Intesa Sanpaolo reveals extraordinary results for the first six months of 2024, with CEO Carlo Messina defining this period as “the best semester of the last seventeen years”. Net profit reaches 4,77 billion euros, marking a growth of 12,9% compared to the same period last year. The second quarter, in particular, stands out with a profit of 2,47 billion euros, exceeding the expected 2,3 billion. Not only that, Intesa Sanpaolo expects a net profit of more than 8,5 billion euros for 2024 and 2025, and has announced an increase in the dividend per share, significantly improving its previous forecasts.
“The half-year results we presented are of high quality, reflecting strong acceleration in commission and insurance revenues and resilient net interest income. Our turnover growth was the highest in Europe among our competitors,” underlined the top manager.
After the publication of the half-yearly results, the title of Intesa Sanpaolo jumps by more than 3%.
Growing dividends
The banking institution confirmed a increase in dividend per share for 2024 and 2025 compared to 2023, thanks to a cash payout ratio of 70% of consolidated net profit. As Messina stated, “thanks to a 15% growth in earnings per share (EPS), we can distribute over 7,4 billion euros in 2024, equal to 11% of our market capitalization”. This includes a interim dividend of approximately 3 billion euros and 1,7 billion buyback program euro started in June 2024. The final decision on the interim dividend will be made on 31 October 2024, and any further distributions for 2024 will be announced after approval of the annual results.
Optimism for the second half of the year
Thanks to the results of the first half of the year, Intesa has revised al I raise its profitability estimates. For 2024 and 2025, net profit is expected to exceed 8,5 billion euros, compared to the previous forecast of more than 8 billion.
Messina also provides one solid revenue growth, “supported by a further increase in net interest, expected at around 15,5 billion euros, and by an increase in net commissions and the result of the insurance activity, thanks to the group's leadership in the Wealth Management, Protection & Advisory sector ”. Messina added: “The interest rate context is evolving, but we are well positioned to face it successfully thanks to the diversification of our business model and the savings that families and businesses entrust to us, which grew by 48 billion euros in the half-year.”
The other items of the income statement
The CEO also highlighted that the customers' financial activities they grew by more than 100 billion euros on an annual basis and by 20 billion euros in the second quarter.
In the semester, i net operating income they increased by 9,6%, reaching 13,6 billion euros. This increase was driven by a substantial increase in net interest, which rose to 7,9 billion euros, with growth of 16,2% compared to the same period of the previous year. The commissions nice they also contributed positively, rising to 4,6 billion euros, up 6,9% compared to the 4,3 billion of the previous half-year. “The contribution of revenues from commissions and insurance to total revenues exceeds 40%, it is the highest in Europe after UBS”, remarked the top manager.
I operating costs they remained almost stable at 5,2 billion, with a marginal change of 0,1%. This reflects stable expense control, with a slight decrease in administrative expenses and a limited increase in personnel expenses and depreciation. Consequently, the relationship cost/income it improved to 38,3%, compared to 38,8% in the previous semester.
Credit quality and capital solidity
At the end of June, theimpact of impaired loans on loans overall it is equal to 1,1% net of value adjustments and 2,2% gross. Considering the methodology adopted by the EBA, the percentage stands at 1%. Exposure to Russia decreased by around 86%, or more than €3,1 billion compared to end-June 2022, falling to 0,1% of the group's overall customer loans. Cross-border loans to Russia are mostly performing and classified as stage 2.
With regard to the financial solidity, CET coefficient 1 is equal to 13,5%, excluding approximately 120 cents of a point of benefit deriving from the absorption of active deferred taxes, of which approximately 25 in the horizon between the third quarter of 2024 and 2025. This coefficient widely exceeds the SREP requirement of 9,35 .2024% expected for XNUMX.
Carlo Messina's comment
Messina underlined Intesa's industrial strategy: “We have a unique model in Europe, with consolidated leadership in our divisions serving families and businesses, a significant component of Wealth Management Protection and Advisory, efficiency-oriented management of international activities, a technologically advanced digital offer, a Zero NPL Bank status and a highly relevant ESG profile".
The top manager also emphasized the composition of revenues, with Intesa Sanpaolo first in the Eurozone for the ratio of commissions and insurance activity to revenues. “Our strength lies in more than 16.000 dedicated professionals, a cutting-edge digital offering and our insurance and asset management companies,” he said.
Finally, Messina recalled thethe bank's social commitment: “We are engaged in the main social cohesion project to promote a more equal society, with a program of interventions worth 1,5 billion euros by 2027.” In the first six months of 2024, medium and long-term disbursements exceeded 20 billion euros, and savings entrusted by families and businesses reached over 1.353 billion euros. The resources allocated to personnel in Italy in 2023 were more than 6 billion euros.
