Banca Monte dei Paschi di Siena (BMPS) Q3 2024 earnings summary

Executive summary

• Net profit for the first nine months of 2024 reached €1,566 million, up 68.6% year-over-year, with Q3 net profit at €407 million, reflecting strong operational performance and a positive tax impact.

• Gross operating profit for 9M 2024 was €1,645 million, up 13.7% year-over-year, driven by revenue growth and effective cost management.

• Total commercial savings increased by €5.8 billion since the start of the year, with a strategic shift toward asset management.

• Fully loaded CET1 ratio improved to 18.3%, including Q3 profit after dividends, with a 75% payout ratio.

• Cost/income ratio improved to 46% from 48% a year earlier.

Financial highlights

• Total revenues for 9M 2024 were €3,037 million, up 8.3% year-over-year, with net interest income up 4.7% to €1,768 million and net fee and commission income up 10.7% to €1,092 million, driven by wealth management and advisory activities.

• Operating expenses rose 2.5% year-over-year to €1,392 million, mainly due to higher HR costs (+6.9%) from the new labor contract, partially offset by a 4.9% reduction in non-HR costs.

• Loan loss provisions for 9M 2024 were €300 million, slightly down from €307 million in the same period last year, with cost of risk at 52 bps.

• Pre-tax profit for 9M 2024 was €1,096 million, up 18.9% year-over-year.

• Basic and diluted EPS for 9M 2024 were €1.243, up 68.6% year-over-year.

Outlook and guidance

• Pre-tax profit guidance for 2024 raised from €1.3 billion to €1.4 billion, reflecting strong performance and confidence in Q4 trends.

• Expectation to maintain strong fee and commission growth to offset anticipated decline in net interest income in 2025 due to lower interest rates.

• Focus on asset mix changes and targeted lending in energy, agri-food, and consumer lending to support revenue.

• Operating expenses will be contained through ongoing cost-saving actions, despite inflation and contract renewals.

• Cost of risk in 2024 projected to remain similar to 2023, with capital position expected to stay high.