Castagna: 'BancoBpm is worth over 12 billion. Risk stopped at least until 2026'

However, the market expects NPLs to grow again sooner or later, which is why it is asking banks to increase coverage.

Despite widespread pessimism, the 3-year default rate has been below 1%. If it stays that way, our cost of risk will be between 30 and 40 points, less than the expected 45 points at the end of 2026. Thanks to the clean-up in recent years, we only have 1.5 billion in non-performing loans: of these, about 700 million are covered at about 70%; the remaining 800 million have average public guarantees of 85%, and are prudentially set aside at 28%. This is ample coverage; we see no need to make further increases.

In April he had opened up the possibility of updating the earnings per share guidance at the half-yearly report. Is the revision becoming more concrete?

We will take stock at the end of July, when we will have seven months of operations that will allow us to see if we should increase the guidance, as we hope. We don't want to rush over the current year, but one thing is certain: we are determined to reach the targets set by the industrial plan (with 6 billion in profits over the three-year period, of which 4 billion to be distributed, ed.) and go further. The numbers are very good.

In the meantime, the stock has already grown 120% in three years. Is there really still room to grow?

No doubt. The stock is still worth relatively little compared to what it should be, given the profitability outlook. And I believe we still have a long way to go in realising the plan profits.

How far?

Let's look at the numbers. Today, with about EUR 9.8 billion market cap, we are worth about 7 times 2023 profits, this is a historically very low ratio. The profit we expect to make per plan is 1.5 billion, today the market consensus is lower. If we succeed, as I think we will, in giving continuity to profits, our profitability targets will be increasingly reflected in the consensus, and the multiple may also increase: already at 8, it would mean a value of over 12 billion. We continue to be attractive to the market because we are a public company, with the important support of an industrial shareholder such as Crédit Agricole and of social security institutions and funds.

You have long insisted on a stand-alone strategy. But, in perspective, could something change?

The domestic risk in my opinion is at least 18 to 24 months later than it is today. It is no coincidence that we are looking ahead to 2026 with our plan. As long as the economy pulls and results are good, there will be no desire to do consolidation, which in 90% happens to resolve difficult situations. At the end of this cycle, we will see who will need to do aggregations. If anyone makes a move earlier, perhaps it is because they think they cannot continue to grow as they have done so far.

Without M&A, how can one grow in a competitive market such as Italy's?

There are many ways to grow. First of all, we must exploit the potential of the joint ventures we have entered into on bancassurance and e-money, which will begin to bear fruit in the second half of the year. Then we will have a natural shift from direct deposits to asset management: this will give us a lot of growth in commissions, as demonstrated already in the first quarter.

And then?

Once we have strengthened and consolidated our product factories, we will need a greater distribution force, which will come through agreements with banks active in the territory, such as the partnership with Iccrea on monetics, or, also, from having new networks of financial advisors who can sell asset management, insurance, consumer credit or monetics products. With the logic, always, of creating value for shareholders.

Could BancoBpm ever be interested in Mps under certain conditions?

Today there are no conditions for an extraordinary operation. And it would be very risky to distract ourselves from this stand-alone path that we want to continue with great determination. The country and the economy are doing well, GDP is growing, the spread is under control. Of course, a rigorous attitude on debt is needed, but it is the trajectory that counts, and the government is doing well to stay the course in a complicated period.

European risiko is also struggling to get off the ground. Without common European rules do you see cross-border aggregations impossible?

If this does not happen, there must be some reason. Until we find a unity of vision on rules, it will be very difficult. We may see small add-on operations, but not transformative industrial aggregations. It is not that time yet.