By Helena Smolak
Italy’s Banco BPM aims to raise profits through 2026, boosting its remuneration to investors by five times compared with the past four years.
The Italian bank said Tuesday that it aims for 6 billion euros ($6.46 billion) in cumulative net profit between 2023 and 2026, EUR4 billion of which will go to remunerate shareholders.
These financial targets form part of the bank’s new strategic plan from 2023 to 2026 after targets for the 2021-24 were exceeded more than one year ahead of plan, it said.
Banco BPM said it estimates EUR1.3 billion in dividends next year and will from then on decide annually how to distribute the payout between dividends and share buybacks.
The bank said interest rates could start to decline as early as next year, and forecast net interest income—the difference between what it earns on loans and pays clients for deposit–to decline to EUR3.05 billion in 2026 from an expected EUR3.25 billion this year.
Net fees are expected to grow at an annual rate of 5% through 2026, Banco BPM said.
In 2026, the bank expects to make a net profit above EUR1.5 billion on revenue of more than EUR5.4 billion. Its common equity Tier 1 Ratio, a key measure of a bank’s financial strength, is anticipated to be about 14% as of 2026, the lender said.
For 2023, the bank has guided for net profit of more than EUR1.2 billion on revenue of about EUR5.25 billion.
Write to Helena Smolak at [email protected]
Read the full article here