Quarterly results exceeding forecasts and a target price hike give Banco BPM a boost

(Il Sole 24 Ore Radiocor) - Banco Bpm is celebrating on the stock market following better-than-expected quarterly results and the revision of profit and dividend forecasts, whilst, with the prospect of a merger with MPS now off the table, the top management are opening the door to a merger with the Italian division of Crédit Agricole. The Piazza Meda-based bank’s shares are the top performers on the main board of the Milan Stock Exchange.

The bank closed the first six months of 2026 with a net profit from continuing operations of 1.1 billion, up 3.9 per cent compared with the same period in 2025. Net accounting profit was down by 12.7% (to 1.06 billion) and reflects the fact that in 2025 the bank had revalued its stake in Anima by over 200 million. In the second quarter alone, profit stood at 580 million, compared with the 533 forecast by the market consensus. Turning to the half-year, operating income stood at 3.2 billion (+5.7 per cent), with net interest income at 1.5 billion (-4.1 per cent) and net commission income at 1.4 billion (+13.8 per cent). Operating expenses totalled 1.4 billion (+1.5%), resulting in a cost-to-income ratio falling to 43%, “the best level ever”. As for capital strength, the CET 1 ratio stands at 14.4%.

These results have enabled Banco Bpm to revise upwards its estimates for both profit for the full year 2026 and shareholder returns. For the full financial year, the bank now expects profit in excess of 1.95 billion (the previous target was “around 1.95 billion”) and a dividend per share of one euro or more (up from “around one euro”). The cumulative shareholder remuneration target for the 2024–2027 period has thus been increased to approximately 7 billion from the previous 6 billion ‘thanks to the increase in distributable profits and the ample availability of capital, which will maintain a substantial margin above the plan’s minimum threshold of 13 per cent’.

These figures have received unanimous praise from analysts. In particular, Barclays considers the second-quarter results to be solid and welcomes the upward revision of the forecasts, “particularly with regard to distribution”.

BPM’s results are “well above expectations”, particularly in terms of net profit for the April–June 2026 period, “thanks to stronger top-line growth and a lower cost of risk”, writes Intermonte. Furthermore, the investment firm has raised its target price for the share to €15.7, whilst confirming its “Neutral” recommendation, as it believes that ‘the current valuation already incorporates the improved earnings profile alongside a certain speculative appeal on the M&A front, which is not sufficient at this stage to justify a more constructive view’.