Mps, profit beats expectations. The title runs in Piazza Affari

MILAN – The serene continues to shine on Monte dei Paschi di Siena. The bank closed the first quarter with a profit of 236 million euros, a strong improvement compared to 10 million in the same period of 2022 but also up 51.3% from 156 million in the previous quarter. The figure is higher than the consensus of analysts, who expected profits per firm of 122 million euros. “The results for the first quarter – reads a note – confirm the new positioning of the bank capable of generating sustainable profitability with an improvement in operating performance, thanks to the results already achieved in the implementation of the 2022-2026 business plan”. The reaction to Piazza Afffari was very positive. After the rally already recorded yesterday i (+5.8%) the share rose in the morning by more than three points to 2.23 euros.

Lovaglio: “Mps is back”

“Today, with the first quarter, we bring data on what could be our profitability and return for shareholders starting this year”, said the banker, underlining how the result for the quarter represents “a third of the annual target” of profit “by 2024”. After the restructuring carried out at the end of 2022, with the exit of over 4,000 employees, this is the “first quarter in which the group has implemented its full potential”.

The effect of interest rates on accounts

In the quarter Siena saw revenues amounting to 879 million euros, up by 11.8% not only compared to the same period of the previous year but also by 4.8% quarter on quarter, driven not only by the interest margin (+1.2%) but also from net commissions (+7.3%). The boost in interest rates allowed the interest margin to grow, year on year, by 56.6%, reaching 505 million euro.

Costs fell by 8.2% quarter-on-quarter and 13.8% year-on-year, reaching €465 million, thanks to savings on personnel expenses, which fell by around 20%, and continued focus on efficiency : cost-income was thus reduced to 52.9%, from 60.4% in the previous quarter, beating the plan targets for 2026. As a result of these dynamics, gross operating profit jumped to 414 million, up by 24.7% quarter over quarter and 67.6% year over year. The cost of credit remained substantially stable, with write-downs of €107m, compared with €111m in Q1 2022.

The collection grows

In the first three months of the year, MPS recorded a growth in total deposits of 3.4 billion, to 177.9 billion. Performing loans rose by 0.9%, drawn from the small business component, and total commercial deposits also grew (+1.3% quarter on quarter), with a greater incidence of assets under administration.

Total gross non-performing loans stood at €3.3 billion at the end of March, essentially stable compared to 31 December 2022, while net non-performing loans fell in the quarter from €1.7 billion to €1.6 billion, with a ratio of 2 .1% on the credit portfolio. Overall coverage of non-performing loans rose by 210 basis points to 50.2%. Capital solidity ratios were down, with the fully loaded Cet1 falling from 15.6% in December to 14.4%, however after discounting the increase in risk-weighted assets (3.8 billion euro), tied to some regulation headwinds. Including the profit for the period, the pro-forma Cet1 rises to 14.9% and the Total capital ratio from 18% to 18.5%.