BPER Banca shares surge as Italian lender outlines bumper payouts in 2027 strategy

Investing.com -- Milan-listed shares in BPER Banca (BIT:EMII ) touched a nine-year high on Thursday after the Italian bank outlined plans to deliver bumper investor payouts as part of its business strategy until 2027.

In a presentation, the lender said it would bring "significant remuneration" to its shareholders, including a dividend payout ratio of 75% of income from 2025 to 2027.

BPER Banca added that it expects total revenues to expand to greater than 5.6 billion euros by 2028, up from a projected mark of approximately 5.4 billion euros this year.

The 2027 top-line target of about 5.5 billion euros would translate to compound annual growth at an expected pace of 1.5%, the bank added.

Net commissions on total revenue are seen growing as well by 4 percentage points to around 42% in 2027. They are then anticipated to edge up to approximately 43% in 2028.

Operating costs are also seen decreasing to around 2.4 billion euros by 2027, which would indicate a 7% drop from its current-year projections. Net income is subsequently tipped to climb by 15% to roughly 1.5 billion euros.

Analysts at Jefferies quoted by Reuters said BPER Banca's approach both moves away from "overly conservative assumptions" and reveals "true potential." The broker said that the projected payouts and the company's return on tangible equity goal of above 16% in 2027 are above expectations, Reuters added.

In August, BPER Banca boosted its interest margin guidance for 2024 thanks to an uptick in first-half net income that offset concerns over a recent dip in interest rates.

The group noted that the difference between what it pays depositors and makes from lending will be stable this year compared to an earlier outlook that it would be "slightly" narrow.

(Reuters contributed reporting.)

Source: Investing.com