BPER Banca (BPE) CMD 2024 summary

Strategic priorities, vision, and business model

• Four main priorities: boost commission-intensive products, increase productivity and reduce costs, modernize credit risk and capital management, and complete bank modernization by mid-2025.

• Aims to be a leading banking and wealth management player in Italy, serving ~5 million clients and managing €300bn in total financial assets, ranking 3rd by customers and assets.

• Pursues growth through organic expansion, integration of acquired banks, and a flexible, client-centric approach leveraging a strong territorial franchise.

• Maintains a conservative risk profile with strong asset quality, CET1 ratio above 14.5%, and NPE ratios at historical lows.

• Emphasizes ESG leadership, digital transformation, and workforce upskilling as core pillars for modernization.

Financial targets and guidance (2024–2027)

• Net income targeted to grow from €1.3B to €1.5B by 2027, with RoTE above 16% and CET1 ratio maintained above 14.5%.

• Total revenues to grow from ~€5.4bn in 2024 to ~€5.5bn in 2027 (+0.5% CAGR), with net commission income rising 12% (+3.8% CAGR) and net interest income declining 5% (-1.8% CAGR).

• Cumulative net earnings of €4.3B and a sustainable 75% payout ratio, translating to €3.2B in cash dividends and a yield above 15% between 2025-2027.

• Net customer loans to grow from ~€88bn to ~€97bn (+3% CAGR), and total financial assets from ~€297bn to ~€323bn (+3% CAGR); AUM to rise from €67B to €81B (+7% CAGR).

• Operating costs (excl. D&A) to decrease by 7%, with a cost-income ratio improving to ~50% by 2027.

Key business initiatives and growth drivers

• Focus on leveraging a large retail and corporate client base and nationwide presence, especially in wealthiest Italian regions.

• Strategic partnerships (e.g., Unipol Group) to drive insurance and consumer finance cross-selling, aiming to increase cross-selling index from 25% to 30%.

• Private and wealth management to benefit from a new open platform, BlackRock collaboration, and upskilling of private bankers, targeting a 20% AUM increase and higher penetration of high-value products.

• Corporate segment to expand product suite, invest in structured finance and capital markets, and grow global transaction banking fees by 18%, raising corporate commissions from 37% to 42% of revenues.

• Digital transformation to triple non-branch sales (to 45% by 2027), double digital client acquisition, and reduce physical transactions by 50%, with €650M IT CapEx and full-scale AI/GenAI adoption.