BPER Banca (BPE) Q4 2024 earnings summary

Executive summary

• Adjusted net profit for 2024 rose 4.1% year-over-year to €1.41 billion, driven by core revenue growth, lower cost of risk, and strong capital ratios, with a return on tangible equity of 16.9%.

• Proposed cash dividend of €0.60 per share, doubling year-over-year, with a payout ratio of 61%.

• Announced a proposed business combination with Banca Popolare di Sondrio to create Italy’s third-largest banking group by TFAs, deposits, and loans.

• 80% of business plan initiatives underway, with full implementation expected by H1 2025.

• Asset quality remained strong, with cost of risk at 36 bps and NPE coverage ratio at 54.3%.

Financial highlights

• Total revenues rose 1.8% year-over-year to €5.6 billion, with core revenues up 4.1% to €5.4 billion.

• Net interest income grew 3.9% to €3.4 billion; net commission income up 4.5% to €2.1 billion.

• Operating costs up 3.6% year-over-year to €2.8 billion; cost/income ratio stable at 50.3%.

• Loan loss provisions down over 20% to €333.3 million; cost of risk at 36 bps.

• Net loans to customers grew to €90.1 billion (+2.2% Y/Y); new loan production €17.4 billion (+10.9% FY/FY).

Outlook and guidance

• 2025 net profit expected to be slightly above 2024, with NII in line with 2023, commission income to remain positive, and operating costs (excl. D&A) to decrease.

• Business plan targets and payout ratio of 75% remain unchanged; guidance excludes impact from the proposed merger.

• Macroeconomic environment remains uncertain due to geopolitical tensions and protectionist risks.