Banca Sistema (BST) H1 2025 earnings summary

Executive summary

• Net profit for H1 2025 reached €14.6 million, up 145% year-over-year, driven by strong income growth, improved profitability, and cost control across core business lines.

• Gross NPEs surged 75% quarter-on-quarter in Q1 2025 due to regulatory reclassification, but managerial actions in Q2 led to an 11% reduction in gross NPEs and a 21% drop in gross past due loans.

• Retail funding accounted for 72% of total funding, with cost of funding down to 3.07% in H1 2025, a 53 basis point decrease year-over-year.

• A public offer for 100% of shares has been announced by Banca CF+, with the board's opinion pending and potential non-recurring costs of €9.3 million if change of control occurs.

• Total assets decreased by 6.7% to €4.39 billion, reflecting lower loan and securities volumes.

Financial highlights

• Revenues increased 27% year-over-year to €69.8 million, driven by a 41% increase in net interest income and strong Superbonus contribution.

• Net profit surged 145% year-over-year to €14.6 million; pre-tax profit was €24.1 million, up 128% year-over-year.

• Operating costs rose modestly by 2% year-over-year, aided by the elimination of the deposit guarantee scheme.

• Cost of risk increased to 35 basis points, up from 24bps in H1 2024.

• Total assets: €4.39 billion (-6.7% vs. Dec 2024); Factoring loans: €1.53 billion (-2.8%); Salary-backed loans: €652 million (-7.0%).

Outlook and guidance

• Funding cost is projected to average around 3% for 2025, with favorable trends expected to continue.

• Securitization in the entertainment sector and capital reserves will support growth and RORAC with low capital consumption.

• Further reduction in past due loans is targeted, primarily through collections and agreements with public administration.

• Capital absorption reduction actions and optimization measures are expected to support capital ratios.

• A non-recurring charge of €9.3 million is anticipated if a change of control occurs due to a public tender offer.