Banca Monte dei Paschi di Siena Reports Strong Half-Year Earnings
By Pierre Bertrand
Shares of Banca Monte dei Paschi di Siena (BMPS) saw an uptick in early trading on Friday after the Italian bank announced positive results for the first half of the year. The bank reported an increase in earnings and provided a promising outlook for the remainder of 2023, including a projected net interest income of over €2.1 billion ($2.30 billion).
As of 0748 GMT, BMPS shares were trading 3.1% higher at €2.54, although they had previously reached a peak of over 6% earlier in the session.
In addition to the anticipated net interest income, BMPS also expects to generate more than €1.3 billion in fees, while keeping costs below €1.85 billion. The bank aims for a CET 1 ratio of 16.5% and a pretax profit exceeding €1 billion for the year 2023.
During the first six months of this year, BMPS recorded a significant increase in net profit, reaching €619 million compared to €53.1 million in the same period last year. Total revenue also experienced substantial growth, rising by 19% to €1.85 billion.
The solid performance was primarily driven by a remarkable 64% surge in net interest income, which can be attributed to higher interest rates and an increase in interest income from loans.
According to research analysts Azzurra Guelfi and Guru Prasad Chowdhary from Citi, the bank's above-average net interest income outlook surpasses market consensus and indicates stronger overall profitability. They note that BMPS' estimated cost of risk guidance of around 55 basis points is more favorable than the consensus of around 64 basis points.
BMPS is optimistic about its future prospects and aims to continue achieving substantial growth and profitability.
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