Banca Monte dei Paschi di Siena (BMPS) Q1 2025 earnings summary

Executive summary

• Net profit for Q1 2025 reached EUR 413 million, up 24.2% year-over-year and 7.3% sequentially, driven by strong fee and commission growth, cost optimization, and lower credit costs, despite a decline in net interest income due to lower rates.

• Fully loaded CET1 ratio rose to a record 19.6%, with a capital buffer of approximately 890 basis points above Tier 1 requirements, among the highest in Europe.

• Total revenues were EUR 1,007 million, nearly flat year-over-year (-0.5%) but up 1.1% sequentially, as higher fees offset lower net interest income.

• The bank is advancing its public exchange offer for Mediobanca, aiming to create Italy's third major financial institution, with strong shareholder support and expected regulatory approvals by June or July.

• Commercial performance was robust: total commercial savings up over EUR 5 billion year-over-year, wealth management gross inflows up 22%, new retail mortgages more than tripled, and consumer finance flows up 23%.

Financial highlights

• Net interest income fell 7.5% year-over-year to EUR 543 million, reflecting lower rates, but net fee and commission income rose 8.9% to EUR 398 million, driven by wealth management and advisory.

• Operating expenses increased 2.2% year-over-year to EUR 472 million, mainly due to higher personnel costs from labor contract renewals, but down 1% quarter on quarter.

• Cost/income ratio improved to 46.9% from 48% in the previous quarter.

• Gross NPE ratio at 4.4%, net NPE ratio at 2.3%, with NPE coverage at 49.5%.

• LCR at 156% and NSFR at 130%, indicating a strong liquidity position, with ECB funding reduced to 6% of liabilities.

Outlook and guidance

• 2025 pre-tax profit is expected to be higher year-over-year, with further growth anticipated in 2026, exceeding previous business plan targets.

• Net interest income is expected to remain under pressure due to lower rates, while fee and commission growth, especially in wealth management, is anticipated to continue supporting revenues.

• Operational efficiency improvements are ongoing, with a cost/income ratio target path below 47%.

• Credit costs are expected to remain contained, and capital ratios are forecast to stay at high levels.

• Mediobanca Exchange Offer progressing on schedule, with regulatory approvals anticipated by June/July and subsequent launch of the offer period.