Banca Sistema (BST) Q3 2024 earnings summary

Executive summary

• Revenues and total income grew 19% year-on-year, driven by strong factoring and pawn/collateralised lending growth, with adjusted net interest income up 11% to €55.7 million.

• Adjusted pretax profit reached €26.2 million (+37% y/y), and adjusted net profit was €15.8 million (+27% y/y), while consolidated profit for the first nine months was €12.3 million (+8.5% y/y).

• Factoring turnover rose 12% to €4 billion, pawn loans outstanding increased 9% to €128 million, and CQ loan turnover grew 16% y/y, though CQ outstanding declined 10%.

• Retail funding comprised 69% of total funding, with total assets up 9% y/y to €4.8 billion.

• The 2024-2026 Strategic Plan focuses on consolidating factoring leadership, expanding collateralised lending, and transforming the CQ division.

Financial highlights

• Total assets grew 9% y/y to €4.8 billion, supported by an expanded government bond portfolio.

• CET1 ratio (fully loaded) at 12.8–12.9%, total capital ratio at 15.7–15.9%, both above regulatory requirements.

• Cost of funding at 3.59–3.6% in Q3, up 91 bps y/y, with cost of risk at 20 bps and expected to rise to 25 bps in 2024.

• Operating costs increased 17.6–18% y/y to €58.9 million, mainly due to early DGS/interbank fund charges.

• Factoring net profit up 31% y/y to €23.2 million; pawn broking net income up 63% y/y to €2 million; CQ division posted a net loss.

Outlook and guidance

• Funding cost for Q4 expected below 3.5%, with 2024 average at 3.6%; further declines projected for 2025–2026.

• Factoring expected to maintain turnover trends, with Superbonus trading income peaking in 2024 and declining thereafter.

• CQ portfolio to continue shrinking, with profitability expected to improve as legacy assets expire.

• Portugal pawnbroking acquisition expected to contribute over €1 million to net income in 2025.