Banca Sistema (BST) H1 2024 earnings summary

Executive summary

• Net profit for H1 2024 was €6.0 million, down 20% year-over-year, mainly due to higher taxes, systemic charges, and minority interests, while adjusted profit rose 11% to €9.4 million, driven by strong factoring, pawn lending, and CQ turnover.

• Total income increased 10.8% year-over-year to €54.8 million, supported by factoring and fee growth, despite higher funding costs and a negative CQ contribution.

• Operating margin and profits before systemic charges improved, reflecting positive commercial dynamics and asset repricing.

• The 2024-2026 Strategic Plan focuses on strengthening the multi-specialist model, expanding factoring, retail, and collateralised lending.

Financial highlights

• Adjusted net interest income fell 9.4% year-over-year to €32.5 million, impacted by a 3.6% funding cost (up from 2.4% in H1 2023).

• Net commission income rose 58% year-over-year to €15.9 million, mainly from factoring and collateralised lending.

• Operating costs increased 15.3% year-over-year to €40.3 million, mainly due to earlier Deposit Guarantee Scheme provisions.

• Cost of risk increased to 24bps from 19bps in H1 2023.

• Total assets grew to €4.74 billion, up 3.7% since December 2023.

Outlook and guidance

• Factoring turnover and Superbonus Factoring contribution are expected to remain strong in H2 2024.

• Retail loan (CQ) division is expected to remain loss-making in 2024 due to legacy portfolio, with improvement and possible return to positive total income in 2025.

• Funding costs are projected to remain stable at 3.6% for 2024, with potential decrease in 2025; no further Deposit Guarantee Scheme charges expected after H1 2024.

• Kruso Kapital is set to complete a Portuguese acquisition by year-end.