Intesa Sanpaolo S.p.A. Q2 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

  • Record Earnings: Net income of €4.8 billion in H1 2024 (+13% YoY), with €2.5 billion in Q2—marking the best H1 in 17 years and best-ever Q2.
  • Upgraded Guidance: FY 2024 and 2025 net income expected to exceed €8.5 billion.
  • Shareholder Returns: Total €7.4 billion for FY 2024, including a June-launched buyback and €3 billion interim dividend (to be paid in November). Dividend yield stands at 11% of market cap.
  • Top-Line Growth: Revenues up 10% YoY; net interest income up 16% YoY and 2% QoQ in Q2; commissions up 7% YoY and 5% QoQ; insurance reached record high.
  • Operating Margin: Increased by 17% in H1; cost/income ratio improved to a record-low 38%.
  • Cost Control: Operating costs were down 4% when excluding tech investment depreciation and labor contract impacts. Administrative costs declined by 2.5% YoY.
  • Asset Quality: NPL stock fell €800M YoY and €400M QoQ; Stage 2 loans down 8% YoY. NPL ratio steady at 1%. Cost of risk maintained between 30-40 bps.
  • Capital and Liquidity: Common Equity Tier 1 ratio above 13.5%, up 30 bps H1 and 20 bps in Q2. Significant capital excess allows room for future buybacks and debt optimization despite upcoming Basel IV impact (40 bps in 2025).

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Operator: Good afternoon, ladies and gentlemen, and welcome to the conference call of Intesa Sanpaolo for the presentation of the first half 2024 results, hosted today by Mr. Carlo Messina, Chief Executive Officer. My name is Sandra, and I will be your coordinator for today's conference. [Operator Instructions] I remind you that today's conference is being recorded. At this time, I would like to hand the call over to Mr. Carlo Messina, CEO. Sir, you may begin. Carlo Messina: Welcome to our first half results conference call. This is Carlo Messina, Chief Executive Officer; and I'm here with Luca Bocca, our CFO; and Marco Delfrate and Andrea Tamagnini, Investor Relations Officers. We just delivered net income of €4.8 billion in the first half of the year, of which €2.5 billion in Q2. These were the best 6 months of the past 17 years and the best ever Q2. These are high quality results. Reflecting a strong acceleration in commissions and insurance income and resilient net interest income, our top-line growth was the highest in Europe among peers. Costs are down even as we invest heavily in technology, while asset quality remains excellent. Our strong results mean that we can increase fully our net income guidance to above €8.5 billion for both this year, even when taking into account possible managerial actions to strengthen future profitability, and next year. Earning per share grew 15% on a yearly basis, and in 2024, we will reward shareholders with a total distribution of mor

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