Banca Etica’s 2024 Financial Results: A Deep Dive into Ethical Growth
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Analysis of Banca Etica’s 2024 performance reveals a story of robust growth, unwavering commitment to the social economy, and increasing trust from its members and customers. Archynetys.com explores the key figures and strategic initiatives driving this success.
Financial Strength and Expansion
banca Etica demonstrated notable financial resilience and growth throughout 2024. The bank’s net assets reached €196.4 million, marking a considerable 9.5% increase compared to December 2023. This growth was fueled by new and existing shareholders investing further capital, as well as the bank’s operational profits, which were largely reinvested, with a portion allocated to Finanza Etica.
Key indicators of the bank’s financial health are at record highs:
- CET1 Ratio: 21.0% (up from 19.9% in 2023)
- total Capital Ratio: 25.3% (up from 24.2% in 2023)
These figures underscore Banca Etica’s strong capital base and its ability to absorb potential losses, ensuring stability for its stakeholders.
Banca Etica’s commitment to the social economy is evident in its lending practices. Gross loans reached €1.27 billion by the end of 2024,representing a 4.4% increase year-over-year. This is especially noteworthy considering the broader banking system experienced a contraction of 1.6% during the same period, according to ABI Monthly Outlook data.
the bank’s long-term performance further highlights its dedication to ethical lending. Between 2020 and 2024, Banca Etica’s lending portfolio grew by 15.7%, while the overall banking system saw a decrease of 3.8%. Approximately 40% of Banca Etica’s lending is consistently directed towards organizations and businesses within the third sector, demonstrating its focus on supporting social enterprises.
This positive trend has continued into the first quarter of 2025, with credit utilization already increasing by €24 million (1.9%) compared to the end of 2024. Banca Etica’s strategic plan aims to further strengthen its lending commitment with a growth target of 35% over the next four years.
Increased Trust and Savings
Customers are increasingly entrusting their savings to Banca Etica. Total customer deposits reached €2.609 billion at the end of 2024, a 4.6% increase compared to the previous year. This growth rate is double that of the broader banking system, which saw an increase of 2.4% during the same period (ABI monthly outlook).
Over the past five years (2020-2024), Banca Etica’s direct deposit growth has outpaced the banking system by a factor of four: +29% for Banca Etica compared to +6.7% for the system as a whole. This indicates a growing preference for ethical banking options among savers.
Banca Etica’s community continues to grow, with 790 new members joining in 2024. The bank’s share capital also increased to €95.4 million, a 3.5% rise compared to December 2023. This demonstrates the increasing confidence and investment in banca Etica’s mission and values.
ethical Investment Funds Remain Stable
Indirect investments in Etica Sgr funds experienced a 5.6% increase compared to the previous year, primarily driven by market performance.Over the past five years, overall growth has reached 27.5%, indicating a sustained interest in ethical investment options.
Managing Non-Performing Loans
Banca Etica maintains a responsible approach to managing non-performing loans (NPLs). Net NPLs at the end of 2024 amounted to €6.4 million,representing 0.52% of customer loans. Gross NPLs totaled €72.6 million, resulting in an NPL ratio of 5.6%. While this is higher than the system average, it is partly due to Banca Etica’s policy of minimizing the sale of distressed loans to preserve relationships with customers, even during challenging times.
Banca Etica limits the transfer of deteriorated credits to a minimum to preserve the relationship with customers to the maximum even in the challenging phases.
Increased Use of Ethical Financial Services
The increasing adoption of Banca Etica’s services is reflected in the growth of net commissions, which increased by approximately €500,000 (+2.5%) in 2024. This growth occurred despite the bank refraining from introducing new fees or increasing existing ones, and even providing discounts to organizations facing financial difficulties due to rising interest rates. The increase in commissions was primarily driven by Etica Sgr funds (+7.8%) and ethical insurance products (+63%).
supporting Those in Need
Banca Etica remains committed to its mission of supporting vulnerable populations. The bank continued to provide assistance to borrowers with variable-rate mortgages (benefiting approximately 800 families) and reduced commissions for organizations in difficulty by around €900,000.
