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, marking the best nine-month performance since 2007, driven by strong commissions, insurance income, and cost control despite significant technology investments.

• Operating income grew to €20.4 billion (+8.5% year-over-year), with net interest income up 11.5% and net fee and commission income up 7.9%.

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

• CET1 ratio at 13.9% after 9M 2024 dividends, with €5 billion in dividends accrued and €1.7 billion share buyback completed.

• Accelerated digital transformation and workforce changes, including €3.5 billion IT investments, 4,000 voluntary exits, and 3,500 new hires by 2027.

Financial highlights

• 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 were stable at €8.0 billion (+0.8%), with administrative costs down and personnel expenses up slightly.

• Gross income increased 13.4% to €11.4 billion; EPS and DPS both up 20% year-over-year.

• Customer financial assets rose by €135 billion year-over-year to €1.4 trillion, with €25 billion added in Q3.

• Q3 2024 net income was €2.4 billion, up 26% year-over-year.

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 payout ratio set at 70% of consolidated net income, with additional distributions and a dividend yield of ~10% in 2024 and ~10.5% in 2025.

• 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.