- Wednesday, October 16, 2024
Italy's Banco BPM is setting ambitious goals to increase its profits and enhance shareholder remuneration over the next several years. The bank has outlined its new strategic plan for the period of 2023 to 2026 with the aim of generating a cumulative net profit of €6 billion ($6.46 billion) during this timeframe, with €4 billion allocated for remunerating shareholders.
Banco BPM exceeded its targets for the 2021-2024 period well ahead of schedule, prompting the formulation of these new financial objectives. Moving forward, the bank plans to distribute an estimated €1.3 billion in dividends next year, with the decision on dividend distribution and share buybacks being made on an annual basis thereafter.
The bank anticipates a potential decline in interest rates beginning next year. As a result, it projects that its net interest income, which represents the difference between earnings from loans and payments made to depositors, will decrease from an expected €3.25 billion this year to €3.05 billion in 2026.
Despite the potential decrease in net interest income, Banco BPM expects net fees to experience a steady annual growth rate of 5% until 2026.
Looking ahead to 2026, the bank forecasts a net profit exceeding €1.5 billion with revenues surpassing €5.4 billion. Banco BPM also expects its common equity Tier 1 Ratio, a crucial measure of a bank's financial strength, to reach approximately 14% by 2026.
For the year 2023, Banco BPM has set a target of achieving a net profit of over €1.2 billion on revenues of around €5.25 billion.
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