MPS: results exceed expectations, profit rises by 21 per cent to 1.65 billion. Valuations for the Intesa OPAS to be finalised by November

Monte dei Paschi di Siena has reported strong results for the first nine months of the year, beating analysts’ expectations. Cumulative net profit for the period from January to September stood at €1.657 billion, up 21.2 per cent on the previous year. Revenue rose by 5.6% to €6.023 billion, driven by net interest income (+3%) and net commission income (+3.5%). Operating costs remained stable at €2.562 billion, but the cost-to-income ratio improved to 43 per cent, two percentage points lower than a year earlier.

In the third quarter alone, net profit stood at 543 million euros, compared with the consensus estimate of 533 million, whilst revenue reached 1.998 billion, compared with the forecast of 1.978 billion. It was the net operating profit in particular that exceeded expectations, coming in at 1.024 billion, 6.1 per cent above estimates (965 million). “MPS continues to meet its targets,” said Monte dei Paschi’s CEO, Luigi Lovaglio, in a call with analysts. “If I had to sum up the first nine months in three words, they would be: growth, quality and strength.”

However, the presentation of the quarterly results provides an opportunity, for CEO Luigi Lovaglio to take stock following the rejection, on 29 October, by shareholders of Siena’s defensive plan, which envisaged the acquisitions of BancoBpm and Banca Generali and the merger and spin-off of Mediobanca. “On every long journey, there comes a time when the course changes, but a change of course does not mean losing sight of the direction, which remains clear: we will continue to achieve our objectives, generate results and preserve the bank’s value, and we will manage the second phase with rigour and a sense of responsibility. This is what we owe to our customers, our employees, our communities and our businesses,” the banker explained during a conference call with analysts. “The course may have changed, but our compass has not. Today, our responsibility is to manage the next stages with the same discipline that has brought us this far.”

Turning to the financial results, on the basis of these figures, the bank has revised its forecast for pre-tax profit for the current financial year upwards, from €3.6 billion to €3.7 billion. MPS now expects to end the year with a CET1 ratio of 15.5 per cent, assuming a dividend per share of €0.86. ‘The potential impact on 2026 results arising from the approval of the 2027 Budget Law is still being assessed and is not included in the guidance,’ the presentation states. Capital strength remains high: the fully-loaded CET1 ratio stands at 16.4 per cent, up from 16.3 per cent in June, with a buffer of around 680 basis points above regulatory requirements. In terms of asset quality, however, the cost of credit stands at 38 basis points, whilst the net NPE ratio is 1.2 per cent.

With regard to extraordinary transactions, MPS confirms that the Board of Directors is examining the public takeover bid launched by Intesa Sanpaolo. The assessment will be completed in the coming days and the bank intends to announce its position ‘by November’ on the basis of the offer document, as stated in a press release.