The 2022-2026 Business Plan, approved by the Parent Company’s Board of Directors on 22 June 2022, aims to strengthen BMPS in its nature as a "simple commercial bank in the operation and interaction with customers". In particular, the Plan “aims to achieve an attractive and sustainable profitability with a solid balance sheet, an optimised operating structure and the best-in-class digital platform Widiba, leveraging its strong, historic commercial franchise, our talented human capital and ESG-driven culture across all of the Bank’s activities”.
The Group’s new strategy is centered around the following pillars:
- Achieve business model sustainability: optimisation of the organisational structure in order to improve the agility and efficiency of the Bank's operations and enable the revamp of our commercial proposition. The objective is to strengthen the role of BMPS as a reference point in the regions where it operates, through a product offering focused on households and corporates and digitalisation to improve commercial productivity, ensuring in this way a robust revenue generation;
- Build a solid and resilient balance sheet: significant strengthening of the Bank's capital position following the Euro 2.5bn rights issue completed in November 2022, coupled with the implementation of a sustainable funding strategy with the improvement of the risk profile thanks to new business lending priorities;
- Tackle the legacy issues: management of legacies through factual assessment of risks and approach based on factual elements and previous experience.
The Plan's strategic objectives include major actions including:
- Simplification of the Group structure through the merger into BMPS of selected subsidiaries (MPS Capital Services, MPS Leasing & Factoring, MPS Consorzio Operativo), to enable the streamlining of the Group and operating model.
- Optimization and redeployment of workforce, thanks to a voluntary exit scheme which leverages on the Solidarity Fund and a reduction of 150 branches within 2026. The agreement between the Parent Company and the Trade Unions has already led to the completion of a program of 4,125 voluntary departures starting December 1, 2022.
- Relaunch of the commercial platform and targeted development for specific high-potential business areas, thanks to several additional investments planned to support growth of multi-channel digital offer, through CRM and data analytics tools, Wealth Management and Consumer Finance area, and the industrialization of the performing and non-performing credit platform.
- Highly rigorous and disciplined G&A cost management based on the centralization of several cost owners under one single ad hoc unit.
- Strengthening of the digital strategy to support the relaunch of the commercial platform, with investments planned to develop Plan initiatives with reference to the IT and real estate sectors
- Leveraging of Widiba as “challenger bank/best in class”: the Plan calls for investments to reach a Bank’s business model more oriented towards financial advisory services for customers
- Strengthening its distinctive market positioning with respect to ESG aspects through, among others, initiatives to progressively reduce direct emissions (-60% vs 2017) and to enhance the Diversity&Inclusion program with the objective of 40% of women in positions of responsibility.
The objectives of the Plan take into account the review of the commitments between the Italian Republic and the European Commission relating to the Bank.
The Plan envisages initiatives to sustain the growth, with an effort for an immediate and tangible transformation that will lead to a sustainable profitability and patrimionial benefits:
- Cost/income ratio at 60% in 2024.
- Cost of risk <50 bps, consistent with the Bank's asset quality.
- Pre-tax profit of ca. €700 mln in 2024 and ca. €900 mln in 2026.
- ROTE at 8% in 2024 and at 8,7% in 2026.
- Reduction in NPE stock of €1,3 bn, to a total amount of €2,8 bn within 2026, of which disposals for roughly €0,9 bn already were agreed upon in August 2022.
- Net NPE ratio at 1,9% in 2024 and at 1,4% in 2026, with strengthened coverage (53% in 2024 and 59% in 2026).
- CET1 Fully loaded ratio of 14,2% by 2024 and 15,4% by 2026, in the assumption of dividend distribution from 2025 (pay-out ratio of 30% on 2025-2026 results).
For more information, please view the presentation and the press release of 23 June 2022.