Banca Sistema (BST) Q1 2025 earnings summary

Executive summary

• Revenues and total income grew 60% year-on-year, or 21% excluding late payment interest accruals tied to ECHR rulings, with adjusted interest income more than doubling due to wider asset spreads and lower funding costs.

• Net profit reached €11.6 million in Q1 2025, up €7.5 million year-on-year, with all divisions showing improved profitability and strong growth in factoring and collateralised lending.

• Pre-tax profit nearly tripled year-on-year to €19 million, and factoring net profit rose 64% year-on-year, pawnbroking net profit increased 250%, and the CQ division reduced its loss from €4.2 million to €2.8 million.

• Operating costs increased 9% year-on-year due to higher personnel and administrative expenses.

Financial highlights

• Total assets decreased 4% quarter-on-quarter, mainly due to lower financial portfolio and customer loans.

• Net interest income more than doubled to €24.5 million year-on-year; net fee and commission income fell 34% year-on-year due to non-recurrent large transactions in the prior year.

• Cost of risk rose to 57 basis points from 17 basis points a year ago, with impairment losses on loans at €3.7 million.

• Retail funding accounted for 75% of total funding, with term deposits up 2% quarter-on-quarter and 80% sourced from abroad.

• Superbonus trading income was €8.8 million, up over 100% year-on-year.

Outlook and guidance

• Adjusted income margin expected to remain robust and stable, with Q1 positively impacted by LPI accruals unlikely to repeat at the same magnitude.

• Management expects trends of lower funding costs and strong commercial performance to continue in 2025.

• Factoring outstanding expected to remain flat for the year, with more exposure to central government and less to NHS.

• Cost of funding targeted to average around 3% for 2025, improving from previous estimates.

• CQ division expected to remain loss-making in 2025, despite lower funding costs.