Banco Bpm closed the first quarter of 2023 with a net profit of 265 million, up 49.2% compared to the same period last year and above the 230 million expected by market consensus. Operating income grew by 5.4% to 1.25 billion, driven by a record interest margin (+45.2% to 743 million) and with fees and commissions at 479 million (-0.3%). Operating expenses grew by 2.5% to 640 million, for a cost/income ratio down to 51.2%. In terms of capital solidity, the Cet 1 coefficient is 14.15% considering the expected application of the Danish Compromise and the overall buffer with respect to the regulatory minimums is 544 basis points. The institute expects the distribution of dividends of 1.25 billion in the next two years, “double compared to the two-year period 2021-2022”.
Continuing with the analysis of the income statement, net adjustments to loans amounted to 137.5 million, down 9% from a year ago and 25.6% from the fourth quarter of 2022. The cost of credit is thus equal to 51 basis points, «which represents the lowest level recorded by Banco Bpm since its inception in 2017.
The insurance match
The institute recalls that in March it received recognition from the ECB of the status of financial conglomerate, “which constituted the pre-condition for being able to access the benefits of the prudential treatment of equity investment” in insurance “deriving from the application of the so-called Danish Compromise, currently being evaluated by the competent Authorities”. Thus continues «the process of integration of the insurance business launched last year with the acquisition of control of the companies Banco Bpm Vita and Banco Bpm Assicurazioni and with the finalization of an agreement with Credit Agricole Assurances for the launch of a commercial partnership in the damage/protection sector.
The money plan
Furthermore, after the end of the quarter, the bank launched the project to enhance the e-money business, “through the development of a potential partnership with a leading market operator, which will have as its object both merchant acquiring and POS management and the issuing and distribution of payment cards», for which a value of over 2 billion is expected. Going back to the data for the quarter, as regards the balance sheet aggregates, direct bank deposits amounted to 123.2 billion (-0.2% since the end of 2022), while indirect deposits rose by 4.6% to 95.6 billion. Net loans to customers amounted to 107.8 billion (-1.5%), with new loans to households and businesses in the quarter for 5.2 billion. Net non-performing exposures amounted to 2.3 billion. The incidence gross of adjustments is 4.2% against 5.5% in March 2022.
Castagna: «Confident about the remuneration of the partners»
Banco Bpm plans to close 2024 with a Cet 1 coefficient of over 14% and therefore with excess capital such as to be able to evaluate “a further increase in shareholder remuneration”. This was stated by the CEO Giuseppe Castagna during the conference call on the quarterly accounts: “We believe it is time to go further” in the remuneration of shareholders, he added, explaining that the institute will also evaluate various solutions including an increase in the payout or a buyback, informing the market of its decisions by presenting the updated strategic plan. “I am very confident of increasing the remuneration policy for shareholders”, Castagna reiterated, recalling that the current projects in bancassurance and e-money “will bring capital and increase our profitability”. “We don’t think there is any M&A possibility that could give us the same remuneration,” he concluded.