Banca Monte dei Paschi di Siena (BMPS) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached €1,159 million, up 87.3% year-over-year, with Q2 profit at €827 million, including a positive net tax effect of €457 million.

• Gross operating profit for H1 2024 exceeded €1.1 billion, up 18% year-over-year, driven by nearly double-digit revenue growth and effective cost management.

• Total revenues for H1 2024 surpassed €2 billion, up 9.7% year-over-year, with net interest income up 8.3% and fee income up 9.8%.

• Cost-to-income ratio improved to 46% in H1 2024 from 49% in H1 2023, reflecting ongoing cost optimization.

• Fully loaded CET1 ratio at 18.1% as of June 2024, with payout ratio guidance raised to 75%.

Financial highlights

• Operating costs in H1 2024 were €925 million, with non-HR costs down 6.7% and HR costs up 5.9%.

• Net non-performing loans stable; gross NPE ratio at 4.6%, net at 2.4%, with coverage at 49.8%.

• Cost of risk at 52 bps for H1 2024, expected to decline to 34 bps by 2028.

• Liquidity ratios strong: LCR at 164%, NSFR at 134%, counterbalancing capacity above €33 billion.

• Total funding reached €196.4 billion, up €8.9 billion from December 2023.

Outlook and guidance

• 2024 net profit expected at €1.3 billion, with payout ratio guidance raised from 50% to 75%.

• Business plan targets pre-tax profit of €1.4 billion in 2026 and €1.7 billion in 2028.

• CET1 ratio projected to remain above 18% throughout the plan period.

• Fee and commission income to increase by €260 million by 2028, mainly from wealth management.

• Revenues projected to grow to €4.1 billion in 2028, with commission income offsetting expected NII declines.