BPER Banca Shares Surge as Italian Lender Details Significant Payouts in 2027 Strategy

Milan-listed shares in BPER Banca reached a nine-year high on Thursday after the Italian bank revealed its plans to provide substantial payouts to investors as part of its business strategy through 2027.

In its presentation, the bank outlined a “significant remuneration” strategy for shareholders, which includes a dividend payout ratio of 75% of income from 2025 to 2027.

BPER Banca anticipates total revenues to exceed 5.6 billion euros by 2028, up from an expected 5.4 billion euros this year. The 2027 revenue target is projected to be around 5.5 billion euros, indicating a compound annual growth rate of approximately 1.5%.

Additionally, the bank expects net commissions as a percentage of total revenue to increase by 4 percentage points, reaching about 42% in 2027, and potentially rising further to around 43% in 2028.

Operating costs are projected to decrease to about 2.4 billion euros by 2027, reflecting a 7% reduction from current-year estimates. Consequently, net income is forecasted to rise by 15% to roughly 1.5 billion euros.

Analysts from Jefferies noted that BPER Banca’s strategy moves away from overly cautious forecasts and highlights its true potential. They remarked that the anticipated payouts and the bank’s goal of achieving a tangible equity return of over 16% by 2027 exceed expectations.

In August, BPER Banca raised its interest margin guidance for 2024 following an increase in first-half net income, which alleviated worries about a recent decline in interest rates. The bank indicated that the difference between the amounts it pays depositors and what it earns from lending is expected to remain stable this year, contrary to earlier projections that suggested a slight narrowing.