Bpm bank confirms the good momentum that characterizes the performance of Italian banks and closes the first quarter 2024 with a profit of 370 million euros, up by 40% over the same period of 2023, thanks to revenues that rose by 15%, to 1,43 billion euros. On theinstitute driven by Joseph Chestnut (in the picture, ed) the rate wind continues to blow, with a interest margin which rises from 16,3% compared to a year ago and is holding up compared to the end of 2023 (-0,4%), while the commissions (+11,7% on the previous quarter) thanks to the performance of savings products, with a momentum that the cost dynamics, which rose by 4,5%, is unable to slow down.
Banco Bpm, possible improvement of the 2024 profit target
Sul front patrimonial the index strengthens Cet1 ratio, which rose in the quarter from 14,2 to 14,7%, while the incidence of non-performing loans, which falls to 1,7% after provisions. Let there be direct collection (+3,4%) either live (+15,4%) grew while loans fell by 2,6% compared to the first quarter of 2023.
The Bank speaks of an "excellent start to the 2024 financial year, fully in line with the objectives of the 2023-2026 strategic plan" and reserves the right, on the occasion of the half-yearly report, to adjust the earnings per share target for 2024, seeing "margins of improvement” compared to the 90 cents per share target (over 1,1 euros including non-recurring income).
Banco Bpm, what Castagna says
Castagna is optimistic and speaks of a "very positive outlook" but believes it is "much more serious" to talk about it at the end of the semester and not just a quarter after the launch of the plan. “We are confident in the targets, we are ahead of all the main numbers” and “we do not see any risk” on the announced distribution of 2 billion euros to shareholders from the 2023-2024 profits, of which 1,4 billion in cash this year, as well as "we are well on track" with respect to the 6 billion in cumulative profits and the distribution of 4 billion expected in 2026. The bank confirms that it expects it in 2024 commissions and an interest margin growing compared to 2023, with the former driven by managed savings and the latter capable of absorbing the three rate cuts expected by the ECB.
Banco Bpm between wars, rates and inflation: the scenarios
“The performance of the economy in the first months of 2024 – highlights Banco Bpm in the note accompanying the results of the first quarter of the year – confirmed a good overall resilience, despite the persistence of geopolitical crises: the latest forecasts outline constant growth (albeit weak) in the Eurozone for 2024, which will find more strength in 2025. For Italy, expectations are slightly more optimistic than those formulated at the beginning of the year, in particular oninflation GDP growth, now positioned between 0,9% (Confindustria) and 1% (Def)”.
“Unlike them Usa – we read in the note – in Europe the gradual easing of inflationary pressures makes it probable that the country will begin a phase of monetary easing ECB starting in June
2024, with scenarios of reduction in official rates which we can assume will proceed in a cautious manner. On the front of collection, it is plausible to expect deposits to hold up well, despite the expected pressure generated by government bond issues."
“The scenario of a slow but progressive decline in market rates could reduce the competitive pressures on funding and, consequently, make the use of tied and expensive collection sources less significant than expected. The slowdown of uses will be persistent for much of the first half of the year, while signs of tangible recovery could appear in the second part of the year, with interest rates more favorable to investments”.
