Intesa Sanpaolo S.p.A. Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

  • Net Income: €7.2 billion for the first 9 months of 2024, including €2.4 billion in Q3. Up 26% YoY for Q3.
  • Full-Year Guidance: Confirmed at above €8.5 billion for 2024. Raised 2025 net income guidance to ~€9 billion.
  • EPS Growth: +20% YoY, reflecting increased profitability and capital efficiency.
  • Capital Distribution: €7.5 billion total for 2024, including €3 billion interim dividend in November (dividend yield ~10%). Buybacks under consideration given strong capital position (~13.9% CET1 ratio; +70bps YTD).
  • Net Interest Income (NII): Resilient in Q3 despite a 30bps Euribor drop. FY 2024 guidance increased to >€15.5 billion.
  • Commissions: Up 10% YoY in Q3 and 12% YTD. Strong AUM inflows contributed to performance.
  • Operating Costs: Down over 3% YoY excluding labor contract updates and tech depreciation. Additional €1.5B tech investments planned for 2025.
  • Cost Reduction Plan: 9,000 staff exits by 2027; 4,000 exits in 2025 yielding €500 million in savings. Offsetting with 3,500 new hires focused on wealth management and protection.
  • Asset Quality: NPL stock down €900 million YoY. Net NPA ratio below 1%. Cost of risk at 25bps YTD; overlays untouched.

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Operator: Good afternoon, ladies and gentlemen, and welcome to the Conference Call of Intesa Sanpaolo for the presentation of the Third Quarter 2024 Results, hosted today by Mr. Carlo Messina, Chief Executive Officer. My name is Nadia, and I will be your coordinator for today's conference. At the end of presentation, there will a question-and-answer session. [Operator Instructions] You are kindly invited to ask no more than two questions so as to leave room for other participants. In case of any additional questions, the IR team will be at your disposal after the conference call. 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 nine-month results conference call. This is Carlo Messina, Chief Executive Officer; and I'm here with Luca Bocca, our CFO; Marco Delfrate and Andrea Tamagnini, Investor Relations Officers. We just delivered net income of €7.2 billion in the first nine months of the year of which €2.4 billion in Q3. These high-quality results are marked by strong growth in commissions and insurance income. Costs are stable. Asset quality remains top-notch and we strongly increased the common equity ratio and customer financial assets. Our excellent results mean that for this year we can confirm our net income guidance of above €8.5 billion despite significant Q4 managerial actions to strengthen future profitability. At the same time for ne

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