Banco BPM joins UniCredit in beating profit forecast as fee drive pays off
Banco BPM’s Strong First Quarter Performance and Strategic Moves
By Andrea Mandala
First Quarter Results Surpass Expectations
MILAN, May 5 (Reuters) - Italy's fourth-largest bank Banco BPM on Tuesday reported a higher than expected first quarter net profit, boosted by a surge in net fees that more the offset a decline in its lending income.
Diversification Beyond Traditional Lending
Banco BPM, which last year dodged a takeover attempt by bigger rival UniCredit, has been working to diversify its revenue streams away from the traditional lending business.
Leadership and Merger Speculation
Banco BPM, whose main shareholder is France's Credit Agricole, recently handed a new mandate to long-standing CEO Giuseppe Castagna amid mounting market speculation about a potential merger with rival Monte dei Paschi di Siena .
BPM owns 3.7% of Monte dei Paschi and last month played a key role in a fraught shareholder vote that reinstated the rival's ousted CEO at the helm.
Revenue Breakdown and Strategic Milestones
BPM said income not tied to interest rates accounted for 53% of total revenues in the first quarter - already surpassing a goal of more than 50% set for 2027 under the latest strategic plan.
Net profit came in at 480 million euros ($561 million) for the three months ending March 31, down 6.1% from a year earlier, but above a Reuters-compiled analyst consensus of 451 million euros.
UniCredit’s Parallel Success and Fee Growth
Earlier on Tuesday also UniCredit, the first Italian bank to report quarterly earnings, beat expectations with its financial results.
Net fee and commission income rose to a record 708 million euros, up 19.2% from last year thanks to the integration of fund manager Anima Holding, whose acquisition BPM managed to complete as it fought off UniCredit's bid.
Outlook and Profit Targets
The bank said it expected to exceed its plan's 2026 pre-tax profit target, and expressed confidence it would pay a dividend of 1 euro per share.
It added it remained on track to meet its 2027 net profit goal of 2.15 billion euros, bringing cumulated net income in 2024-2027 to 7.7 billion euros.($1 = 0.8552 euros)
(Reporting by Andrea Mandalà; Editing by Valentina Za)
