Credito Emiliano (CE) Q2 2025 earnings summary

Executive summary

• Net profit for H1 2025 reached €371.8 million, up 14.8% year-over-year, including a €93.7 million capital gain from the sale of merchant acquiring activities; normalized net profit was €278.1 million, reflecting strong underlying profitability.

• Customer base grew by over 94,000, reaching 1.6 million, supported by diversified business lines and strong net inflows in AUM and insurance.

• CET1 ratio stood at 15.8% (Holding) and 17.0% (Banking Group), confirming strong capital adequacy and a buffer of 742 basis points above requirements.

• Asset quality remained robust, with a gross NPL ratio of 1.6% and net NPL ratio of 0.7%, both well below Italian and European averages.

• All business areas contributed to revenue growth, leveraging market opportunities and commercial network strength.

Financial highlights

• Loans to customers grew 4.3% year-over-year, outperforming the Italian banking system average of 0.5%; direct funding rose 2.6% YoY to €107.1 billion.

• Net inflows from asset management and insurance reached nearly €1.5 billion, with AUM and insurance reserves up over €1 billion since end-2024.

• Net interest income fell 16.8% year-over-year to €474.4 million, while non-interest margin rose 0.7% to €462.7 million.

• Operating costs increased 4% year-over-year to €462.2 million, with a cost/income ratio of 49.3%.

• Cost of risk remained low at 3 basis points, aided by NPL disposals and conservative provisioning.

Outlook and guidance

• Management expects financial margin to benefit from volume growth but face pressure from interest rate declines and revisions.

• Loan growth guidance for 2025 and 2026 is around 2.5%-3% annually, mainly from residential mortgages, consumer credit, and selective corporate lending.

• Commission income is projected to remain robust, with management and brokerage fees expected to grow above 5% and net inflows target of €2 billion for 2025 likely to be exceeded.

• Operating costs will be impacted by labor agreements and investments in digital transformation and AI.

• Credit risk is expected to remain low, with no significant deterioration anticipated.