Among the Italian banks that will report their quarterly results next week, there will also be Banco BPM, the credit institution led by CEO Giuseppe Castagna, which has repeatedly reiterated the standalone strategy of Piazza Meda e the absence of any interest in tying the knot, in particular, with MPS.
Banco BPM’s accounts will be disclosed to the market next Tuesday 7 May, at a time when in Piazza Affari, thanks to the M&A news arriving from Spain, investors have returned to betting on a more or less imminent marriage between Italian banks, centered on the MPS-Monte dei Paschi di Siena state pawn: it too, like the main players in the Italian banking system, is ready to do the big earnings announcement of the first quarter of 2024.
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While waiting for the budget results, there were various news, opinions and positive comments on the bank managed by CEO Castagna.
Excellent news also arrived recently with a Barclays report dedicated to Italian banks .
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Banco BPM: analysts’ estimates on the accounts for the first quarter of 2024
In the specific case of Banco BPM, for the first quarter of 2024, estimates from analysts surveyed by Bloomberg predict revenues to grow to over $1.404 billioncompared to the previous 1.396 billion euros collected in the fourth quarter of 2023.
Equita SIM analysts’ estimates are similar, which forecast total revenues at 1.415 billion, up 1% on a quarterly basis and 13% on an annual basis.
Il net interest margin, or even a voice rewarded so far by the ECB – in the wake of the effect of the continuous rate increases by the central bank launched in 2022 and 2023 to fight inflation – is expected by the consensus of analysts to 859.97 million, compared to the 867.66 million euros of the last quarter of last year, therefore essentially stable.
Ditto Equita, which I respect NII at 859 million, down 1% QoQ but up 16% YoY.
L’effect of the ECB rate hikes, especially on an annual basis, will therefore continue to be evident.
Net profit is seen growing by Bloomberg to 352.75 million euroscompared to the previous 321.06 million in the fourth quarter, a slight increase compared to the net profit of 342 million expected by Equita.
The voice of the provisions to cover any future growth losses (NPL, impaired loans) is estimated by SIM at 112 million euros, roughly in line with the forecasts of analysts interviewed by Bloomberg, who foresee provisions worth 116.72 million, down compared to the 175.04 million provisions made in the fourth quarter of 2023.
Operating profit is estimated by Bloomberg at 737.5 million euros, up compared to 440.3 million in the previous quarter:
the outlook is followed by Equita, which forecasts an operating profit of 741 million, up 1% on a quarterly basis and 21% on an annual basis.
Positive outlook for revenues with NII-ECB rates and excellent commission trend
“On the revenue front we expect a good quarter – they commented from Equita SIM – with still a strong contribution from the NII (although down on a quarterly basis) and above all an excellent performance in commissions, expected to rise sharply on a quarterly basis (+7%) supported by the effect of the favorable market and the good performance of the commercial activity”.
Costs are expected to “slightly grow on a quarterly basis (+2%) mainly due to higher SG&A (due to the base effect, due to favorable elements that cannot be replicated in the fourth quarter of 2023), while the increase on an annual basis (+5% %) is largely attributable to the impact of the renewal of the banking contract”.
No “deterioration on the asset quality front” expected, a factor that leads Equita SIM to estimate a low cost of risk, less than 45 basis points.
Equita SIM’s confidence in Banco BPM was confirmed, in the wake of the earnings preview announced around mid-April, from the decision to improve the 2024 earnings outlook by +5% mainly to reflect the higher NII, i.e. interest margin, which is now expected to grow by 1% on an annual basis.
Also affecting the upgrade the largest commissions, explained the Milanese SIM, e “a less negative trading effect”.
For the same reason, Equita revised upwards Piazza Meda’s net profit estimates, relating to 2025 and 2026, by 4%.
Banco BPM: here’s how much the stock is worth according to analysts
Not only. Following the decision to confirm the rating on the stock to hold, Equita raised, following the revision of its earnings estimates, the target price on the stock: the increase, equal to +8%, brought the target price at €6.6 euros.
The hold rating was confirmed by Equita “in light of the limited upside compared to our fair value“. For his part, it was the CEO of Banco BPM Giuseppe Castagna himself who recently spoke about the margins for an increase in the share trend, who said he identified a potential “not yet expressed” in its entirety by the shares, despite the rally superior at +160% in three years.
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In this regard, pay attention to positive note announced by the research division of Intesa SanPaolo on the Banco BPM stock: analysts confirmed the rating on the shares, raising the target price from the previous 6.4 to 7 euros per share.
“We believe that the trends of the first quarter of 2024 will be consistent with the guidance given by the management, which we believe will be reiterated. Let’s catch a glimpse a resilient NII, with no significant deterioration in asset quality. A slight increase in CET1 should provide further visibility to the capital return story.” Intesa SanPaolo has thus raised the target price to 7 euros, “thanks to a lower cost of equity”.