BPER Banca shares advance following solid core trends
Investing.com -- Shares of BPER Banca S.p.A. (BIT:BPER) climbed 3.3% as the bank reported solid core profit and loss trends, surpassing several consensus expectations.
The uplift in BPER’s stock comes after the company disclosed its first-quarter results, which showed net interest income slightly below the Visible Alpha consensus. This was primarily due to lower interest rates, while volume growth had a positive impact.
Commission income outperformed expectations by 3%, with a notable 9% increase year-on-year (YoY). This growth was attributed to a 14% rise in market fees and a 2.5% increase in commercial banking fees. Additionally, the bank’s revenues were bolstered by a roughly €40 million one-off, resulting in a 4% revenue beat against forecasts.
Operating expenses were 5% more favorable than anticipated, with human resources costs and headcount declining by 5% YoY. This led to a significant 13% beat in pre-provision income, or 7% excluding the one-off.
Net income exceeded expectations by 17%, aided by a lower cost of risk compared to estimates. However, asset quality showed a slight deterioration, with the non-performing loan (NPL) ratio increasing to 2.6% from 2.4% in December, and NPL stock rising 9% quarter-on-quarter (QoQ). Loan loss provisions were 26% better than expected at approximately €70 million, with the cost of risk at 30 basis points in the quarter, improving from 35 basis points in the fourth quarter of 2024.
The bank’s capital position was notably strong, with the Common Equity Tier 1 (CET1) ratio reported at 15.8%, remaining stable QoQ and surpassing both the consensus expectation of 15.5% and Jefferies’ forecast of 15.3%. The CET1 ratio was bolstered by organic capital generation, which accounted for a 37 basis points improvement QoQ, after accounting for dividends and risk-weighted assets growth. The negative impact of Basel IV regulations was slightly better than expected, contributing to the overall capital strength.
Looking forward, BPER’s 2025 profit and loss guidance anticipates a mid-single-digit decline in net interest income, which is in line with consensus estimates of a 6% YoY decrease. Commission income is expected to rise by mid-single digits, slightly more optimistic than the consensus forecast of a 3% increase.
The cost-to-income guidance suggests operating expenses will be 2% below consensus expectations, and the cost of risk is projected to be under 40 basis points, more favorable than the consensus of 45 basis points. The CET1 ratio is expected to remain above 15%, reflecting a conservative stance in light of the current results.
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