In This Article:
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Profit: EUR1,951 million, up by 16.9% year on year.
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Gross Operating Profit: EUR2,165 million, up by 10.8% year on year.
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Core Revenues: EUR3,821 million, up by 5.7% year on year.
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Net Interest Income: EUR2,356 million, up by 2.8% year on year.
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Cost to Income Ratio: Improved to 46% from 49% in 2023.
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Wealth Management Growth: 19% year on year.
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New Retail Mortgage: EUR3.44 billion, up by 26% year on year.
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New Consumer Finance: EUR1.1 billion, up by 21% year on year.
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Commercial Savings Volumes: EUR167.2 billion, up by 5.8% year on year.
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Operating Costs: EUR1,869 million, up by 1.4% year on year.
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Net Dividends Proposed: EUR0.86 per share, totaling about EUR1 billion.
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CET1 Ratio: 18.2%, at the top of the banking system.
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Total Capital Ratio: 20.5%.
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Liquidity Coverage Ratio: Above 160.
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Net Stable Funding Ratio: About 130.
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Banca Monte dei Paschi di Siena (BMDPF) reported a profit of EUR 1,951 million, up by 16.9% year on year, driven by strong business revenues.
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Gross operating profit increased by 10.8% year on year, supported by revenue growth and effective cost management.
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The bank's core revenues rose by 5% year on year, reaching EUR 3.8 billion, with significant contributions from net interest income and fees.
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Asset quality remained strong, with a CET1 ratio fully loaded at 18.2%, positioning BMDPF at the top of the banking system.
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The proposed net dividends amount to EUR 1 billion, reflecting a yield of 14%, which is among the highest in the banking sector.
Negative Points
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Net interest income is expected to decrease due to the interest rate scenario, although efforts are being made to mitigate this through improved mix management.
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Operating costs are anticipated to rise slightly, driven by investments in technology and the full impact of a new labor contract.
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The cost of risk is projected to be lower than in 2024, but there are concerns about maintaining this trend amidst market uncertainties.
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The integration with Medibank poses potential challenges, particularly in aligning operational models and digital platforms.
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There is uncertainty regarding the full realization of synergies from the Medibank transaction, especially if initial distractions occur during the merger process.
Q & A Highlights
Q: What kind of decline in net interest income (NII) is expected for the year, and how do you see volume deposits and lending evolving? A: We expect a decrease in net interest income due to the interest rate scenario. The decline could be in the range of a single digit, but it largely depends on our ability to manage the cost of funding and convert part of the deposits into wealth management products. We are investing in processes and technology to support this transition.