Bper Banca rating upgraded for capital strength and credit quality.
At the beginning of September, Fitch Ratings improved the ratings assigned to Bper Banca. In particular, the long-term deposit rating was upgraded from “BB+” to Investment Grade “BBB-” and the long-term issuer rating was upgraded from “BB” to “BB+”, with the outlook confirmed as “Stable”. As stated in the note, the action reflects on the one hand, the bank’s solid capital position, combined with a material improvement in asset quality driven by a significant decrease in the incidence of non-performing loans. On the other, it reflects the benefits in terms of competitive position, volumes and profitability prospects arising from the acquisition of the business unit from Intesa Sanpaolo.
The statements made by Fitch Ratings support our view related to this stock. Our financial statements analysis shows a company that is growing and improving over the years. Recent published data confirm this. Bper Banca closed the first half of 2021 with a net profit of approximately € 502 million, a significantly higher profitability compared to the results recorded in the same period in previous years (€ 102 million in the first half of 2020 and € 101 million in the first half of 2019). In addition to this figure, there are other factors such as the clear improvement in terms of exposure to non-performing loans. The NPE Ratio dropped to 2.82% compared to 4.02% and 5.77% recorded in 2020 and 2019 respectively. The CET1 Ratio is around 13.52%, well above the ECB’s minimum requirement of 8.125% and the liquidity position is also excellent, with a liquidity coverage ratio of 200.1%, twice the regulatory threshold of 100%.
Together with the financial statement numbers, the completion of the purchase program of 620 branches from UBI and Intesa Sanpaolo, which will allow a significant dimensional and competitive leap for Bper Banca.
The data are therefore positive and show an improvement in terms of profitability and solidity. However, this does not seem to be read by the financial markets. To date, the stock has lagged, well below the pre Covid-19 price levels, despite the economic recovery and the improvement of the company’s data and future growth prospects. In our opinion Bper Banca is a stock currently undervalued that we continue to consider interesting in the medium-long term.