GICS Sector : Financial Services
Banco BPM S.p.A., together with its subsidiaries, provides banking and financial products and services to individual, business, and corporate customers in Italy.The company operates through Retail, Corporate, Institutional, Private, Investment Banking, Strategic Partnerships, Leases, and Corporate Centre segments.It offers current accounts; home mortgages; personal loans; credit, debit, and prepaid cards; home, personal, assets, and auto and vehicle insurance; and saving and investment products, as well as online trading services.
Banco BPM reported a net profit of EUR 2.8 billion, exceeding guidance by EUR 130 million. The bank's revenue diversification is notable, with a 50-50 split between interest income and commission. Net interest income (NII) was impacted by the reduction in Euribor, but the bank managed to keep the reduction to 2.2% by taking advantage of lower certificate costs. The bank's EPS came in at 'None' relative to estimates of 0.3294.
Publication Date: Feb -17
The bank's non-NII revenues grew significantly, with a 21% increase in net fees and commissions and a 60% increase in income from associates. The bank's core revenues grew 5% in the last quarter and 2.5% year-on-year, despite a EUR 300 million reduction in NII. The insurance business was a key area of focus, with a 26% growth in insurance business year-on-year, driven by a 27% growth in Life Insurance.
With a Price-to-Tangible Book Value (P/TBV) of approximately 1.18, the bank appears reasonably valued. The Dividend Yield stands at 8.87%, indicating an attractive return for investors. The bank's ability to deliver a EUR 1 dividend per share is a positive signal, and its trajectory towards the EUR 2.15 billion net income target is on track.
The bank's common equity Tier 1 ratio stands at 13.76%, with an organic capital creation of 24 basis points on a pro forma basis. The bank's risk profile has improved significantly, with a massive reduction in non-performing loans and credit risk. The cost of risk was down to 40 basis points, including 5 basis points related to front-loading future derisking.
Giuseppe Castagna stated that the bank is confident in the pace of new loans and the increase in deposits, which would support the NII. Analysts estimate next year's revenue growth at 3.0%. The bank's guidance on net financial results expects a conservative outlook, slightly below EUR 50 million, with potential for improvement due to reduced costs and increased revenues.
How Recent Analyst Revisions Are Reframing The Banco BPM (BIT:BAMI) Investment Story
Feb -12
Crédit Agricole Q4 profit drops 24% on Banco BPM charge despite record revenues
Feb -04
Credit Agricole Profit Slides on Banco BPM Stake Consolidation
Feb -04
CREDIT AGRICOLE SA: Fourth quarter 2025 and full-year 2025 results - DYNAMIC ACTIVITY AND STRONG RESULTS IN 2025
Feb -04
UniCredit said to explore Delfin’s stake in Monte dei Paschi and Generali
Jan -13
Crédit Agricole gets ECB clearance to raise Banco BPM stake above 20%
Jan -13
CREDIT AGRICOLE SA: The European Central Bank has notified its approval to cross the 20% threshold in the share capital of Banco BPM
Jan -12
3 European Dividend Stocks With Up To 9.5% Yield
Dec -12
The 3.5% growth in Retail from Banco BPM S.p.A. is driven by increasing demand for digital banking services, expansion of branch networks, and strategic partnerships. Additionally, investments in customer experience, mobile banking apps, and online platforms have improved customer engagement and retention. Furthermore, the bank's focus on SMEs and consumer lending has contributed to the growth.
Banco BPM S.p.A.'s Corporate Centre growth of 3.8% is driven by effective cost management, improved operational efficiency, and strategic investments in digital transformation. Additionally, the centre's focus on risk management and robust capital allocation have contributed to its growth. Furthermore, the centre's ability to leverage synergies from the merger of Banco BPM and Banca Popolare di Milano has also supported its growth momentum.
Institutional segment growth of 3.2% driven by Banco BPM S.p.A.'s strategic expansion into corporate banking, increased market share in Italy, and robust growth in asset management and insurance services, supported by a strong brand reputation and diversified revenue streams.
Banco BPM S.p.A.'s 4.2% growth in Investment Banking is driven by increased M&A activity, debt capital markets transactions, and equity issuances. Strong relationships with Italian corporates, a favorable economic environment, and strategic expansion into adjacent businesses also contribute to this growth.
Banco BPM S.p.A.'s 3.9% private segment growth is driven by increasing demand for wealth management services, expansion of digital banking channels, and strategic partnerships. Additionally, the bank's focus on customer-centric approach, cost optimization, and investments in technology have contributed to the growth.
Banco BPM S.p.A.'s strategic partnerships drive 4.1% growth, fueled by increased collaboration with fintech companies, expansion into new markets, and enhanced digital offerings. This growth is also attributed to the bank's ability to leverage partnerships to improve operational efficiency, reduce costs, and enhance customer experience.
Banco BPM S.p.A.'s 3.6% growth is driven by a strong focus on digital transformation, cost reduction initiatives, and a solid asset quality. The bank's strategic plan aims to improve operational efficiency, enhance customer experience, and expand its market share in Italy. Additionally, a favorable interest rate environment and a growing Italian economy contribute to the bank's growth momentum.
The 3.8% growth of Corporate Center at Banco BPM S.p.A. is driven by strategic cost management, efficient capital allocation, and a focus on digital transformation. Additionally, the segment benefits from a strong risk management framework, solid asset quality, and a favorable interest rate environment, enabling the bank to maintain a stable net interest income and support its growth momentum.
Banco BPM S.p.A.'s insurance segment growth of 3.4% is driven by increasing demand for life insurance products, expansion into new regions, and strategic partnerships. Additionally, the bank's strong distribution network and digitalization efforts have improved customer reach and experience, contributing to the growth.
Banco BPM offers a wide range of retail banking services, including current accounts, credit cards, personal loans, and mortgages, to individuals and families.
Banco BPM provides corporate banking services to businesses, including cash management, trade finance, and lending solutions, to support their growth and development.
Banco BPM offers private banking services to high net worth individuals, including investment management, wealth planning, and tailored financial solutions.
Banco BPM provides asset management services, including mutual funds, pension funds, and institutional mandates, to help clients achieve their investment objectives.
Banco BPM offers a range of insurance products, including life insurance, non-life insurance, and pension insurance, to protect clients' assets and financial well-being.
Banco BPM provides wealth management services, including investment advice, portfolio management, and estate planning, to help clients achieve their financial goals.
The threat of substitutes for Banco BPM S.p.A. is medium due to the presence of alternative financial institutions and digital payment systems.
The bargaining power of customers for Banco BPM S.p.A. is low due to the lack of negotiating power of individual customers.
The bargaining power of suppliers for Banco BPM S.p.A. is medium due to the presence of multiple suppliers of technology and services.
The threat of new entrants for Banco BPM S.p.A. is high due to the increasing trend of fintech companies and digital banking platforms.
The intensity of rivalry for Banco BPM S.p.A. is high due to the presence of multiple banks and financial institutions in the Italian market.
| Value | |
|---|---|
| Debt Weight | 60.04% |
| Debt Cost | 8.76% |
| Equity Weight | 39.96% |
| Equity Cost | 8.76% |
| WACC | 8.76% |
| Leverage | 150.23% |
Value: 8.0
Growth: 8.6
Quality: 7.3
Yield: 5.0
Momentum: 9.0
Volatility: 6.0
1-Year Total Return ->
Value: 6.0
Growth: 6.2
Quality: 6.4
Yield: 9.4
Momentum: 9.5
Volatility: 5.7
1-Year Total Return ->
Value: 7.2
Growth: 4.0
Quality: 5.5
Yield: 6.9
Momentum: 7.5
Volatility: 9.7
1-Year Total Return ->
Value: 6.8
Growth: 4.7
Quality: 6.5
Yield: 5.6
Momentum: 6.5
Volatility: 10.0
1-Year Total Return ->
Value: 5.8
Growth: 5.6
Quality: 7.4
Yield: 6.9
Momentum: 7.5
Volatility: 4.3
1-Year Total Return ->
Value: 5.2
Growth: 5.3
Quality: 5.1
Yield: 6.2
Momentum: 3.5
Volatility: 10.0
1-Year Total Return ->