Banco BPM (BAMI) H2 2025 earnings summary

Executive summary

• Net profit for 2025 reached €2.08 billion, surpassing guidance by €130 million and nearing the 2027 strategic plan target, with a 50/50 split between interest income and commissions and strong organic growth from the Anima integration.

• CET1 ratio pro-forma at 13.76%, well above the 13% plan minimum and regulatory requirements, reflecting robust capital generation and effective risk management.

• Dividend per share set at €1.00, with a payout ratio of 80% and total shareholder remuneration for 2024/25 at €3 billion, achieving 50% of the strategic plan's cumulative target.

• Non-interest income accounted for 51% of total revenues, indicating a diversified and resilient business model, exceeding the 2027 target.

• Strong new lending generation, up 33% year-over-year, with customer financial assets at €396 billion.

Financial highlights

• Total revenues for 2025 were €5.96 billion, up 4.4% year-over-year, with core revenues up 2.5%.

• Net interest income declined by 9.1% year-over-year to €3.13 billion, offset by a 21.4% increase in net fees and commissions to €2.5 billion.

• Cost/income ratio improved to 46%; operating costs decreased 1.7% year-over-year on a like-for-like basis.

• Cost of risk improved to 40 bps, with total provisions down 26% year-over-year.

• Gross NPE ratio reduced to 2.2%; net NPE ratio at 1.22%, with NPE stock at a record low.

Outlook and guidance

• Confirms trajectory toward €2.15 billion net income target for 2027, with sustainable dividend of €1 per share expected for 2026.

• Guidance for 2026 NII is slightly above €3 billion, with conservative assumptions on loan growth and Euribor.

• Cost of risk guidance for 2026 remains at 43 bps, with potential for improvement if default rates stay low.

• Tax rate expected to rise to 33% in 2026 due to new budget law.

• Management expects further improvement in capital generation and continued strong profitability.