2Q26E and M&A update: stick to UCG and BPE

Research evidence excerpt

2Q26E and M&A update: stick to UCG and BPE

Idea

July 13, 2026 06:46 AM GMT

Morgan Stanley & Co. International plc+MItalian Banks | Europe Noemi Peruch

Equity Analyst

2Q26E and M&A update: stick Noemi.Peruch@morganstanley.com +44 20 7677-3163

Banks

Europe

Industry View Attractiveto UCG and BPE

We see Q2 as a solid quarter, as we position ahead of consensus,

mainly on NII and costs, for all names. We rerun the EPS and

CET1 sensitivity for UCG and BPER on M&A and reiterate

Overweight on both names.

Into Q1: We are 5% ahead of VA consensus on core earnings and CET1 ratio for

BMPS, while we expect a beat to core PPP for BAMI, ISP, UCG and BPER in the low-

single-digits. We are constructive on BPER on the business plan and M&A

optionality provided by SBB and TRS. We expect UCG to print a good quarter on

capital and growth, and continue to see value on a standalone basis and via

inorganic growth optionality, in spite of a likely transitional period ahead.

UCG (OW): We are 2% above company consensus on Core PPP, driven by NII and

loan growth (projected better than the system in Italy and Germany). We see the

CET1 ratio at 14.5%, 20bp ahead of company consensus, thanks to TOCI reserve/

DTA.

Exhibit 1: Yet, we believe the main topic will be CBK and the

CBK tender offer results tender offer, which has enabled UCG to reach a

08/07/2026 excl. Treasury shares incl. Treasury shares

Cash stake 27.9 26.8 46.3% stake in CBK in physical stake (excl. treasury

Shares tendered 18.4 17.6

TRS (cash) 12.0 11.5

TRS (physical) 3.4 3.2 shares). In our view, this could trigger the full

Total 61.6 59.1

Total ex TRS 46.3 44.4

Total ex cash TRS 49.7 47.6 consolidation, as UCG exceeded the 42% attendance

Source: Company data, Morgan Stanley at the latest CBK AGM, and could gain control of the