Core Viewpoint - Intesa Sanpaolo SpA (ISNPY) is currently viewed as a superior value option compared to United Overseas Bank Ltd. (UOVEY) based on various valuation metrics [7] Group 1: Company Overview - Both Intesa Sanpaolo SpA and United Overseas Bank Ltd. are recognized as potential undervalued stocks for investors [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] Group 2: Valuation Metrics - ISNPY has a forward P/E ratio of 8.01, while UOVEY has a forward P/E of 9.46, suggesting ISNPY is more attractively priced [5] - The PEG ratio for ISNPY is 0.90, indicating a better valuation relative to its expected earnings growth compared to UOVEY's PEG ratio of 8.30 [5] - ISNPY's P/B ratio is 1.02, compared to UOVEY's P/B of 1.18, further supporting ISNPY's stronger valuation metrics [6] - ISNPY has a Value grade of B, while UOVEY has a Value grade of D, highlighting ISNPY's superior valuation profile [6]

Financial Data and Key Metrics - Net income for H1 2024 reached €4.8 billion, with Q2 contributing €2.5 billion, marking the best performance in 17 years [4] - EPS grew 15% year-on-year, with total shareholder distribution exceeding €7.4 billion, including a €3 billion interim dividend and a buyback program [6] - Common equity ratio increased to approximately 13.5%, and NPL stock was further reduced [6] - Net interest income grew 2% quarterly and 12% yearly in Q2, with commissions increasing 5% quarterly [12] - Operating margin increased by 15% year-on-year, and net income grew 70% yearly excluding capital gains from the previous year [13] Business Line Performance - Wealth Management and Protection contributed 44% of gross income in H1 2024, with double-digit growth in commissions from management and consulting activities [14] - Commissions and insurance income accounted for over 40% of revenues, the highest in Europe after UBS [15] - Advisory services supported by digital tools saw commissions increase over 40% year-on-year [16] - Property and casualty insurance was driven by non-motor business, with significant upside potential due to low penetration rates [21] Market Performance - Customer financial assets increased by €100 billion year-on-year and €20 billion in Q2, with positive net inflows in asset under management reversing previous trends [20] - Gross NPL stock decreased by €800 million year-on-year and €400 million in Q2, with NPL inflows at historical lows [24] - NPL ratio stood at 1%, among the best in Europe [25] Strategy and Industry Competition - The company is leveraging its fully-owned product factories and a single oversight unit to strengthen its Wealth Management, Protection, and Advisory leadership [22] - Significant investments in technology (€3.2 billion) have positioned the company as a leader in social impact and efficiency [7] - The company expects to benefit from a potential reduction in Euribor, with net interest income projected to reach €15.5 billion in 2024 [13][36] Management Commentary on Operating Environment and Outlook - Management highlighted the strong Italian economy, with GDP growth expected between 0.7% and 1% in 2024 [29] - The company increased its net income guidance to above €8.5 billion for 2024 and 2025, driven by strong performance and sustainable profitability [31] - Management emphasized the importance of maintaining a conservative approach to asset quality and cost of risk, targeting 30-40 basis points [69] Other Key Information - The company deployed €500 million of a €1.5 billion program to address social needs and promote inclusion [8] - Public sector tax revenues increased by €500 million year-on-year, with 40% of cash dividends going directly to households and foundations [18] - The cost/income ratio reached a record low of 38%, the best in Europe [23] Q&A Session Summary Question: Key drivers of net profit guidance for 2024 [34] - Management explained that net interest income is the primary driver, with expectations of €15.5 billion in 2024, supported by hedging facilities [36][37] - The company plans to maintain buffers for future profitability, including potential integration charges and NPL disposals [35] Question: Capital return and buyback plans [43] - Management indicated a positive attitude toward capital return, with potential for additional buybacks in 2024, subject to board approval [45][46] Question: Net interest income outlook for 2025 [49] - Management projected a positive contribution from hedging facilities, with net interest income expected to remain strong even if Euribor declines [50][52] Question: Cost of risk sustainability in the Italian banking sector [61] - Management emphasized a conservative approach, targeting a cost of risk between 30-40 basis points, which they consider sustainable given the low NPL inflows [69][70] Question: Cost/income ratio improvement potential [77] - Management expects the cost/income ratio to stabilize between 40%-45%, driven by technology investments and operational efficiencies [78] Question: Insurance income trends and Wealth Management strategy [80] - Management highlighted seasonality in insurance income and plans to accelerate Wealth Management growth, particularly with the conversion of deposits into asset management products [81][86] Question: Trading income and consolidation in the Italian banking sector [89] - Management downplayed the significance of trading income, focusing instead on core revenues [89] - They expressed skepticism about consolidation in the Italian banking sector, citing limited value creation opportunities [92]

Core Insights - The article compares two foreign bank stocks, Intesa Sanpaolo SpA (ISNPY) and Toronto-Dominion Bank (TD), to determine which is more attractive to value investors [2][5] Valuation Metrics - ISNPY has a Value grade of B, while TD has a Value grade of F, indicating ISNPY is viewed more favorably by value investors [4] - ISNPY's P/B ratio is 0.96, compared to TD's P/B ratio of 1.32, suggesting ISNPY is undervalued relative to its book value [6] - The forward P/E ratio for ISNPY is 7.57, while TD's forward P/E is 9.53, indicating ISNPY may offer better value [8] - ISNPY has a PEG ratio of 0.95, whereas TD's PEG ratio is 1.54, further supporting ISNPY's attractiveness based on expected earnings growth [8] Earnings Outlook - ISNPY has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to TD, which has a Zacks Rank of 3 (Hold) [5] - The article suggests that ISNPY has experienced stronger estimate revision activity, making it a more appealing option for value investors [9]

Core Insights - The article compares two bank stocks, Intesa Sanpaolo SpA (ISNPY) and Canadian Imperial Bank (CM), to determine which offers better value for investors [1] Valuation Metrics - Intesa Sanpaolo SpA has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to Canadian Imperial Bank, which has a Zacks Rank of 3 (Hold) [3] - ISNPY's forward P/E ratio is 7.23, significantly lower than CM's forward P/E of 9.51, suggesting ISNPY may be undervalued [5] - The PEG ratio for ISNPY is 0.91, while CM's PEG ratio is 1.89, indicating ISNPY has a better valuation relative to its expected earnings growth [5] - ISNPY's P/B ratio is 0.92, compared to CM's P/B of 1.22, further supporting the notion that ISNPY is undervalued [6] Value Grades - ISNPY has a Value grade of B, while CM has a Value grade of C, reinforcing the conclusion that ISNPY is the more attractive option for value investors [7]

Core Viewpoint - Intesa Sanpaolo SpA (ISNPY) has experienced a bearish trend recently, losing 6.7% over the past four weeks, but a hammer chart pattern suggests a potential trend reversal due to increased buying interest and optimism among analysts [1][2]. Group 1: Technical Analysis - The formation of a hammer chart pattern indicates that the stock may be nearing a bottom, suggesting potential exhaustion of selling pressure [1]. - A hammer pattern occurs when a stock opens lower, makes a new low, but then closes near or above its opening price, signaling that bears may have lost control [4]. - Hammer candles can appear on various timeframes and are used by both short-term and long-term investors, but should be combined with other bullish indicators for confirmation [4]. Group 2: Fundamental Analysis - There has been a positive trend in earnings estimate revisions for ISNPY, with a 0.7% increase in the consensus EPS estimate over the last 30 days, indicating analysts expect better earnings [2]. - ISNPY currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, which typically outperform the market [2]. - The Zacks Rank serves as a timing indicator, suggesting that the company's prospects are improving, further supporting the potential for a turnaround [2].

Financial Data and Key Metrics Changes - The company reported a net income of €2.5 billion for Q1 2024, marking the best quarterly net income since 2007, with an 18% year-on-year increase in net income [22][28][31] - Earnings per share grew by 21% year-on-year, and the cost-income ratio reached its lowest ever at 38% [29][32] - Customer financial assets increased by €120 billion year-on-year, reaching over €1.3 trillion, with significant growth in both assets under management and assets under administration [20][41] Business Line Data and Key Metrics Changes - Commissions related to management, dealing, and consultancy activities increased by double digits, contributing over 40% to revenues, the highest in Europe after UBS [42][52] - Administrative costs decreased by over 3% year-on-year, while operating costs were down 3% when excluding depreciation for tech investments [54][32] - The wealth management and protection businesses contributed 45% of gross income in Q1 [41] Market Data and Key Metrics Changes - The company experienced a reduction in deposits, attributed to a technical movement of €5 billion related to client tax payments [9] - The net interest income was up over 20% year-on-year, with a stable quarterly performance when adjusted for the number of days [38][40] - NPL inflows remained at historical lows, with a net NPL of €5 billion and an NPL ratio of 1% [55][43] Company Strategy and Development Direction - The company aims to focus on wealth management, protection, advisory, and technological leadership, with significant investments planned in these areas [23][15] - A fees and commissions steering committee has been established to enhance commission growth across all divisions [35][68] - The company is positioned to leverage its fully owned product factories for quick market responses and product customization [31][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving net income above €8 billion for both 2024 and 2025, supported by strong performance in wealth management and advisory services [50][36] - The outlook remains conservative, with expectations of a slight increase in the cost of risk but overall strong credit quality [96][110] - The company is monitoring the impact of BTP placements on client deposits but remains optimistic about its ability to generate significant fee income [84][147] Other Important Information - The company plans to return at least €7.3 billion to shareholders in 2024, including a €1.7 billion buyback [29][51] - The liquidity coverage ratio was over 140%, indicating a strong liquidity position [45] - The company has committed €1.5 billion to address social needs and promote inclusion, with €400 million already deployed [47][48] Q&A Session Summary Question: What are the main actions of the fee and commission steering committee? - The committee is focused on increasing commissions across all divisions, with a strong emphasis on wealth management and protection services [68][100] Question: How do you see the trends in net interest income and deposit costs? - The expectation is for a modest increase in deposit costs, with net interest income remaining strong due to core hedging strategies [90][92] Question: What is the outlook for asset quality and cost of risk? - The company anticipates a stable cost of risk, with no significant deterioration in asset quality expected [96][110] Question: How will the company manage the potential outflows to BTP Valori? - The company plans to actively engage clients to manage their portfolios and mitigate outflows, leveraging its strong position in wealth management [84][147] Question: What is the expected contribution from fee and commissions for 2024? - The company expects double-digit growth in fees and commissions, particularly from wealth management and insurance products [100][119]

tupungato Introduction Earnings season is upon us; as usual, it opened up with the major big banks. JPMorgan Chase & Co. (JPM) beat estimates, yet its shares fell 6.5%. The issue was the softer than expected guidance. Intesa Sanpaolo S.p.A. (OTCPK:ISNPY, IITSF) continues to impress, and it is becoming more and more followed on Seeking Alpha since it secured a spot as one of the best 2024 picks in the market and the number one pick among financial stocks. JPMorgan includes Intesa among its top European p ...

A strong bank for a sustainable world 2023 Results Excellent performance with Balance sheet further strengthened in Q4 Well-diversified business model, ready to leverage on our leadership in Wealth Management, Protection & Advisory JTFS4 loon S February 6, 2024 MIL-BVA362-03032014-90141/VR Best-ever year with €7.7bn Net income 1 €7.7bn FY23 Net income (+76% vs FY22(1)), the best year ever (€7.9bn when excluding the final Resolution Fund contribution) €1.6bn Net income in Q4 (+49% vs 4Q22(1)), the best Q4 ev ...

Financial Data and Key Metrics Changes - The company reported a record net income of €7.7 billion for 2023, marking a 76% increase year-over-year [6][11] - The cost-income ratio reached its lowest level ever at 45% [26] - The company plans to distribute €5.4 billion in dividends for 2023, resulting in a dividend yield of 12%, the highest in Europe [4][17] - Net interest income is expected to grow significantly in 2024, with contributions from hedging facilities estimated to increase by €800 million to €900 million [65] Business Line Data and Key Metrics Changes - Wealth Management, Protection & Advisory services contributed nearly 50% to gross income in 2023, demonstrating resilience even in a high-interest rate environment [25] - Customer financial assets increased by over €100 billion year-over-year, reaching €1.3 trillion [24] - The company has identified €100 billion that can be converted into assets under management, aided by declining interest rates [15] Market Data and Key Metrics Changes - The company maintains a strong capital position with a common equity ratio of 13.7%, which is expected to increase further [29] - Non-performing loans (NPL) stock decreased to less than €10 billion, with a net NPL ratio below 1% [27] - The Italian GDP growth is projected to be above 1% in 2025, indicating a stable economic environment [32] Company Strategy and Development Direction - The company is focused on leveraging its diversified business model to succeed in any interest rate environment, particularly in Wealth Management [14] - A significant investment of €2.8 billion in technology and innovation is underway to enhance digital banking capabilities [8] - The company aims to maintain a high cash dividend payout ratio of 70% while evaluating additional distributions on a year-by-year basis [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a net income above €8 billion for 2024 and 2025, driven by strong revenue growth and controlled costs [35] - The company is well-positioned to benefit from a potential reduction in Euribor rates, which could enhance commission income [46] - Management emphasized the importance of maintaining a conservative approach to cost of risk, targeting below 40 basis points [90] Other Important Information - The company has committed €1.5 billion to address social needs and promote inclusion, with over €300 million already deployed in 2023 [18] - The company is recognized as a leader in ESG initiatives, with €45 billion in new lending to support the green economy [20] Q&A Session All Questions and Answers Question: Can you walk us through the key P&L drivers for net profit guidance for 2024, particularly on NII? - Management highlighted that net interest income is expected to grow due to stable deposit bases and contributions from aging facilities, with a conservative estimate of a 10 to 20 basis points increase in costs [39][41] Question: Regarding the €300 million of non-recurring costs in Q4, is the guidance for stable costs in 2024 excluding this amount? - Management confirmed that the €300 million relates to variable compensation and is a one-off, with the 2024 budget being ambitious and unlikely to repeat this cost [100] Question: How does the company view the potential for capital distribution given strong capital generation? - Management intends to maintain a 70% cash dividend payout ratio and will assess special distributions on a year-by-year basis, emphasizing the importance of a solid capital position [51][52] Question: What is the company's outlook on asset quality and cost of risk? - Management stated that the cost of risk is expected to remain below 40 basis points, with no plans to utilize overlays, reflecting a conservative approach to risk management [75][90] Question: Can you provide an update on client migration for Isybank? - Management reported that 300,000 clients have been migrated to Isybank, with ongoing efforts to accelerate this process [104]

Financial services stocks are a solid addition to any investor’s portfolio. This is because they offer reliable growth throughout the industry and substantial dividend payouts to investors.Financial services are a much-needed resource for individuals, corporations, and institutions alike. It gives individuals and businesses the peace of mind that their financial future is heading in the right direction and allows for attention to be given to other endeavors.Below are several financial services stocks offeri ...