Skip to main content

Trend & Outlook


The year 2023 was characterized by a macroeconomic scenario that was still uncertain also due to the recent tensions related to the conflict in the Middle East; however, in this context the Group recorded record levels of profitability, with a pre-tax profit from continuing operations of € 2,041.0 million and a net profit of € 1,264.4 million.

At its meeting on 11 December, the Board of Directors of Banco BPM approved the Group’s Strategic Plan 2023-26.

The new Strategic Plan reflects the outcome of a path of growth and innovation that Banco BPM has undertaken in recent years and that has strengthened its profitability, consolidated its capital position, improved its overall risk profile, transformed its commercial operations through a wider adoption of digital channels, enhanced its business model, and finalized a growing integration of sustainability.  As extensively explained in the press release of December 12, to which reference is made for more details, the achievement of the plan targets will allow for a significant increase in shareholder remuneration, leveraging financial and industrial levers that will further boost overall profitability growth while keeping the solid capital position unchanged.

During the year, the Group continued with the process of integrating the insurance business started in 2022 with the acquisition of control of the companies Banco BPM Vita and Banco BPM Assicurazioni, and with the finalization of an agreement with Crédit Agricole Assurances to launch a commercial partnership in the Non-Life/Protection sector.

In particular, on 14 December, the Banco BPM Group completed the internalization of the Life business through the acquisition from Generali Italia of 65% of the share capital of Vera Vita S.p.A. and Vera Financial Dac[1]; on the same date, Banco BPM also acquired from Generali Italia 65% of the share capital of Vera Assicurazioni S.p.A., which was simultaneously sold to Crédit Agricole Assurances together with the 65% stake previously held in Banco BPM Assicurazioni.

The acquisition from Generali Italia follows the exercise, on 29 May, of the option provided for in the agreements signed in 2021 with Cattolica Assicurazioni for the purchase of the shares representing 65% of the share capital of Vera Vita and Vera Assicurazioni, insurance companies in which Banco BPM already owned a 35% stake.

That said, taking into account further intercompany transfer transactions finalized on 15 December 2023, Banco BPM, through its subsidiary Banco BPM Vita, holds 100% of the capital of Vera Vita[2] and, as part of the partnership with Crédit Agricole Assurances, 35% of Vera Assicurazioni[3] and Banco BPM Assicurazioni, respectively.

It should also be recalled that, in March 2023, the Banco BPM Group obtained recognition by the European Central Bank of its status as a financial conglomerate pursuant to Directive 2002/87/EC, which was the pre-condition for being able to access the benefits of the prudential treatment of equity investment deriving from the application of the so-called “Danish Compromise,” the authorization for which was received last November 3rd, effective from the supervisory reports referring to 31 December 2023.

It should also be noted that, following the resolution passed on April 18 regarding the project to enhance the value of the e-money business, on 14 July Banco BPM, Gruppo BCC Iccrea and FSI signed a binding agreement for the establishment of a strategic partnership aimed at the development of a new Italian and independent reality in the digital payments sector. The agreement provides for the contribution of Banco BPM’s e-money activities to the BCC Pay S.p.A. joint venture with recognition of a mixed consideration in cash and in shares issued by the Pay Holding vehicle, which in turn controls the entire capital of BCC Pay S.p.A. Upon completion of the transaction, Pay Holding will represent the second player in Italy in the payments business and will be owned about 43% by FSI and about 28.6% each by Banco BPM and Iccrea Banca. The Agreement also provides for the signing of a multi-year distribution contract for the Company’s services on Banco BPM’s network as well.

The overall valuation of the Banco BPM branch has been determined at € 500 million at closing, which may grow to € 600 million with a significant benefit on capital ratios.

Completion of the transaction, which has received approval from the European Central Bank, is expected by 2024.

As far as derisking activities are concerned, the targets set by the Strategic Plan approved at the end of 2023 establish a further increase in the targets for the disposal of impaired loans, envisaging total disposals of about € 700 million over the Plan horizon, net of the transactions already carried out during the year, with a clear future benefit on the stock of gross impaired loans and on credit quality indicators. The estimate of the resulting higher loan impairments has already been charged to the income statement for fiscal year 2023.

On the front of funding and capital operations, the Group concluded several issues during 2023: in January €750 million of Green Senior Preferred with a four-year maturity, in June €750 million of five-year Green Senior Non-Preferred with the possibility of early repayment in June 2027, and in November €500 million of Social Senior Preferred securities with a four-year maturity. These transactions were complemented in January 2024 by an additional issue of Green Senior Preferred securities with a maturity of six years in the amount of € 750 million: this is the Group’s eighth ESG issue placed so far, with total funding of around € 5 billion.

The described transactions, reserved for institutional investors, are part of the Euro Medium-Term Notes Program and are aimed at financing and/or refinancing Eligible Green Loans and Eligible Social Loans, as defined in the Bank’s Green, Social and Sustainability Bonds Framework.

In this regard, it should be noted that on 7 November, Banco BPM published the new Green, Social & Sustainability Bonds Framework, following the previous inaugural Framework published in July 2021. The Framework was updated according to the latest market standards, including the EU Green Taxonomy[4].

The objective of the update, consistent with Banco BPM’s commitment and strategy to address climate change and deliver a positive social outcome in its business conduct, was to align with market best practices, cover a broader range of assets[5], and include an alignment with the European taxonomy for certain eligible assets[6].

Banco BPM also concluded during 2023 two European Covered Bond (Premium) issues under its Guaranteed Bank Bonds program: the first in June for an amount of € 750 million and maturity of 5 years and the second in September for an amount of € 750 million and maturity of 3 years. In addition to the described operations, in January 2024 a new Covered Bond (Premium) issue was placed for institutional investors in the amount of € 750 million and maturity 6 years under the € 10 billion Covered Bonds program (BPM Covered Bond 2).

Finally, with the aim of optimizing the equity structure, in November Banco BPM issued a perpetual Additional Tier 1 instrument in the amount of € 300 million, reserved for institutional investors. The securities, issued at par, can be called by the issuer starting from the fifth year after issue; the semiannual coupon, fixed and not cumulative, was set at 9.5% and its payment is totally discretionary and subject to certain limitations.

In addition, it should be noted that in conjunction with the November AT1 issue, the Bank made a public repurchase offer related to the Additional Tier 1 security XS1984319316 for a maximum nominal amount of €300 million. At the end of the offer period, Banco BPM fully accepted the offers received, repurchasing € 223.3 million of the security (approximately 74.45%).

During the year, Banco BPM also concluded a program for the purchase of 2,418,855 treasury shares (equal to 0.16% of the outstanding ordinary shares) for a countervalue of € 10 million to service short- and long-term incentive plans to employees. Following the conclusion of this program, taking into account the allocations that took place during the year and the other treasury shares already in the portfolio, as of 31 December 2023 Banco BPM directly held 6,958,684 shares, equal to 0.46% of the share capital.

On 28 July, the results of the EU-wide stress test conducted by the EBA were released. Banco BPM performed better than in previous years, despite a more severe macroeconomic scenario, confirming its ability to generate value in the base scenario and to withstand significant shocks in the adverse scenario.

In addition, on 8 December 2023, the European Central Bank (ECB) notified Banco BPM of the prudential decision (SREP decision) containing the outcomes of the annual prudential review and assessment process. As a result of this decision, the minimum requirements Banco BPM is required to meet for the 2024 financial year are as follows:

  • CET 1 ratio: 9.07%;
  • Tier 1 ratio: 11.00%;
  • Total Capital ratio: 13.56%[7].


Finally, it should be noted that Banco BPM far exceeds the regulatory Minimum Requirement for own funds and Eligible Liabilities (MREL)[8], with a buffer of 888 bps on the 2023 regulatory requirement (691 bps on the 2024 regulatory requirement).

As far as the ratings assigned to Banco BPM are concerned, it is noted that on 21 November  2023, the rating agency Moody’s Investors Service upgraded the following BBPM ratings, placing them in the investment grade area:

  • Baseline Credit Assessment (BCA): baa3 (from ba2, +2 notch);
  • Long-term senior unsecured debt rating: baa2 (from ba1, +2 notch);
  • Long-term deposit rating: baa1 (from baa2, +1 notch).


Finally, it should be noted that on 7 November 2023, the rating agency S&P Global Ratings assigned Banco BPM a Long-term Issuer Credit Rating at the BBB- level, with a positive Outlook, and a Short-term Issuer Credit rating at the A-3 level. The new investment grade ratings by S&P Global Ratings, together with the upgrade into the investment grade category of the ratings assigned by Moody’s, add to those already placed in investment grade of Fitch Ratings and DBRS Morningstar, confirming the progressive improvement of the Group’s financial profile, especially in terms of credit quality, capitalization and profitability, as well as the recognition of the Group’s strong business position and solid funding and liquidity position.


Last update: 8 February 2024


[1] which simultaneously changed its company name to BBPM Life Dac.

[2] Vera Vita in turn holds 100% of the share capital of BBPM Life Dac.

[3] Vera Assicurazioni in turn holds 100% of Vera Protezione S.p.A.

[4] The standards taken into consideration are as follows: ICMA’s Green Bond Principles (June 2021 with June 2022 appendix), ICMA’s Social Bond Principles (June 2023), ICMA’s Sustainability Bond Guidelines (June 2021), and EU’s Green Taxonomy.

[5] New categories of eligible loans were added, such as Green Guarantee Loans, Manufacture of Organic Commodity Chemicals, and Sustainable Agriculture Loans among the green categories and Sustainability-Related Loans and Residential Mortgages among the social activities.

[6] The alignment of the European taxonomy covers real estate activities, renewable energy, and the manufacture of basic organic chemicals

[7] For more details on how the ratios are calculated and the minimum capital requirements, see Section 6 of the Explanatory Notes to this release.

[8] Calculated on Risk Weighted Assets at the end of December 2023 and inclusive of Combined Buffer Requirement.


After the positive start in January, witnessed by the resilience of employment and encouraged by still moderately expansionary fiscal measures, the Italian economy could register also in 2024 a dynamic comparable to the 0.7% growth reported in 2023, although negative effects resulting, in particular, from the uncertain geopolitical framework especially in Ukraine and in the Middle East cannot be ruled out. The path of the return of inflation to the ECB’s medium-to-long-term target of 2% may continue if the weakness in energy commodity prices persists, offsetting potential upward pressures on the wage front. Against this backdrop, it can be expected that the expansionary cycle of monetary policy could start from the second half of the year.

Competitive pressure on direct customer funds created by high yields on government issues will tend to ease as the expected steepening of the curve manifests itself; on this front, however, the contribution of forms of term deposits will remain important, which will make it possible to contain outflows on the segments most attracted by higher yields. At the overall level, net interest income is still expected to show a positive trend benefiting from a higher average level of rates over the 12 months as a whole than in the previous year.

Fees, after the volatility of 2023, will resume a growth path supported by investment products, thanks to the expected positive trend in placements, as well as the recovery in lending after a year of weak demand from households and businesses. A decisive boost will also come from product factories, which will make it possible to sustain the contribution coming from the monetics and non-life business and to benefit from the full potential of life revenues following the integration of Vera Vita finalized in December 2023.

The trend in operating expenses will be affected by the pressures of inflation and the recent renewal of the national contract, an effect, the latter, that will be gradually reabsorbed thanks to the hypothesized implementation of the redundancy plan as of the second half of the year; on the expenses front, management will benefit from specific rationalization programs, also by leveraging progressive technological support within production and back-office processes. With regards to provisions, substantial stability is expected as a result of the offsetting effect between the aggravations resulting from hypothesized increases in the default rate – although in turn mitigated by the inversion of the monetary cycle – and the disappearance of adjustments aimed at supporting the further program of reducing nonperforming assets. The Group’s lending policies will still remain prudent, with careful selection of industrial sectors and customers; similarly, coverage levels will remain stable at precautionary levels, confirming the rigorous assessments adopted in recent years on both performing and non-performing exposures.

For the full year, the upward trend in the Group’s net income is confirmed, with an EPS 2024 of around €0.90 net of non-recurring components (>€1.1 considering one-off components that can be assumed at present), in line with the profitability trajectories outlined in the Strategic Plan presented last 12 December. In light of the trends described above and the ability to generate stable increases in profitability and organic capital creation, all the profitability and shareholder remuneration targets announced in the last Plan are confirmed.


Last update: 8 February 2024