MPS beats expectations, second-quarter profits rise

MILAN – MPS posted a positive quarter. The bank closed the period with a profit of €479 million, up 15.7% from the first quarter and exceeding analysts' forecasts. The negative result for the first half (-23% to €892 million) was primarily due to the €457 million tax benefits it enjoyed last year.

In terms of revenues, Monte dei Paschi closed the six-month period with €2.054 billion (+1.1%), driven by a 9.1% increase in commissions to €802.5 million, which offset the decline in net interest income (-6.7% to €1,094 million). Operating expenses rose 2% to €943 million, with gross operating profit (EBITDA) reaching €1,111 million (+0.5%). Loan losses fell 14.2% to €175.1 million, with the cost of risk decreasing to 43 basis points, while net operating profit rose to €936.1 million (+4.3%).

In terms of capital, the statement states, the fully loaded CET1 ratio stands at a record level for the first quarter (19.6%) and "at the top of the banking system," with a capital buffer of 840 basis points above the Tier 1 ratio requirement. Asset quality has improved, with the stock of non-performing loans (NPEs) decreasing by approximately €500 million compared to March 31 of this year, also thanks to the recently finalized sale of €0.3 billion in bad loans, which reduces total gross non-performing exposures to €3.1 billion and net non-performing exposures to €1.7 billion.

MPS highlighted the "excellent performance" of the second quarter, with a net operating profit of €488 million, up 9.1% compared to the previous quarter, thanks to the good performance of the interest margin (+1.5%) and commissions (+1.7%), accompanied by the optimization of operating costs (-0.3%).

Finally, on the commercial front, the first half of the year saw performing loan volumes rise to €65.1 billion (+4.9% year-to-date), with a significant acceleration in mortgage lending to households, which more than doubled year-over-year, and consumer credit (+20%). Total funding amounted to €171 billion, up over €4 billion in the second quarter, with positive performance across all components.