Banco Bpm closed the first quarter of 2022 with record parameters. In the first three months of the year, the net profit it stood at 177,8 million euros, up 77,6% compared to 100,1 million in the same period of 2021 and 83,2% compared to the fourth quarter of 2021. The figure is higher than the market consensus which on net profit stopped at 138 million euro.
THEprofit net of non-recurring items for the first quarter is equal to 199,2 million, while the useful before taxes it reached "record levels", underlines Banco Bpm, reaching 399,1 million, up by 199,2% compared to the fourth quarter of 2021 and by 54% compared to the first quarter of 2021.
I revenues they stood at 1.186 million euros, up 9,1% on the fourth quarter of 2021 and 5,2% on the same period last year.
Going forward with the data, the interest margin stood at 511,5 million (+3%), while le net commissions amounted to 480,1 million (+1,8%). The operating charges fell from 643,9 to 624,7 million, while the net adjustments on loans to customers decreased to 151,1 million (from 217,1 million).
In the first quarter of 2022 the cost/income ratio it stood at 52,1%, down from 57,1% at the end of March 2021 and 57,5% compared to the fourth quarter 2021. The cost of risk it is at 54 basis points, the lowest level ever recorded by the bank since 2017” (i.e. since the birth of the new group following the merger between the former Banco Popolare and the former Banca Popolare di Milano).
As for the balance sheet aggregates, the Cet1 ratio is 13,1% (from 13,4% at the end of 2021). There direct collection at the end of the first quarter it amounted to 126,1 billion, up by 2,4% compared to the end of 2021. The indirect collection, net of capital-protected certificates, is equal to 95,6 billion, which shows a decrease of 2021% compared to the end of 3,5 "due to the effect of the fall in the prices of financial assets".
On the front of the credit qualityfinally, the stock of net non-performing loans amounted to 3,1 billion: -5,0% compared to the end of 2021 and -27,6% year on year. The coverage level of non-performing loans is 61,9% (58,6% and 62,7%), also considering the write-offs, the coverage rises to 70,2%, that of unlikely to pay is 44,4 % (44,0% and 43,1%). The total of non-performing loans is 50,4% (48,9% and 50,7%), also considering the write-offs, the coverage is 54,9%.
Insurance: option to purchase 81% of Bipiemme Vita
In the note on the quarterly accounts, Banco Bpm communicated that the board of directors approved the exercise of the option to purchase from Covéa Coopération the81% of the capital of Bipiemme Vita, an insurance company operating in the life business, in which Banco Bpm already owns a 19% stake. Bipiemme Vita in turn holds 100% of the share capital of Bipiemme Assicurazioni, which operates in the non-life business. “The exercise price of the call referring to 81% of Bipiemme Vita's share capital, based on the corresponding level of Unrestricted Tier1 as at 30 June 2021, can be estimated at approximately 310 million euro”, informs the institute. The completion of the transaction is expected within the next month of July, in advance of the date of 31 December 2023 envisaged in the strategic plan. The early exercise of the call option on Bipiemme Vita “enables the strengthening of the business model e preserve strategic optionalities”, underlines the bank.
Castagna on policies: "Let's explore all the options"
“We believe that the internalisation of bancassurance represents a good point but, having garnered the interest of strong and important insurance companies, it is in our interest to verify if there are any financial, strategic or operational aspects that can beat the internalisation of the business plan”, stated Castagna, adding that as regards the offers received "we see we are not obliged to an alliance, it is an option and it is good for us to explore all the options".
Securitization of 700 million Npl with Elliott
The bank continues there Npl reduction strategy for a total value of over one billion by the presentation of the results for the first half of the year. As part of this strategy, Banco Bpm has resolved to proceed with the sale of a portfolio of UTP and non-performing loans for a gross value of approximately 700 million, as part of the "Argo project". The transfer of the portfolio, according to a note, will take place in the context of a securitization transaction whose mezzanine and junior notes will be subscribed, following the negotiation and definition of the relative contractual documentation, by companies controlled by Elliott funds. Compared to the end of March 2022, the transaction makes it possible to reduce the stock of gross non-performing loans to 5,6 billion and makes it possible to reach a gross Npe ratio of 4,9%. The completion of the transaction is expected by the presentation of the results for the first half of 2022.
The predictions for 2022
In the light of the results of the first three months of the year, "I am confident that I can continue on this path towards achieving the results of the strategic plan", he assured the managing director of Banco Bpm, Giuseppe Castagna, during a conference call with financial analysts. Castagna has repeatedly said he is optimistic in the light of the "solid and strong growth" achieved by the bank in the January-March period, well positioned for "beat the results of 2021″.
“Barring further worsening of the scenario, the improvement of the group's net profit in 2022 compared to 2021, in line with the trend outlined in the Strategic Plan and with the related medium-term targets”, Banco Bpm says in a note, adding however that “The general picture, already conditioned by the persistence of the pandemic, is made even more complicated by tensions generated by the Russian invasion of Ukraine, with inevitable effects on growth prospects and inflation expectations driven by the increase in the cost of raw materials”. For this reason, the bank estimates that "'the operating performance of the group during the year will inevitably continue to be influenced by the external context".
Piazza Meda also specifies that the conflict in Ukraine has not had and is not expected to have significant impacts on the institution related to the group's direct exposure to Russia and Ukraine, also because exposure is less than 0,1% of total cash assets and endorsement credits.
