BPER Banca (BPE) Q1 2025 earnings summary

Executive summary

• Achieved record adjusted quarterly net profit of €443 million in Q1 2025, up 43.2% year-on-year, driven by strong commission growth, high-quality revenues, and improved cost efficiency, despite lower net interest income from falling rates.

• Strategic plan "B: Dynamic | Full Value 2027" is fully on track, with 100% of initiatives launched, significant progress in digitalization and ESG lending, and robust asset quality.

• Announced and launched a voluntary public exchange offer for Banca Popolare di Sondrio, aiming to create a leading Italian banking group with enhanced scale and profitability, with completion targeted for 2H25 and minimal expected antitrust impact.

• Capital ratios strengthened, with CET1 at 15.8% and organic capital generation of €540 million in Q1 2025.

• Credit quality remains strong: gross NPE ratio at 2.6%, net NPE at 1.2%, and NPE coverage at 54.2%.

Financial highlights

• Core revenues reached €1.4 billion, up 0.8% year-on-year; net commission income grew 8.5% year-on-year to €541.1 million, with AUM fees up 18.7%.

• Net interest income declined 3.8% year-on-year to €811.9 million, mainly due to lower rates.

• Operating costs decreased 3.2% year-on-year to €667.4 million; cost/income ratio improved to 46.7%.

• Loan origination totaled €4.4 billion, up 22.3% year-on-year; cost of risk at 31 basis points, with loan loss provisions down over 25% year-on-year.

• LCR at 166%, NSFR at 134.4%, both well above regulatory thresholds.

Outlook and guidance

• FY25 guidance: total revenues expected at ~€5.4 billion (down mid-single digit vs FY24), net commission income up mid-single digit, cost/income ratio ~51%, cost of risk below 40bps, CET1 ratio above 15%.

• Dividend payout ratio targeted at an average 75% through 2027, with potential upside if capital remains strong.

• Macroeconomic projections indicate moderate GDP growth in Italy and the Eurozone, with inflation stabilizing and ECB rate cuts supporting lending conditions.