Banco BPM (BAMI) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months of 2024 reached €1.7 billion, up 79.8% year-over-year, with adjusted net income at €1.245 billion, up 25.1% year-over-year.

• EPS guidance for 2024 is expected to exceed €0.95, with total 2024 dividends of €1.455 billion, including a €0.40 interim dividend, €150 million above plan.

• Core revenues grew 6.7% year-over-year to €4.27 billion, and operating profit rose 11.8% to €2.28 billion.

• The Numia payments JV was finalized, generating a €500 million capital gain, and bancassurance income accelerated in Q3.

• Announced a voluntary public tender offer for Anima, aiming to create a leading integrated life insurance and asset management group in Italy.

Financial highlights

• Total revenues for 9M 2024 were €4.27 billion, up 8% year-over-year and 9% above plan; pre-provision income rose 11.8% to €2.28 billion.

• Net interest income increased 6.7% year-over-year to €2.59 billion; net fees and commissions rose 3.9% to €1.51 billion.

• Loan loss provisions declined 21.3% year-over-year to €302 million; cost/income ratio improved to 46.7%.

• Net loans to customers stood at €101.4 billion, down 3.9% from year-end 2023; direct funding at €128.6 billion, up 2% year-to-date.

• Indirect customer funding rose 14.5% year-over-year to €114.4 billion.

Outlook and guidance

• Confident in exceeding previous EPS guidance of €0.95 for 2024, even with declining interest rates and reduced NII sensitivity.

• Dividend yield for 2024 expected at 15%, with a trajectory toward €4 billion cumulative shareholder remuneration by 2026.

• Strategic Plan targets for profitability, asset quality, and capital ratios are being outperformed, with CET1 ratio above plan.

• Net interest income expected to maintain an improving trend, with stable or slightly growing funding and signs of lending recovery.

• Operating expenses expected to remain stable; further non-repeatable personnel provisions possible if redundancy fund negotiations conclude.