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Even MPS of the Treasury is bothering the Treasury about the tax on extra profits

6 months ago babelfish

Even MPS of the Treasury is bothering the Treasury about the tax on extra profits

All the details on the MPS half-yearly report with the tax dossier on extra profits and with the beneficial effects of the ECB's high rates also for the bank controlled by the Ministry of Economy

MPS, the Treasury bank, is messing with the Treasury.

MPS will not pay the tax on extra profits by setting aside an amount of no less than 312.7 million euros, equal to 2.5 times the amount of the tax. The Sienese institute communicates this in the note on the accounts for the first nine months of the year. Therefore, even thecredit institution controlled by the Ministry of Economy with 64.23% did not pay the tax on banks' extra profits foreseen by the government and then sweetened by law with the possibility of allocating the amount of the tax to a reserve; possibility used by all banks so far, including another state-controlled credit institution such as Mediocredito Centrale ( here is the in-depth analysis by Start Magazine ).

LITURRI'S COMMENT

MPS PROFIT

But let's go back to the quarterly report of the Siena banking group. MPS closed the first nine months of the year with a net profit of 929 million euros, compared to a loss of 334 million in the same period of 2022. Third quarter profit stood at 310 million, above of the 238 million expected by analysts.

THE RESULTS OF THE FIRST 9 MONTHS ACCORDING TO MPS

“The results of the first nine months confirm a strong growth in profitability and the continued ability to generate capital in a sustainable way”, says MPS, underlining how the return on tangible capital (rote) in 2023 was equal to 15.1% and the newfound profitability was accompanied by a "further strengthening" of the fully loaded CET 1, which rose to 16.7%, up by over 80 basis points quarter on quarter. Revenues rose by 22.9% to 2.8 billion, driven from the jump in the interest margin (+62.7% to 1,687.9 million) while commissions fell by 6.5% to 986.6 million. Operating costs contracted by 15.2%, to 1,357.8 million, and by 4.1%, to 307 million, loan adjustments. The interest margin is so high due to the high rates wanted by the ECB, is the unanimous comment of the analysts.

HOW IS THE GROSS OPERATING INCOME GOING

The gross operating profit thus more than doubled to 1,446 million, of which 509 million in the third quarter, while the cost-income fell to 48%, a further reduction compared to the half-year period and well above the plan objective for 2026.

MPS COMMERCIAL COLLECTION NUMBERS

Total commercial collection, direct and indirect, also grew in the third quarter thanks to the increase in deposit volumes, with a global dynamic of +2.9% since the beginning of the year. The cost of risk in the nine months stood at 52 basis points, with a third quarter at the levels of the previous ones, in line with the guidance for 2023. The stock of pro forma gross impaired loans remained stable in the quarter at 3.4 billion , with a pro forma gross percentage of impaired loans at 4.1% (4.2% at the end of 2022) and a pro forma net figure at 2.2% (2.2% at the end of 2022). The overall pro forma coverage rate of impaired loans is equal to 49.1%, up 100 basis points compared to the end of 2022.

CREDIT DOSSIER

Following the ruling of the Court of Cassation, which acquitted the former leaders Giuseppe Mussari and Antonio Vigni in the derivatives trial, MPS downgraded the risk relating to some legal proceedings and out-of-court requests from "possible" to "remote". Consequently, we read in a note, the overall amount of litigation and out-of-court requests for financial information disclosed in the period 2008-2015 was reduced from 4.1 to 2.9 billion. Furthermore, all out-of-court claims notified to the bank after 29 April 2018, in accordance with the provisions of the Supreme Court, "are to be considered time-barred".

THE 2023 PROFIT GUIDANCE

MPS has updated its 2023 profit guidance upwards, now expected to be "above 1.1 billion euros", thanks to the boost from the interest margin, with a Cet1 ratio expected above 17%. You can read it in the slides presenting the results.

LOVAGLIO'S WORDS

I am pleased to present a series of very solid results that demonstrate the improvements achieved by the bank” over the last 12 months. MPS is now "among the best banks in the Italian panorama, capable of being sustainably profitable and generating capital quarter on quarter", with "200 basis points of capital generated in the last six months". MPS CEO Luigi Lovaglio (in the photo) said this in a conference call with analysts. “We are well positioned to compete in the market and proud of the strength of our brand,” which has “a strong and loyal customer base.”

DIVIDEND QUESTION

We are well positioned to remunerate our shareholders in line with the latest guidance." MPS CEO Luigi Lovaglio said this in a conference call with analysts, confirming the intention "to advance the dividend with the 2024 profit".

RATING DOSSIER

“We are working closely with the rating agencies who are monitoring our situation” and “we expect a rating review in 2024 and perhaps even earlier”. MPS CFO Andrea Maffezzoni said this in a conference call, when asked by an analyst on the possibility that MPS's rating could be revised upwards.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/pure-mps-del-tesoro-fa-marameo-al-tesoro-per-la-tassa-sugli-extraprofitti/ on Wed, 08 Nov 2023 09:32:25 +0000.