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]
Intesa Sanpaolo(ISNPY) - 2024 Q1 - Earnings Call Transcript