- Record Net Income and Capital Distribution Achieved EUR 9.3 billion net income in 2025, with EUR 8.8 billion distributed to shareholders and a planned EUR 2.3 billion buyback in July 2025.
- 2026 Net Income Target Aims for EUR 10 billion net income by 2026, driven by a 37% cost-income ratio and a sustainable ROE above 20%, supported by EUR 1.6 billion in cost savings.
- Capital Strength and NPL Reduction CET1 ratio rose to 13.9%, and NPL stock dropped to EUR 0.8 billion, ensuring a CET1 buffer above 12.5% and zero NPL inflows strategy.
- International Wealth Management Expansion EUR 10 billion in tech investments to scale Wealth Management in Germany, France, Spain, targeting EUR 500 billion in real economy contributions and 1 million new Isybank clients.
- Cost Reduction and Workforce Transition EUR 200 million absolute cost reduction via EUR 1.6 billion savings (including EUR 570 million in personnel costs) and 12,000 voluntary exits, while hiring 6,000 young employees in Italy.
Financial Performance Highlights
The bank's financial performance was characterized by a strong growth in revenues, with net interest income driven by the loan book and hedging facilities. The bank's net interest margin (NIM) remained stable, and the cost of risk was low. The bank's capital position remained robust, with a common equity Tier 1 ratio of 13.9%. The bank distributed EUR 8.8 billion to shareholders and announced a EUR 2.3 billion buyback in July.
New Business Plan: Strategic Pillars
The new business plan focuses on three strategic pillars: cost reduction, conservative revenue growth, and low cost of risk. The plan targets a net income of EUR 10 billion in 2026, driven by revenue growth and low cost of risk. The bank aims to deliver a sustainable return on equity above 20% and a cost-income ratio of 37% by the end of the plan. The plan includes significant growth in customer financial assets, lending, and advisory networks, with a focus on Wealth Management, Protection & Advisory.
Valuation and Dividend Yield
Using the bank's current valuation metrics, the Price-to-Tangible Book Value (P/TBV) ratio stands at 1.59, indicating a relatively attractive valuation. The Dividend Yield is 5.97%, providing a stable source of return for investors. The bank's plan to distribute a cash dividend equal to 75% of net income and add a 20% buyback will further enhance shareholder returns.
Growth Prospects and Risk Management
The bank's growth prospects are driven by its diversified business model, with a focus on Wealth Management and Protection & Advisory activities. The bank's risk management framework remains robust, with a zero NPL strategy and a conservative approach to risk-weighted assets. The bank's CEO, Carlo Messina, emphasized the bank's clear sustainability of cash flow for the future, driven by its strong capital position and diversified business model.
Outlook and Analyst Estimates
Analysts estimate next year's revenue growth at 3.2%, driven by the bank's diversified business model and growth prospects. The bank's guidance on fee income is conservative, with a CAGR of 3.8% expected. The bank's strong capital position and robust risk management framework provide a solid foundation for future growth.