Ps, which has just closed a complex capital increase of 2,5 billion, recorded in third quarter of 2022 a loss of 360 million euros against a profit of 388 million euros achieved in the first nine months of 2021. The result for the third quarter (equal to -388 million euros) is down compared to the previous quarter (equal to + 18 million euros).
To affect the budget the 925 million restructuring charges one-off payment linked to voluntary outgoings of over 4.000 employees, the activation of which was subject to the availability of capital envisaged by the Plan and which therefore appears to have already been remedied with the successful conclusion of the capital increase. The redundancies would have led the Sienese bank led by the managing director Luigi Lovaglio to a loss of 794,4 million, but in this case the institution benefited from a tax bonus of 407,3 million euros. Excluding these restructuring costs, the net profit at September 30, 2022 it is equal to 565 million euros, supported by a pre-tax result of 150 million euros and a positive impact of taxes of 415 million euros.
A Business Square, in the first exchanges, the title Mps rose by more than 1% then passed into negative territory (-0,74% at 1,79 euros per share).
Third quarter 2022: the main results of MPS
As at 30 September 2022, the Group achieved revenues totaling 2.248 million euros, a slight decrease (-0,5%) compared to the same period of the previous year, mainly due to the decrease in other revenues from financial management, which in the first nine months of 2022 reflect lower profits deriving from transfer of securities. But they hold thanks to the push of the interest margin (+15,7% to 1.039,7 million), which benefits from the rise in interest rates and a lower cost of funding, while the commissions decreased by 5% to 1.055,3 million euro and the financial management result was halved to 137,7 million. They also contribute to the formation of revenues net result of hedging activity equal to +9 million euros, up compared to the first nine months of 2021 (equal to +8 million euros) and with a decrease in the third quarter of 2022 compared to the previous quarter (-2,4 million euros); and other positive operating income/charges for 16 million euros, an improvement compared to what was recorded in the first nine months of 2021 (equal to -26 million euros). The contribution for the third quarter, equal to -3 million euros, is worse than the previous quarter (equal to 22 million euros).
Stable i operating costs (+0,3%) to €1,59 billion while loan loss provisions jumped from €27,7 million in 2021 to €320 million, as they discount the effects of the disposals of non-performing loans as well as the cost deriving from the update of the base macroeconomic scenario.
Il net operating result recorded a drop of 47,9% to 337,5 million while the gross one, which does not yet discount the cost of credit, fell from 673 to 656 million (but was up by 13,5% net of the decreasing contribution from the sale of titles).
Capital coefficients
In terms of capital solidity, as at 30 September 2022 the Common Equity Tier 1 Ratio phased-in stood at 10% (11,7% at 30 June 2022, 12,5% at the end of 2021) and the Total Capital Ratio was 13,9% (15,4% as at 30 June 2022, 16,1% at the end of 2021). Considering the €2,5 billion capital increase, the pro-forma phased-in Common Equity Tier 1 Ratio stands at 15,7% and the pro-forma Total Capital Ratio at 19,5%.
Il cost/income ratio (cost to income ratio) as at 30 September was 70,8% from 70,7% in 2021, the Npe bad loan ratio to 2,1% from 2,6% a year earlier, the gross Npl ratio to 3,1% from the previous 3,8%.
Lovaglio (Ad Mps): "A new chapter has begun"
“I am very pleased we have started a new chapter for the oldest bank in the world – so the CEO Luigi Lovaglio comment on bank accounts -. Thanks to the success of the capital increase, a "complex operation carried out in a volatile market context", MPS will be able to reduce personnel costs by "more than 20% in one fell swoop" by "positioning itself to exploit its great potential in the coming quarters and paving the way for improving results.”
“We have already laid the foundations for the coming years and we expect to achieve the Plan objectives in advance”. According to the top manager Mps could back to the dividend ahead of schedule: "Already with 2022 profit in the absence of specific regulatory foreclosures". As regards voluntary outflows, "they will make it possible to save over 300 million a year and will make a significant contribution to achieving the target of 700 million in profits" while there is a "positive evolution also on legal risk". “We are facing a turning point and we are convinced that the best is yet to come”, concluded Lovaglio adding, on remuneration of shareholders, “the capital position creates room for an advance on distribution already with 2022 earnings.
