BPER Banca (BPE) Q3 2024 earnings summary

Executive summary

• Adjusted net profit for the first nine months of 2024 rose 2.2% year-over-year to €1.1 billion, with consolidated net profit attributable to the parent at €1,137 million after banking system fund contributions.

• Core revenues increased 5% year-over-year to €4.0 billion, driven by resilient net interest income and commission income.

• Cost/income ratio improved to 49.5%, supported by lower HR, consultancy, and marketing costs, and operational efficiency.

• Capital and liquidity ratios remain robust, with CET1 at 15.8% and strong organic capital generation.

• Strategic and business plan execution is on track, with over half of initiatives underway and full implementation expected by mid-2025.

Financial highlights

• Total revenues reached €4.1 billion, up 2.9% year-over-year for 9M24; net interest income grew 6% to €2.5 billion, and net commission income rose 3.5% to €1.5 billion.

• Operating income was €4,129.1 million (+2.87% year-over-year); operating costs rose to €2,218.0 million, impacted by workforce optimization.

• Cost of risk improved to 39 bps, down from 48 bps in FY23; loss provisions fell nearly 30% year-over-year to €254 million.

• ROTE at 17.4% (annualized); EPS at €0.804 for 9M24.

• LCR at 168.7% and NSFR at 136.1%, both above regulatory requirements.

Outlook and guidance

• FY24 guidance reaffirmed and revised upwards: CET1 ratio expected at ~15%, total revenues ~€5.4 billion, net profit ~€1.3 billion, cost/income ~52%.

• Cost of risk expected to remain below 48 bps; ROTE to exceed 15.5%.

• NII for 2025 expected to be in line with 2023, with loan growth mitigating lower rates; commission income expected to grow.

• Business plan targets include 12% commission growth and 7% operating cost reduction by 2027.

• Prudent management and conservative outlook maintained amid macroeconomic and geopolitical uncertainties.