Credito Emiliano (CE) H1 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached €323.8 million, up 8.4% year-over-year, with annualized ROE at 17.4% and ROTE at 20.0%, after €33 million in contributions to distressed banks and €4 million in insurance guarantee provisions.

• CET1 ratio stood at 17.1% (banking group) and 15.7% (holding), providing an 812 basis point buffer over regulatory requirements.

• Asset quality remained robust, with gross NPL ratio at 1.87%–2.3%, net NPL ratio at 0.8%, and NPL coverage at 58.6%–59%.

• Business volumes, loans, and customer base grew year-over-year, outperforming the broader banking industry.

• Diversified revenue streams, digital transformation, and ESG initiatives, including Net Zero Banking Alliance membership, supported resilience and organic growth.

Financial highlights

• Operating income rose to €1,029.7 million (+8.7% YoY); net interest income was €570.2 million (+13.1% YoY); non-interest margin at €459.4 million (+3.6% YoY).

• Net operating profit grew 10.2% year-over-year, confirming revenue growth outpacing expenses.

• Operating costs increased 7.6% year-over-year, mainly due to labor contracts and IT investments.

• Cost/income ratio improved to 43.2%.

• Loans to customers at €35.2 billion (+1.2% YoY), direct customer deposits at €38.3 billion (+4.0% YoY), indirect deposits at €54.1 billion (+10.9% YoY).

Outlook and guidance

• Management expects continued organic growth above market average, focusing on operational efficiency, digitalization, AI, and ESG integration.

• NII guidance for 2024 revised towards flat (0% to -5%), with non-interest income as a key driver as rates decline.

• Loan growth expected to remain positive, leveraging diversified channels and specialized networks.

• Cost of credit is expected to remain low, with solid capital and risk profiles maintained.

• Wealth management and fee revenue growth are strategic priorities.