FINANCIALS: Banco BPM Results: Laterals Have Been Solid, M&A Spec Continues

Banco BPM (BAMIIM: Baa3/BB+ pos/BBB-) results are due after the close today. M&A speculation continues to surround this bank, but peer results have been solid, and it’s only tracked the sector over the last month, so expectations aren’t especially high, we feel.

• 1Q24 results were solid with a net income beat and lower loan loss charges. After a period of strong performance, the lack of any guidance upgrade meant there was little reaction to these positive figures on the day.
• BPM has been linked with Unicredit’s M&A aspirations (amongst many other targets) and BPM did deny any interest in a merger with BMPS. Outside of this, Intesa results last week were relatively positive, BMPS’s this morning also solid.
• Spreads have been significant outperformers since last results (-2bp vs. €IG banks +20bp) though most of that performance came in the weeks immediately after results. The equity has been much more in line with the peer group.
• Revenue estimates were pushed up 1-2% following last results, EPS up 2% for this year and over 5% for FY25.

Conf call is 1700 (London time) at: https://87399.choruscall.eu/links/bancobpm240806.html