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 tax effect of up to €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 growth (+9.8%).

• Cost-to-income ratio improved to 46% in H1 2024 from 49% in H1 2023, reflecting effective cost management.

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

• CET1 fully loaded ratio at 18.1% as of June 2024, with a dividend payout ratio increased to 75%.

Financial highlights

• Net interest income for H1 2024 was €1,172 million (+8.3% YoY); fee income was €736 million (+9.8% YoY), with wealth management fees up 20%.

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

• Gross operating profit for H1 2024 was €1,106 million, up 18% year-over-year.

• Loan loss provisions remained stable at €204 million; cost of risk at 52 bps.

• Commercial savings grew by €6.5 billion YTD, including €2.7 billion in Q2.

Outlook and guidance

• The 2024-2028 plan targets pre-tax profit of €1.4 billion in 2026 and €1.7 billion in 2028.

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

• CET1 ratio projected to stay above 18% throughout the plan period.

• Dividend payout ratio set at 75% of pre-tax profit, supporting higher cash dividends.

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