BFF Bank (BFF) Q2 2024 earnings summary

Executive summary

• Filed official response to Bank of Italy on credit classification, governance, and remuneration, resulting in credit portfolio reclassification, €1,429m incremental past due, €1,801m incremental RWAs, and €0.7m IFRS 9 provisions.

• Adjusted net profit for H1 2024 is €71.0m, up 5% year-over-year excluding one-off items; reported net profit reached €161.8m, up 112% year-over-year due to LPI and recovery cost rights step-up.

• Loan book at €5.6bn, up 7% year-over-year, marking a record first half; total assets at €12.2bn; balance sheet stable with increased online deposits and prudent loan-to-deposit ratio of 69%.

• Deposits grew 10% year-over-year to €8.1bn; leverage ratio improved to 6.2%.

• Capital ratios remain strong: CET1 at 11.9%, total capital ratio at 14.8%, both above regulatory requirements; dividend resumption pending Bank of Italy approval.

Financial highlights

• Total net revenues up 9% year-over-year; total revenues up 20% year-over-year excluding 1Q23 capital gain.

• Costs increased by 4% year-over-year, reflecting investments, inflation, and sector contract renewal.

• Gross yield on average loans rose 13% year-over-year to 7.6%.

• Cost of funding in 1H24 was 3.75%, below market reference rates.

• Net NPLs/loans ratio at 0.1% (excluding Italian municipalities in conservatorship); coverage ratio improved to 80%.

Outlook and guidance

• 2026 business plan targets reaffirmed: adjusted net profit €255–265m, EPS €1.37–1.43, cumulative dividends >€720m, ROTE >50% (ex accrual rate step-up), CET1 ratio >12%, cost/income <40%.

• Focus for H2: manage redemption of back book, deflate RWA, rebuild commercial drive in Italy, and prepare for Q4 LPI and recovery cost season.

• Dividend policy unchanged; resumption contingent on capital ratios and Bank of Italy lifting ban.