BPER Banca posts solid Q2 results with improved metrics

Investing.com -- BPER Banca delivered strong second-quarter 2025 results, exceeding analyst expectations with pre-provision income 12% above forecasts, driven by stronger net interest income and lower operating expenses.

The Italian bank reported net interest income 2% above consensus expectations, supported by a 3% quarter-over-quarter increase in loan volumes that helped offset interest rate impacts.

Commission income was in line with expectations, showing a 1.2% year-over-year improvement led by market fees and bancassurance fees, which grew 4% and 8% respectively, while commercial banking fees declined 1.9%.

Overall revenues came in 4% better than expected, while operating expenses were also 4% lower than anticipated. Human resources costs and headcount decreased by 9% and 6% year-over-year, respectively.

Net income beat expectations by 19%, further supported by lower-than-expected loan loss provisions.

Asset quality showed improvement with loan loss provisions 18% better than expected at approximately €70 million, representing a cost of risk of 32 basis points in the quarter, up slightly from 30 basis points in the first quarter.

The non-performing loan ratio decreased by 10 basis points quarter-over-quarter, while coverage increased to 55.6% from 54.2% in the previous quarter.

BPER’s capital position strengthened significantly, with the CET1 ratio reaching 16.2%, up 40 basis points quarter-over-quarter and above the consensus expectation of 15.9%. This improvement was attributed entirely to organic capital generation, net of dividends.

The bank updated its 2025 standalone guidance, projecting revenues of €5.5 billion, up from the previous €5.4 billion forecast. Net interest income is expected to decline by mid-single digits, while commission income is projected to increase by mid-single digits.

The cost-to-income guidance suggests operating expenses will be 1% below consensus expectations, and the cost of risk is guided at less than 40 basis points.

Banco Popolare (BIT:BAMI) di Sondrio (BIT:BPSO), which is being integrated into BPER Banca, also reported strong quarterly results, with net interest income and commissions exceeding forecasts.

Management comments regarding the integration process were described as conciliatory, suggesting a potentially smooth merger process.

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