Banca Sistema (BST) Q3 2025 earnings summary

Executive summary

• Net profit for the first nine months of 2025 rose 71% year-on-year to €21 million, driven by a 25% increase in total income and strong operational efficiency.

• Adjusted net interest income increased 28% year-on-year, supported by lower funding costs and resilient asset spreads.

• Total assets decreased 8% year-to-date, mainly due to lower customer loans and financial assets.

• Regulatory and governance changes were implemented following supervisory feedback, including a new Executive Committee and reclassification of certain credit exposures.

• Gross NPEs initially spiked due to regulatory reclassification but declined 12% since Q1, with 89% of past due loans linked to public administration.

Financial highlights

• Net interest income rose 48% year-on-year to €48.3 million; adjusted net interest income (including Superbonus trading) up 28% year-on-year.

• Total income increased 25% year-on-year to €106.2 million.

• Operating expenses increased 7% year-on-year, mainly due to higher administrative and compliance costs.

• Cost of risk stood at 42 basis points for the first nine months, up from 20bps in 9M24.

• Total assets decreased 8% year-to-date to €4.3 billion.

Outlook and guidance

• Margins across core businesses expected to remain stable through year-end; factoring and CQ margins stable, pawn margins supported by accelerated auctions.

• Net interest income and total income in Q4 expected to be stable or slightly lower than Q3, with cost of risk around 40 basis points.

• Cost of funding expected to end 2025 at 2.9%-2.95%, below previous guidance.

• Current capital reserves and ongoing securitisation transactions are expected to support further growth in factoring operations with limited capital absorption.

• No government repayment from municipalities in conservatorship expected in Q4; potential upside if legal actions accelerate.