Intesa Sanpaolo (ISP) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months of 2024 reached €7.2 billion, up 17.1% year-over-year, with Q3 net income at €2.4 billion and full-year guidance above €8.5 billion; 2025 guidance raised to around €9 billion.

• Operating income grew 8.5% year-over-year to €20.4 billion, with strong growth in commissions and insurance income.

• Cost/income ratio improved to 39.1%, the lowest ever, reflecting effective cost management and technology investments.

• Shareholder returns prioritized, with €7.5 billion to be distributed in 2024, including €3 billion interim dividend and €1.7 billion share buyback.

• Significant investments in technology (€3.5 billion deployed), digital transformation, and workforce changes (4,000 voluntary exits, 3,500 new hires) are underway.

Financial highlights

• Net income for the first nine months was €7.2 billion, up 17.1% year-over-year; Q3 net income increased 26% year-over-year.

• Net interest income rose 11.5% to €11.9 billion; net fee and commission income up 7.9% to €7.0 billion; insurance income up 2.8%.

• Operating costs rose 0.8% to €8.0 billion; administrative costs decreased by 2% year-over-year.

• Customer financial assets rose by €135 billion year-over-year to €1,378 billion, with €25 billion added in Q3.

• Interim dividend of €0.17 per share to be paid, up 18% from last year; €5 billion dividends accrued in 9M 2024.

Outlook and guidance

• 2024 net income guidance confirmed above €8.5 billion, with 2025 guidance raised to around €9 billion and CET1 ratio projected at 15% pre-Basel IV.

• Dividend yield expected at 10% in 2024 and 10.5% in 2025, with a 70% cash payout ratio.

• Net interest income expected to remain resilient in 2025, even with a 2% Euribor scenario.

• Cost base to decline further in 2025–2028, driven by staff reductions and completion of tech investments.

• 2025 targets include revenue growth, cost reduction, and a CET1 ratio of around 15% pre-Basel IV.