Banco BMG (BMGB4) Q2 2024 earnings summary

Executive summary

• Net profit reached R$105 million in Q2 2024, with ROAE at 10.8%, up 11.6% sequentially, reflecting consistent quarter-on-quarter improvement and a significant rise from 1H23.

• Serves 10.2 million clients, with 68% holding credit products and 26% with insurance products.

• Strategic focus on core banking, payroll products, operational efficiency, digital transformation, and asset quality, including the sale of non-core assets like Granito.

• Customer satisfaction initiatives led to a 54% drop in complaints, a 34% reduction in call center activations, and NPS at 77%, with multiple customer service awards.

• Financial margin after cost of credit grew 20.7% year-over-year in 1H24, with operational result turning positive.

Financial highlights

• Net interest margin after cost of credit was R$746 million in 2Q24, up 4.5% sequentially and 20.3% year-over-year.

• Capital ratio improved to 13.9% year-over-year; Basel ratio reached 14.7% with Tier 1 above 10%.

• Total credit portfolio was R$24.3 billion in 2Q24, with 71% in secured loans (mainly payroll and FGTS anticipation).

• NPL over 90 days at 4.6% in 2Q24, with a coverage ratio of 109%.

• Insurance operations posted R$52 million in revenue and R$244 million in premiums sold, with a 71.2% combined ratio and 8.4 million policies in force.

Outlook and guidance

• Focus on sustainable result generation, cost efficiency, and strengthening client relationships, with continued prioritization of payroll and retail credit origination and digital expansion.

• Participation in upcoming INSS auctions anticipated, with focus on operational efficiency amid tight margins.

• Ongoing ESG, financial education, and digital insurance initiatives expected to support future growth.

• Payout policy remains unchanged, maximizing interest over capital within regulatory limits.