In This Article:
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Net Interest Income: Increased by 18% year on year.
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Fees: Grew by 36% year on year.
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Costs: Increased by 7% year on year.
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Factoring Turnover: Grew by 3.9% year on year, net of one-off items.
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Pawn Loans: Increased by 18% year on year, or 5% on a like-for-like basis.
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Salary and Pension Guaranteed Loans: Decreased by 12% year on year.
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Assets: Grew by 3% year on year.
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Term Deposits: Increased by 7% year on year.
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CET1 Ratio: Improved to 13.3% at year-end 2024.
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Total Capital Ratio: Improved to 16.1% at year-end 2024.
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Net Profit: Stood at 25.2 million, or 19.8 million on an adjusted basis.
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Factoring Net Profit: 38.3 million, or 33 million adjusted.
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Pawnbroking Division Contribution: Positive contribution of 3.2 million.
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Cost of Funding: 3.57%, higher by 73 basis points year on year.
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Cost of Risk: 3 basis points, or 30 basis points net of fourth quarter write-back.
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Banca Sistema SpA (FRA:B2S) reported a decisive recovery in revenues and profitability, with adjusted net interest income growing by 18% year on year.
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The bank's fees increased by 36% year on year, indicating strong performance in fee-based products.
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Factoring turnover grew by 3.9% year on year, excluding one-off items, and pawn loans increased by 18% or 5% on a like-for-like basis.
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Capital ratios improved, with the CET1 ratio moving from 9.9% in the first half of 2024 to 11.8% at year-end, and the total capital ratio increasing from 12.3% to 14.3%.
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The bank successfully repaid the TLTRO facility for more than $500 million in 2024, demonstrating strong liquidity management.
Negative Points
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The Bank of Italy's inspection report highlighted shortcomings in governance and internal control structures, requiring reclassification of some loans as past due.
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Past due loans increased significantly from EUR 79 million to EUR 372 million as of the first half of 2024, primarily related to factoring non-recourse.
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The stock of salary and pension guaranteed loans decreased by 12% year on year, aligning with the business plan but indicating a decline in this segment.
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Personnel costs grew by 9% year on year due to an increase in the number of full-time employees and national labor contract adjustments.
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The CQ division reported a loss of EUR 15.3 million, reflecting challenges in this segment despite efforts to improve profitability.
Q & A Highlights
Q: Are there expectations for further rulings by the European Court regarding municipalities, and how might this impact Banca Sistema's balance sheet? A: The CEO, Gianluca Garbi, explained that the European Court of Human Rights mandates that any final domestic court judgment must be executed promptly. Banca Sistema has filed cases involving 27 million in nominal value and 190 million in interest. The bank will continue pursuing similar cases, as the court ensures that the government guarantees payment execution. The CEO emphasized that this process is ongoing and could positively impact the bank's financials.