Banca Monte dei Paschi di Siena (BMPS) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached €1,159 million, up 87.3% year-over-year, with Q2 profit at €827 million, boosted by a positive net tax effect of €450–457 million.

• Total revenues for H1 2024 were €2,031 million, up 9.7% year-over-year, driven by net interest income (+8.3%) and fee income (+9.8%).

• Gross operating profit rose 18% year-over-year, surpassing €1.1 billion, supported by effective cost management.

• Cost/income ratio improved to 46% in H1 2024 from 49% in H1 2023.

• The Board approved a new 2024-2028 business plan focused on customer-centricity, digital transformation, and sustainable value creation.

Financial highlights

• Net interest income for H1 2024 was €1,172 million (+8.3% YoY); net fee and commission income was €736 million (+9.8% YoY).

• Operating expenses rose 1.2% year-over-year to €925 million, with HR costs up 5.9% and non-HR costs down 6.7%.

• Cost of risk at 52 bps for H1 2024, with loan loss provisions stable at €204 million.

• Fully loaded CET1 ratio at 18.1% as of June 2024; total capital ratio at 21.4%.

• Liquidity ratios strong: LCR at 164%, NSFR at 134%, counterbalancing capacity above €33 billion.

Outlook and guidance

• The 2024-2028 plan targets pre-tax profit of €1.4 billion in 2026 and €1.7 billion in 2028, with CET1 ratio projected to remain above 18%.

• Cost/income ratio expected to stay around 50%; cost of risk to decline to 34 bps by 2028.

• Fee and commission income to increase by €260 million by 2028, mainly from wealth management.

• Dividend payout ratio raised to 75% of pre-tax profit, with projected distributions of €1.9 billion from 2024 to 2026.

• Revenue growth to be driven by wealth management, digital transformation, and enhanced risk management.