Banco BPM (BAMI) H1 2024 earnings summary

Executive summary

• Adjusted net income reached €776 million in H1 2024, up 19% year-on-year, surpassing strategic plan targets.

• Stated net income for H1 2024 was €750 million, up 20% year-on-year.

• EPS guidance for 2024 raised to €0.95, a 14% increase over 2023; interim dividend guidance upgraded to €600 million, 9% above the original plan.

• CET1 ratio improved to 15.2%, the highest since the merger and above plan targets.

• Effective managerial actions reduced interest rate sensitivity and supported a positive outlook.

Financial highlights

• Core revenues grew 8.3% year-on-year to €2.83 billion in H1; net interest income rose 10.9% to €1.72 billion.

• Net fees and commissions up 4.5% to €1.02 billion; investment product placements up 31% year-on-year.

• Pre-provision income up 11.8% year-on-year to €1,456 million; operating profit at €1,456 million (+12% y/y).

• Loan loss provisions reduced by 25% year-on-year; cost of risk annualized at 38 basis points.

• Cost/income ratio improved to 48% from 49% last year.

Outlook and guidance

• EPS guidance for 2024 raised to €0.95; interim dividend for 2024 set at €600 million, with annualized dividend yield at 14%.

• Confident in achieving over €1.5 billion net profit in 2026 and exceeding €4 billion shareholder remuneration for 2023-26.

• Payout ratio remains at 67% of reported earnings, targeting €1.8 billion for 2024.

• Profitability outlook benefits from new product factories, with full operation expected in 2026.

• Macro environment remains positive but cautious due to geopolitical risks; stable or slightly growing funding and positive net interest income trend expected for H2 2024.