 invest in excess of twenty billion into Germany at this point, 0:08:45.960 --> 0:08:46.760 and I think. 0:08:46.600 --> 0:08:47.320 That says it all. 0:08:47.920 --> 0:08:51.000 So when people say you're untrustworthy or not transparent. 0:08:50.600 --> 0:08:54.480 Enough, well, you know, there were other things that I 0:08:54.520 --> 0:08:57.679 was told in the past and now have been superseded 0:08:57.720 --> 0:09:02.000 by facts and over time. I really on this time. 0:09:02.960 --> 0:09:07.120 While I could even say that my own government could 0:09:07.200 --> 0:09:11.000 have been surprised at our move I cannot say that 0:09:11.920 --> 0:09:15.960 German government and Commerce Bank have a base for these allegations. 0:09:16.080 --> 0:09:18.640 I mean Jemuary twenty third is when there's the German elections. 0:09:18.640 --> 0:09:20.600 Do you expect something to change for you? 0:09:20.640 --> 0:09:23.840 Then, well, I don't know what I think will change 0:09:24.040 --> 0:09:27.520 or I hope will change. Is an opportunity to invest 0:09:28.320 --> 0:09:32.240 instead of focusing on perception of what we might do, 0:09:34.120 --> 0:09:39.800 you know, criticisms based on many times bias and other 0:09:39.920 --> 0:09:42.440 expectation of the past. That we can sit around the 0:09:42.440 --> 0:09:46.520 table and you know, compare notes. I do think that 0:09:47.200 --> 0:09:51.280 the transaction, if we go back on that, it's excellent 0:09:51.320 --> 0:09:54.520 for Germany. Over the last four years I chaired the 0:09:54.600 --> 0:09:57.840 supervisory board of HBB, and I got to a great 0:09:57.880 --> 0:10:00.640 conviction that Germany has first of all, that Europe does 0:10:00.640 --> 0:10:03.520 not exist without Germany, and secondly that there was a 0:10:03.520 --> 0:10:07.280 great opportunity. So the two banks are very complementary. There 0:10:07.320 --> 0:10:09.080 is a lot of value to be created, and not 0:10:09.160 --> 0:10:12.520 only for shareholders, I think for clients where we could 0:10:12.600 --> 0:10:17.120 compete in a better way versus both local and foreign competitors, 0:10:17.600 --> 0:10:22.960 and for the people of both banks. So in our book, 0:10:23.640 --> 0:10:26.760 sitting down and saying what is it exactly. 0:10:26.440 --> 0:10:28.600 That is wrong with this deal, and what is. 0:10:28.559 --> 0:10:31.600 It exactly you do not like, and how can we 0:10:31.640 --> 0:10:34.720 eliminate that from the table and get to an agreement 0:10:34.920 --> 0:10:38.720 that process that we haven't had an opportunity to go through, 0:10:38.800 --> 0:10:41.280 not with the government and not with Commerce Bank. And 0:10:41.320 --> 0:10:44.480 it's not for not asking. I think I either met 0:10:45.520 --> 0:10:48.080 or wrote a letter to every party leader in Germany 0:10:48.080 --> 0:10:51.680 explaining where we are. And I do realize that in 0:10:51.720 --> 0:10:54.480 the middle of election it's not the right time. And 0:10:54.520 --> 0:10:56.920 I also do realize that until this is settled, it 0:10:57.000 --> 0:11:00.640 is also different difficult from commerce bank to engage. The 0:11:00.679 --> 0:11:03.080 biggest thing that I have that I hope to get. 0:11:02.960 --> 0:11:06.839 From election is an ability to interact. What can you 0:11:06.880 --> 0:11:08.120 tell us about job losses? 0:11:08.320 --> 0:11:09.760 I mean, I know this is one of the worries 0:11:09.760 --> 0:11:12.960 in Germany and we're expecting also an update from cost February. 0:11:12.960 --> 0:11:15.319 There is a lot of expectation and a lot of 0:11:15.440 --> 0:11:21.160 allegation on what would occur from a combination that has 0:11:21.280 --> 0:11:24.719 not been offered yet because we haven't sat down. So 0:11:24.800 --> 0:11:26.360 but if you look at uniqu credit in the last 0:11:26.400 --> 0:11:29.000 three years, we did acceed quite a few people. I 0:11:29.000 --> 0:11:30.880 don't think you have ever read in the press, not 0:11:30.960 --> 0:11:33.560 in Italy, not in Germany, not in any of our markets. 0:11:33.600 --> 0:11:35.400 But we did that in a way that the worker's 0:11:35.440 --> 0:11:38.160 Counsel of the trade unions were against. That means we 0:11:38.280 --> 0:11:41.400 found a way that was shared to reach it. I 0:11:41.400 --> 0:11:45.320 think everybody focused on job losses, but we start before 0:11:45.360 --> 0:11:48.080 at the origin. What is the vision for this bank, 0:11:48.320 --> 0:11:50.199 What is the strategy for this bank? What are we 0:11:50.280 --> 0:11:54.160 trying to achieve? Efficiencies in the industry are a matter 0:11:54.840 --> 0:11:57.959 that needs to occur. But at the same time, if 0:11:58.000 --> 0:12:01.280 I take unique credit in the last three years, we 0:12:01.400 --> 0:12:05.200 probably reduce costs by one and a half billion, but 0:12:05.280 --> 0:12:10.040 we reinvested in the business through upgrade or our physical network, 0:12:10.920 --> 0:12:18.120 digital data, our factories, hiring new people, training new people, 0:12:18.200 --> 0:12:22.080 our university a billion two. So it's not only about 0:12:22.160 --> 0:12:26.360 we made efficiencies, but we actually reinvested the large majority 0:12:26.360 --> 0:12:29.600 of pose efficiency into the banks, which then brings us 0:12:30.080 --> 0:12:34.079 to number one, having the people of unique credit behind 0:12:34.120 --> 0:12:36.200 it because they say, well, I understand what we're trying 0:12:36.240 --> 0:12:38.760 to do and where the money that we're saving is going. 0:12:39.280 --> 0:12:44.079 And secondly, it brings us to being in a really 0:12:44.120 --> 0:12:46.600 strong position now to address the next three years that 0:12:46.640 --> 0:12:47.720 are going to be quite challenging. 0:12:48.160 --> 0:12:50.880 So we sometimes play this game in the newsroom of 0:12:50.920 --> 0:12:52.720 whose job would you not want to have right now? 0:12:52.760 --> 0:12:54.360 And I think it'd be your M and a advisor. 0:12:57.200 --> 0:12:59.600 Are you ready to walk away from the deal? 0:13:00.520 --> 0:13:01.240 Yes, of course. 0:13:01.320 --> 0:13:08.160 I mean we implicitly walked away from deals in the 0:13:08.200 --> 0:13:12.520 past several times. So we walked away from Montelebaski. There 0:13:12.720 --> 0:13:15.880 was a leak last time we tried to approach BPM, 0:13:16.000 --> 0:13:19.280 and we walked away. Second time, there was another leak 0:13:19.440 --> 0:13:22.160 that pretended obviously it was not very advanced that we 0:13:22.160 --> 0:13:23.839 were going to do something with Commerceman. 0:13:23.880 --> 0:13:25.200 We walked away from that as well. 0:13:25.760 --> 0:13:29.480 So I do think that maybe for us, or for 0:13:29.600 --> 0:13:33.480 me in particular, there was the never ending story does 0:13:33.600 --> 0:13:35.319 mena at value or does amina. 0:13:35.160 --> 0:13:35.880 Not at value? 0:13:36.440 --> 0:13:39.200 And I think MENA adds value if it's done at 0:13:39.200 --> 0:13:41.760 the right terms, at the right time, in the right way. 0:13:42.120 --> 0:13:43.560 Otherwise stay away from it. 0:13:44.080 --> 0:13:48.240 For us, we have an exciting proposition at Unique Credit. 0:13:48.480 --> 0:13:51.680 I think for us demonstrating what we can do in 0:13:51.679 --> 0:13:54.960 the next three years, demonstrating that not only we can 0:13:56.120 --> 0:13:58.600 continue to deliver at the level we were delivering where 0:13:58.679 --> 0:14:02.200 people say European banks are over earnings, but actually add 0:14:02.240 --> 0:14:05.200 a billion on top to that and improve the profitability 0:14:05.480 --> 0:14:05.920 for that. 0:14:05.920 --> 0:14:07.400 That is the exciting venture. 0:14:08.200 --> 0:14:11.120 If on top of that, given that we have confidence 0:14:11.120 --> 0:14:15.640 in what we can do, we can do acquisition at 0:14:15.640 --> 0:14:18.960 the right terms, integrate them and further accelerate what the 0:14:19.000 --> 0:14:21.000 potential we have not only for us but also for 0:14:21.080 --> 0:14:25.920 the targets great And if not, I honestly think that 0:14:26.000 --> 0:14:27.840 if I take the next three to five years and 0:14:27.880 --> 0:14:31.160 I compare the prospects at uniqu Credit has given the 0:14:31.200 --> 0:14:34.400 transformation and the investment with those of the average bank 0:14:34.440 --> 0:14:37.840 in Europe. We have no pressure in wanting to do 0:14:37.880 --> 0:14:40.240 anything because we will have great results. 0:14:40.360 --> 0:14:43.360 Okay, let's talk about Banko BPM. A lot of investors say, 0:14:43.360 --> 0:14:45.240 your offers too low, can you increase? 0:14:45.960 --> 0:14:49.320 Well, let's put it this way. Let's put it this way. 0:14:49.720 --> 0:14:53.080 It's like starting with job losses as opposed to the 0:14:53.120 --> 0:14:57.520 outcome of figs. I would say the following our offer 0:14:57.560 --> 0:15:01.480 on BPM is at a depending how you calculate fifteen 0:15:01.520 --> 0:15:05.120 to twenty percent premium to where the bank was trading 0:15:05.120 --> 0:15:07.400 a month prior, what you would call an m and 0:15:07.400 --> 0:15:10.840 a undisturbed price. What happened in that month is that 0:15:10.960 --> 0:15:14.400 they announced a bid for anima where the market reacted 0:15:14.400 --> 0:15:17.200 positively on the transaction and assumed that it could be 0:15:17.280 --> 0:15:19.080 done at that price in full. 0:15:19.600 --> 0:15:22.520 Well. Already yesterday there were rumors. 0:15:22.440 --> 0:15:24.640 That they may not get the datish compromise, and if 0:15:24.640 --> 0:15:28.320 they don't, that transaction may not occur or may not 0:15:28.320 --> 0:15:31.160 occur in full. If that is the case, on the 0:15:31.240 --> 0:15:34.440 day jumped ten percent and over a period fifteen percent. 0:15:34.680 --> 0:15:37.880 Should I pay a premium over that? The second thing 0:15:38.000 --> 0:15:40.600 is straight after that, there were a lot of speculation 0:15:41.240 --> 0:15:45.560 of a merger with Monte Pascualiena, and again the share 0:15:45.600 --> 0:15:49.000 price took another five percent, So again that merger is 0:15:49.040 --> 0:15:51.200 not occurring for the moment, and should I pay a 0:15:51.280 --> 0:15:54.240 premium on that? Again, so if you look at undisturbed price, 0:15:54.280 --> 0:15:56.720 we have fifteen twenty percent. Is that we think it's 0:15:56.760 --> 0:16:00.240 a fair starting point, especially because when you look at 0:16:00.280 --> 0:16:04.520 they're multiple versus ours and our resilience versus ours. We 0:16:04.680 --> 0:16:09.840 think we are significantly undervalued and they are probably fairly 0:16:10.000 --> 0:16:14.600 or overvalued. We'll see, we'll see. In any case, it's premature. 0:16:15.000 --> 0:16:18.560 I think let's see how banks perform in Q one, 0:16:19.120 --> 0:16:22.000 in Q two, let's see if anima is done or not. 0:16:22.400 --> 0:16:25.960 Let's see a number of other topic. But at the moment, 0:16:26.040 --> 0:16:29.400 we stand firm on our offer and we think it's appropriate. 0:16:29.560 --> 0:16:31.400 Okay, the million dollar Are you meeting with the Credit 0:16:31.440 --> 0:16:34.640 agricoll CEO and Davos because there's so I know a 0:16:34.640 --> 0:16:37.640 lot of you actually follow banks very closely, but Credit 0:16:37.640 --> 0:16:40.240 AGREU CALL controls fifteen percent of Bank of BPM and 0:16:40.280 --> 0:16:44.120 there's also distribution agreement right through its anc Mantra mundi, 0:16:44.200 --> 0:16:45.560 so you really need them on board. 0:16:46.280 --> 0:16:49.800 I think, Look, there's a lot of speculation on Kariaka. 0:16:50.240 --> 0:16:53.280 I would say the following very key partners of ours. 0:16:54.160 --> 0:16:59.040 We we account for probably seventy or eighty percent of 0:16:59.080 --> 0:17:02.440 our investment and go through a MUNDI In Italy we 0:17:02.520 --> 0:17:05.879 have a contract with them. The contract ends in twenty seven. 0:17:06.480 --> 0:17:09.760 We also do custom deal with them in Germany we 0:17:09.960 --> 0:17:13.520 work with them. Between our factories and their investment bank 0:17:13.600 --> 0:17:16.000 are quite tight. We do a number of things together, 0:17:16.080 --> 0:17:17.680 so we didn't. 0:17:17.359 --> 0:17:18.080 Need to wait for. 0:17:19.600 --> 0:17:22.520 BPM to talk to each other. There have been continuous 0:17:22.520 --> 0:17:25.080 dialogue in the last three years. I think we have 0:17:25.119 --> 0:17:26.760 a lot of point of contacts and a lot of 0:17:26.800 --> 0:17:31.200 common interest. If you ask me whether I am optimistic 0:17:31.400 --> 0:17:35.640 on finding a solution that is respectful of the part 0:17:35.720 --> 0:17:39.080 condisho for all the shareholders of BPM, that works for 0:17:39.119 --> 0:17:42.160 both banks, I'm optimistic, but at this point in time 0:17:42.160 --> 0:17:42.919 it's premature. 0:17:43.240 --> 0:17:46.399 Are you optimistic about the Italian government getting. 0:17:46.119 --> 0:17:46.720 Behind the deal? 0:17:47.200 --> 0:17:49.680 Well, I think, as you know, every time, and we've 0:17:49.720 --> 0:17:52.240 had this discussion over the years. Every time you touch 0:17:52.280 --> 0:17:58.960 a bank, everybody has an opinion, and I do think 0:17:59.000 --> 0:18:02.440 that you know, it is fair enough that they want 0:18:02.520 --> 0:18:05.600 to determine the level of competition. 0:18:07.280 --> 0:18:10.080 What will happen next? Because we would become. 0:18:10.480 --> 0:18:13.040 Quite a large institution in Italy. We would have fifteen 0:18:13.040 --> 0:18:17.160 percent of the market. Actually because of our overall size. 0:18:17.200 --> 0:18:19.400 People forget that in Italy we only have a nine 0:18:19.400 --> 0:18:23.760 percent market share in loans and deposit, So we would 0:18:23.760 --> 0:18:25.639 go to fifteen. We would be a strong number two 0:18:25.680 --> 0:18:28.639 twin TASA. But I think it's fair enough that we 0:18:28.760 --> 0:18:34.080 want to make sure that competition remain, you know, commitment 0:18:34.160 --> 0:18:40.359 to the Italian middle stunt remains. You know, branches are 0:18:40.480 --> 0:18:43.600 kept open in the areas of Italy that are more remote, 0:18:43.640 --> 0:18:48.080 and we're well, but these are all things that it's 0:18:48.160 --> 0:18:50.720 not a concession. We're determined to do and that's why 0:18:50.760 --> 0:18:53.919 we're buying the bank so very again, we take the 0:18:54.000 --> 0:18:57.920 course of the so called golden power as an opportunity 0:18:57.960 --> 0:19:01.320 to sit down and it's quite structed and to highlight 0:19:01.960 --> 0:19:04.399 all of the elements, and I'm actually quite optimistic that 0:19:04.440 --> 0:19:05.119 we will convince it. 0:19:05.320 --> 0:19:08.040 But golden power is basically a veto which they're trying 0:19:08.080 --> 0:19:11.000 to play. If they put that, do you walk away 0:19:11.600 --> 0:19:11.919 that deal? 0:19:12.160 --> 0:19:15.320 Well, you know, I think the golden power is if 0:19:15.320 --> 0:19:18.000 they were to apply it, that is not just I 0:19:18.080 --> 0:19:21.320 have an I have I can decide whether to play 0:19:21.400 --> 0:19:24.560 or not to play. But I do think honestly that 0:19:24.760 --> 0:19:27.159 if we put aside all the speculation of the press, 0:19:27.880 --> 0:19:31.120 the process is a lot more technical and constructive. And 0:19:32.240 --> 0:19:34.359 I would say for now I can only say fair 0:19:34.920 --> 0:19:35.919 when people make it to be. 0:19:37.119 --> 0:19:40.560 If your legacy is not buying these you know banks, 0:19:41.040 --> 0:19:42.840 do you worry if you fail at buying this? 0:19:42.960 --> 0:19:47.520 Or is there I think one of the biggest I 0:19:47.520 --> 0:19:50.280 think one of the biggest problems in M and A 0:19:50.720 --> 0:19:57.000 is that not buying equal failure. And I don't know, 0:19:57.040 --> 0:19:59.399 I don't see it like that. I think is buying 0:19:59.400 --> 0:20:03.040 at the right ters mean success. Not buying at the 0:20:03.080 --> 0:20:04.760 wrong terms mean less. 0:20:04.600 --> 0:20:06.160 A success, but still success. 0:20:06.520 --> 0:20:10.000 Buying at the wrong terms means deep in success. So 0:20:10.240 --> 0:20:14.639 for me, if the walk away is because the terms 0:20:14.640 --> 0:20:18.639 are not there, or because we're not accepted, or because 0:20:18.640 --> 0:20:25.240 shareholders decide not to move, fine, as I said, I think, 0:20:25.840 --> 0:20:29.359 I'm just We're already touring all the banks of a 0:20:29.400 --> 0:20:33.960 group with them three at the moment, and the view 0:20:34.000 --> 0:20:37.240 that we have on our opportunity this year is quite optimistic. 0:20:38.440 --> 0:20:41.360 As I said yesterday to our townhold in Germany, it's 0:20:41.400 --> 0:20:43.840 the first time that I but in January I see 0:20:43.920 --> 0:20:46.240 smiles when I go around, and you never know fits 0:20:46.280 --> 0:20:49.879 because they just ended the holidays, or because they're very 0:20:49.880 --> 0:20:53.000 optimistic about what we're doing. But going back on that, 0:20:54.200 --> 0:20:57.479 I think, to quote Warren Buffett, it is when the 0:20:57.480 --> 0:21:00.800 tide goes down that you see who's wearing trunks. And 0:21:00.880 --> 0:21:04.800 I think we have been talking about higher rates, low 0:21:04.840 --> 0:21:08.200 cost of risk, and inflation, and in the next three 0:21:08.240 --> 0:21:12.200 years it goes exactly in the opposite way. Lower rates, 0:21:12.400 --> 0:21:15.720 high cost of risk, higher inflation. This is the tide 0:21:15.800 --> 0:21:19.679 going down. I think every bank is stelling youth I 0:21:19.720 --> 0:21:20.720 have it all figured out. 0:21:21.600 --> 0:21:22.280 I don't think so. 0:21:22.400 --> 0:21:25.399 I think there will be a big divergence between banks 0:21:25.400 --> 0:21:29.040 that have it figured out, have transformed, have lines of defense, 0:21:29.480 --> 0:21:32.879 have levers to upset and grow, and banks who have 0:21:33.040 --> 0:21:36.480 instead spent the last three or four years squeezing the 0:21:36.560 --> 0:21:39.040 lemon and taking it the most we could do. And 0:21:39.119 --> 0:21:41.800