Because Mps always likes red
Numbers and trends from the MPS 2022 budget. The article by Emanuela Rossi
Having archived a 2022 in the red , above all due to the 925 million spent on the 4,125 incentivized redundancies, Montepaschi is preparing to get back on track as demonstrated by the fourth quarter profit, above forecasts. "Mps is no longer a systemic problem but a real asset of value for the country" commented the managing director, Luigi Lovaglio , according to whom "after difficult years the bank is in a position to choose and reach its safe haven".
MPS LOSS, REVENUE AND COLLECTION
So 2022 closes with a loss of 205 million compared to the profit of 310 million recorded in 2021. As explained by the note released by the bank, the accounts are burdened by the 925 million of restructuring costs linked to the redundancy incentive plan. Without these, the year would have ended with a profit of 720 million. Confirmation is given by the figure for the fourth quarter with profits of 156 million euros, more than double the 75 million hypothesized by analysts.
Montepaschi also points out that the result for the year discounts 180 million in contributions to the Fitd and the Single Resolution Fund and at the same time benefits from 425 million from the revaluation of deferred tax assets (Dta).
Plus sign for revenues (+3.6% over the year) at 3,088 million thanks to the +26% of the interest margin, driven by the rise in interest rates, and despite the drop in commissions (-8%) and the result – lower compared to 2021 – of trading activity and income from equity investments. In the fourth quarter the growth in revenues is higher, +15.6%, thanks to +31.4% of the interest margin (+31.4%).
On the other hand, there is a minus for operating expenses at 2,099 million (-2.3%), which allow the gross operating result to rise from 874 to 989 million (+13.2%), with a contribution of 333 million in the fourth quarter , (+60% on a quarter and on a year), and for loan losses, which rose from 250 million in 2021 to 417 million in 2022.
Direct deposits also decreased, down by 9.2% to 82 billion euro, indirect deposits, -11.5% to 92.4 billion euro, with -11.6% of the managed component to 57.7 billion and -11.4% of that administered at 34.7 billion.
During 2022, loans to customers also decreased to 76.3 billion euro (-3.9%).
CREDIT QUALITY AND CAPITAL REQUIREMENTS
Asset quality improved, boasting a 20% drop to 3.3 billion euro in the stock of non-performing loans thanks to the "disposal of a portfolio of 0.9 billion" and the "continued proactive management of positions". Gross non-performing loans also decreased, from 4.9% to 4.2%, and net ones, from 2.6% to 2.2%. Good growth in the main indicator of capital solidity, the fully loaded Cet 1 ratio, of 15.6% compared to 11% at the end of 2021.
DAMAGES CLAIMS
In presenting the accounts, Rocca Salimbeni also took stock of the petitum, to which a claim for damages of 700 million euros was added in January. The total, both in judicial and out-of-court proceedings, therefore rises to approximately 4.1 billion euros, compared to 4 billion euros as at 30 September 2022 and 3.4 billion at the end of 2022. It should also be specified that "two new positive sentences in the first weeks of 2023 confirm the positive jurisprudential trend of previous years" and that "the majority of out-of-court claims" – amounting to 2.2 billion euros – "are promoted by the same consultancy firm on behalf of institutional investors, in most cases characterized by lack of documentation, legitimacy and causal link".
During the conference call with the analysts – reports Ansa – Lovaglio highlighted how the claims for damages “arrive punctually before the presentation of the data and the final preparation of our financial statements. As I have already said several times, I believe that the bank has adequately dealt with this type of request and we believe that from a capital point of view it is capable of managing this type of risk". According to the CEO "the positive judgments of January and February are not significant in terms of the amount but important because they demonstrate what the courts think about this story" and that "the bank behaved correctly".
LOVAGLIO: AFTER DARK PERIODS NOW THE ROAD IS OPEN FOR ANY OPERATIONS
Lovaglio then took stock of what is happening in Siena. "It's been a year since I had the honor of sitting in the front row of this bank, I didn't think that after only 7 months of launching the plan I would find myself here presenting quarterly results with a profit of 156 million, a cost income of 60% and a core tier 1 of 15.6%” he commented when speaking to analysts. For the CEO, reports Ansa, the fourth quarter of 2022 was "a turning point" for MPS and the numbers obtained in 2022 are "capable of generating sustainable results over time".
For 2024, he confirmed, the aim is for a pre-tax profit of 700 million euros which can be approached "as early as 2023". Certainly, Lovaglio underlined, "the bank has essentially come out of this dark period and this should pave the way for any future operation the bank should undertake".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mps-bilancio-2022/ on Wed, 08 Feb 2023 11:57:39 +0000.