Q: Why has BPER set the CET1 guidance above 15.5% when it is currently at 16.2%? Are there trends that could lead to more capital utilization, considering expected loan growth? A: Gianni Franco Papa, CEO: We maintain a prudent approach, ending the first half at 16.2% and guiding conservatively at 15.5% for year-end. This is due to continued loan growth and the integration of BPSO. We prefer to be conservative and will see how things progress by year-end.
Q: Can you update us on the actions taken to maintain NII resilience despite decreasing rates, and what should we expect for NII in 2026? A: Simone Marcucci, CFO: The improvement in NII is driven by loan growth, which will continue but at a smoother pace. We expect NII for the next quarter to be at the same level or slightly decreasing. For 2026, we confirm our plan but cannot provide additional details at this moment.
Q: What is the expected capital consumption from the Sondrio transaction, and what is driving loan growth in Italy? A: Gianni Franco Papa, CEO: We expect the CET1 ratio for the combined entity to be around 15% by year-end. Loan growth is driven by demand across all sectors, including residential mortgages, consumer credit, and corporate loans, with a focus on high-quality customers.
Q: Regarding the integration of Sondrio, what are the moving parts in your assumption of a 15% CET1 ratio by year-end? A: Gianni Franco Papa, CEO: We assume 81% ownership of Sondrio and have considered half of the PPA indicated by Sondrio. We are starting the process to assess the new PPA and have not taken any effects from PPA conservatively.
Q: Can you elaborate on the potential synergies with Popolare Sondrio, particularly in FX trading on behalf of clients? A: Gianni Franco Papa, CEO: We confirm our synergies at EUR290 million, with EUR100 million from revenue synergies and EUR190 million from cost synergies. Sondrio’s strength in FX trading will be integrated into BPER, potentially improving this revenue line.
Q: What is the timeline for the integration of Sondrio, and are there any legal risks in merging with 80% ownership? A: Gianni Franco Papa, CEO: The integration, including IT systems, is expected by April 2026. We believe the merger process is clear and transparent, with necessary fairness opinions and regulatory approvals in place, minimizing legal risks.
Q: Could you provide guidance on NII for 2026 and the strategy for BPER’s government bond portfolio? A: Simone Marcucci, CFO: We confirm our plan for NII in 2026, with potential for improvement. The bond portfolio strategy involves maintaining current levels, with recent purchases focused on Italian government bonds due to attractive spreads.
Q: With strong stress test results and the merger with Sondrio, could there be an extraordinary dividend or increased payout? A: Gianni Franco Papa, CEO: We prefer a conservative stance, focusing on the integration of BPSO. While an extraordinary dividend is not foreseen, we may consider increasing the payout ratio from 75% if organic capital generation remains strong.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
