Banca Sistema SpA (STU:B2S) Q2 2024 Earnings Call Highlights: Strong Growth in Factoring and ...

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In This Article:

  • Operating Profit: Improvement before systemic charges due to positive commercial dynamics and asset repricing.

  • Factoring Turnover: Increased by 13% year-on-year.

  • Pawn Loans Outstanding: Grew by 10% year-on-year.

  • CQ Loans Turnover: Increased by 42% year-on-year.

  • Total Income: Grew by 10.8% year-on-year in the first six months.

  • Adjusted Net Interest Income: Declined by 9.4% year-on-year.

  • Cost of Funding: Stabilized at 3.6%, up 120 basis points year-on-year.

  • Operating Costs: Grew 15.3% year-on-year, with a 5.3% increase net of systemic charges.

  • Adjusted Pretax Profit: EUR15.7 million, up 19% year-on-year.

  • Adjusted Net Profit: EUR9.4 million, up 10.6% year-on-year.

  • Assets Growth: Increased by 1.9% year-on-year.

  • CET1 Ratio: 12.4%, with a transitional basis of 13.1%.

  • Total Capital Ratio: 15.5%, with a transitional basis of 16.2%.

  • Factoring Division Turnover: Grew 13% year-on-year.

  • Pawn Loans Turnover: Increased by 15% year-on-year to EUR113 million.

  • Total Gross Income: Grew 43% year-on-year in the first half.

  • Personnel Costs: Increased by 11.2% year-on-year.

  • Retail Funding: Increased to EUR2.7 billion from EUR1.8 billion year-on-year.

  • Cost of Risk: Increased to 24 basis points from 19 basis points year-on-year.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Banca Sistema SpA (STU:B2S) reported a 19% year-on-year increase in adjusted pretax profit, reaching EUR 15.7 million.

  • The factoring division experienced a 13% year-on-year growth in turnover, indicating strong commercial performance.

  • Pawn loans business showed a 10% year-on-year increase in outstanding, with total turnover rising by 15% year-on-year.

  • The bank's CET1 ratio and total capital ratio improved year-on-year to 12.4% and 15.5%, respectively.

  • Retail funding increased significantly, with term deposits growing to EUR 2.7 billion from EUR 1.8 billion in the previous year.

Negative Points

  • Adjusted net interest income declined by 9.4% year-on-year, despite an improvement from the previous quarter.

  • Operating costs, including systemic charges, grew by 15.3% year-on-year, partly due to the deposit guarantee scheme provisions.

  • The CQ division reported a loss of EUR 8.1 million for the half-year, negatively impacting overall profitability.

  • Cost of risk increased to 24 basis points from 19 basis points in the first half of 2023.

  • The tax rate rose significantly, reaching 38% in the first half, impacting net profit negatively.

Q & A Highlights

Q: Can we expect a similar trend in loan impairments for the full year, given the erratic nature of impairments from quarter to quarter? A: The provisions in Q1 and Q2 are in line with expectations and the cost of risk in 2024 is expected to be higher than in 2023. This aligns with historical averages and future projections, so there is no cause for concern.

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