Q3: the earnings momentum continues; FRB recovery accelerates

CASA pushed its earnings momentum further this quarter with all the divisions contributing to growth with the exception of asset gathering. Opex and the cost of risk were also lower than expected leading to results well above the group’s 2025 targets. Judging by the earnings trends for 2023 so far and by the recent and incoming acquisitions, we will likely upgrade our estimates going forward.

Q2: excellent performance thanks to asset gathering and specialized financial services

CASA’s excellent Q2 was driven by a strong performance from Asset Gathering and Specialized Financial Services with the consolidation of CA Autobank and the contribution from Leasys JV, and thanks to the elevated performance of CIB, all more than offsetting the poor performance of French Retail Banking (although better than feared). Aside from the top line, costs were better than expected while loan losses were worse than anticipated. The capital position remained healthy and the 2025 targets we

CIB, Asset Gathering and IRB apply full power to CASA’s earnings momentum

CASA realized a strong Q1 with the trends observed in the Q4 continuing in the Q1. CIB, Asset Gathering and International Retail Banking were again the main growth drivers while French Retail Banking and Specialized Financial Services continued to suffer from rising financing costs. On top of the revenue momentum, Opex and CoR provided good surprises pushing the bottom-line higher. The targets were upgraded with the long-term C/I ratio being lower than 58% (vs 60%) by 2025 thanks to the positive

Q4: a beat supported by higher rates and CIB

CASA realised a strong Q4 thanks to the good performance of its insurance business and its CIB. The bank benefited from higher rates in IRB but not in FRB where margins were still pressured by the increase in both the usury rate and regulated savings rate. Cost of risk was better than expected. All 2022 targets were achieved and 2025 targets were maintained.

Q3: growth saved by CIB, NII tailwind expected with some lag

CASA published modest results for Q3 with a revenue miss as the good performance of large customers was offset by NII pressure in France and Italy, and negative market impacts in asset gathering. The capital position also suffered from negative market effects but remained healthy overall. The long-term targets were maintained. The NII boost from higher rates could take a bit longer to play out for the French banks.

Q2: a growth engine named CIB

CASA realised a good Q2, helped by the strong performance of its CIB division more than offsetting the poor performance of its asset-gathering branches. The rest of the businesses saw growth too. Costs were the only disappointing element, although much of the inflation was due to scope changes or FX. Cost of risk was below levels seen in Q1 and below management’s target. The Russian exposure continued to decline. MTP 2025 targets were maintained.

Investor Day 2022: ambitious on the top line but conservative on capital

CASA unveiled its MTP 2025 targets during its Investor Day: the group now targets more than €6bn net income, as a result of a 3.5% revenue CAGR (upgraded) combined with a 50bp positive jaws effect (<60% C/I ratio, unchanged) and a normalised 40bp cost of risk. Such targets reflect an improved profitability (>12% RoTE) despite management keeping a conservative view on capitalisation (11% CET1 ratio, unchanged) and distribution (50% dividend payout, unchanged).

Mixed Q1 due to costs, provisioning on Russia and Ukraine

CASA realised a mixed Q1, with a beat on revenue driven by strength in retail banking, asset gathering and SFS, more than offset by a miss on costs which was due in large part to SRF and Creval and Lyxor integration, and by a miss on LLPs with half of them linked to Russia. The capital situation was still solid despite a decline related to higher exposure, regulatory impact and interest rate impact. A new medium-term plan 2025 will be published in June.

Waiting for the new targets...

CASA released its numbers for Q4 21. These were overall better than expected with higher than expected revenues together with a level of expenses under control. However, the biggest contributor was the CIB as revenues were mostly below or flat for the other operating divisions. This should not hide the solid 2021 numbers with the net profit level a year ahead of management’s guidance. A CMD will take place in June 2022. We will make minor adjustments to our forecasts.

Mostly in line with BNPP and SocGen's numbers

CASA published this morning its numbers for Q2 21. The numbers were above expectations in all divisions but the CIB. This follows the strong numbers already published by SocGen and BNP Paribas and were already integrated in investors’ expectations. With a weaker than expected numbers in the CIB division, the absence of any guidance and no surprise regarding capital distribution, the stock is under pressure/flat today. We will revise upwards our EPS expectations for FY2021 and FY2022.

Uninspiring numbers

CASA released this morning its numbers for Q1 21. In absolute terms, these are above expectations and are proving CASA’s ability to grow its top line and all of its operating divisions. These were yet largely integrated in the consensus as most European banks and CASA’s closest peers have already disclosed their earnings (CIB’s buoyant revenues not a surprise nor are Amundi’s higher revenues). We upgrade our EPS for 2021 due to lower loan losses and higher revenues in the CIB.

Better to be a minority in CASA than in Natixis...

CASA released this morning its numbers for FY2020. These were better than expected across-the-board. Operating profit was indeed 7% above expectations driven by a stronger than expected top line. CASA found a mechanism to reward shareholders as it will pay a €0.8 dividend, well above ECB’s recommendation through a payment of cash and scrip dividends (the 13.1% CET1 ratio, 520bp above capital requirments, allows for a high degree of flexibility). We will revise upwards our estimates for FY2021 a

LIBERUM: Plus500: Strategic progress pays dividends

Tatton Asset Management (TAM LN) - Record net inflows

Tatton, the leading on-platform discretionary fund manager (DFM) and IFA support services Group has released a trading update ahead of its results to 31 March 2024, due on 18 June 2024.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Ondo InsurTech FY24 Trading Update

Ondo InsurTech has released a brief post-YE update revealing its good progress continued through 2H24 and consequently FY24 will be in line with market expectations.

BlackRock World Mining

BRWM’s managers: we see all the classic signs of high commodity prices...

NextEnergy Solar Fund - Attractive Refinancing

The refinancing of a £135m revolving credit facility and the extension of a similar £70m facility gives NESF firepower as development opportunities for new solar are especially attractive thanks to lower module prices in Europe. They give the fund key financial flexibility at a critical time as it pursues its capital recycling programme.

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Initial Equity Trading Comments - 19 February 2024

M Winkworth+ (WINK, House Stock at 163p) - Solid FY23A results, well placed to grow

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AUM up 30% in FY24, record flows, forecasts raised

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Hybridan Research: Sector Review: Artificial intelligence in UK cybersecurity: the human uplift 17/04/2024

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Morning Note – 18 April 2024