Banco BPM closes the first nine months of the year with a consolidated net profit of 686 million, up 30,9% compared to 30 September 2018. The result, which arrives at the end of a positive third quarter of 2019 and in line with the objectives, was achieved in parallel with the continuation of the derisking activity, highlighted by the drop in the net NPE ratio to 5,6% (it was 6,5% at the end of 2018), by the drop in the cost of credit (69 bp compared to 184 bp in December 2018) and in the face of a strengthening capital base, with the phased-in CET1 Ratio at 13,8% and the fully loaded CET1 rising to 12,1%.
The good result of the bank is confirmed by business development, as evidenced by the dynamics of loans and direct deposits and by the pre-tax profit, which grew by 13,5% compared to 30 September 2018, reaching 884 million. Adjusted net income also grew by 82 million, compared to 30 September 2018, settling at 387,2 million. This result, supported by the bank's commercial effort, was achieved in a macroeconomic and negative interest rate scenario which continues to be heavily penalizing for banks, together with the constant decrease in operating expenses (-3,5% y/y ), as well as the decrease in loan adjustments (-41,5% compared to 30 September 2018).
With regard to reorganization and derisking operationsMore specifically, the “ACE” sale (already launched last year) was finalized in the first quarter with the obtaining of the “GACS” guarantee on the Senior Notes and the placement of 95% of the Mezzanine and Junior Notes. In this way, it was possible to proceed with the accounting derecognition of the assigned receivables which at the end of the year were recorded under "assets held for sale". Also noteworthy is the signing of the agreement for the sale of a portfolio of non-performing leased loans: following the completion of the due diligence process, in April Banco BPM identified Illimity Bank as the counterparty for the sale of a portfolio equal to approximately 650 million nominal at the cut-off date.
As at 30 September 2019, following the disposals that took place in the third quarter, the receivables still recognized in the financial statements under "assets held for sale" amounted to 388 million gross (108 million net of value adjustments). During the period, i placement of two senior preferred unsecured bond issues reserved for institutional investors; the first, at the beginning of March, with a 3-year maturity for an amount of 750 million and a fixed coupon of 2%; the second in June with a 5-year maturity for an amount of 500 million and a fixed coupon of 2,50%.
Furthermore, at the beginning of October, a new Tier 2 subordinated issue was completed for 350 million, with a ten-year maturity, also intended for institutional investors. Also considering the placement, which took place in October, of a senior preferred unsecured issue for 500 million, the total amount of public issues by Banco BPM in 2019 reached 2,4 billion (equal to +141% compared to all maturities "wholesale" of 2019).
