BPER Banca (BPE) Q3 2024 earnings summary

Executive summary

• Revenues grew 2.9% year-over-year to €4.1 billion, with adjusted net profit up 2.2% to €1.1 billion for the first nine months of 2024.

• Core revenues rose 5% year-over-year, driven by strong net interest income and commission income.

• Cost-to-income ratio improved to 49.5% due to lower HR, consultancy, and marketing costs, maintaining operational efficiency.

• Capital ratios and liquidity remain robust, with CET1 at 15.8% and strong organic capital generation.

• Strategic plan execution is on track, with over half of initiatives underway and full implementation expected by mid-2025.

Financial highlights

• Net interest income for 9M24 was €2,523.2 million (+6% year-over-year); net commission income was €1,502.7 million (+3.5% year-over-year).

• Total financial assets grew 6.8% year-over-year, with a €5 billion increase in Q3.

• Operating costs rose to €2,218 million, with cost/income ratio at 49.5%.

• Loss provisions fell nearly 30% year-over-year to €254 million, reducing cost of risk to 39 bps.

• ROTE at 17.4%; EPS at €0.804 for 9M24.

Outlook and guidance

• FY24 guidance reaffirmed and revised upwards: total revenues expected at ~€5.4 billion, net profit ~€1.3 billion, cost/income ~52%, CET1 ratio ~15%.

• Cost of risk expected to remain below 48 bps; ROTE to exceed 15.5%.

• NII for 2025 expected to be in line with 2023, with loan growth as the main mitigation for lower rates.

• Commission income expected to step up in Q4 and continue growing in 2025.

• Business plan targets include 12% commission growth and 7% reduction in operating costs by 2027.