ISP Intesa Sanpaolo Spa

(Adds earnings details, comment from CEO and 2018 outlook.)

 
   By Pietro Lombardi 
 

Intesa Sanpaolo SpA (ISP.MI) said Tuesday that its first-quarter net profit rose 39% to deliver a result that Chief Executive Carlo Messina deemed the bank's "best since 2008."

The Italian bank posted net profit of 1.25 billion euros ($1.49 billion) compared with EUR901 million in the same period last year. The increase was helped by growing fees and commissions, higher profits on financial assets and liabilities designated at fair value, as well as lower provisions for bad loans.

Analysts had expected net profit of EUR890 million for the period, according to a consensus forecast provided by FactSet.

Profits on financial assets and liabilities at fair value rose significantly to EUR621 million from EUR226 million, with a positive contribution of EUR264 million stemming from the fair value measurement of its investment in Italian railway group NTV.

Loan-loss provisions fell 31% to EUR483 million.

Fees and commissions rose 8.2% to EUR2.01 billion, underscoring Intesa's push to make more revenue from fees and commissions than from traditional lending activities as the latter suffer in the current low-rate environment.

"The quality and strength of our results are based on double-digit revenue growth, with net interest income rising for the second consecutive quarter, and growth in commissions that places us at the top among European banks," Mr. Messina said.

The bank expects net profit will grow in 2018 from 2017, excluding from last year's results the EUR3.5 billion public contribution Intesa received as part of the rescue of two regional Italian banks that went bust.

The Italian government liquidated the regional banks' bad assets, while Intesa bought the good ones for 1 euro. The deal included the EUR3.5 billion public contribution to offset the transaction's impact on Intesa's capital ratios.

"An increase in revenues, continuous cost management and a decrease in the cost of risk are envisaged as the drivers of the expected performance of net income," it said.

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

(END) Dow Jones Newswires

May 08, 2018 10:07 ET (14:07 GMT)

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