By Pietro Lombardi 
 

Intesa Sanpaolo SpA's first-quarter net profit rose 9.6%, boosted by growing revenue and lower costs.

Net profit for the period was 1.15 billion euros ($1.26 billion) on revenue of EUR4.88 billion, the Italian bank said Tuesday. In the same period last year, it reported profits of EUR1.05 billion and revenue of EUR4.37 billion.

Analysts had forecast a quarterly profit of EUR811 million on revenue of EUR4.19 billion, according to a consensus forecast provided by FactSet.

The bank set aside around EUR300 million in provisions related to the coronavirus pandemic. These provisions, along with the capital gain related to a transaction with Nexi SpA, "would make it possible to absorb a total of around EUR1.5 billion pretax adjustments to loans for the full year," the bank said.

A number of European banks have increased provisioning so far this year. Italy's largest bank UniCredit SpA said it would book almost $1 billion in additional provisions for bad loans in the first quarter. Swiss bank Credit Suisse Group AG and Germany's Deutsche Bank AG set aside more than half a billion dollars each to cover potential loan losses.

Intesa's revenue rose almost 12% to EUR4.88 billion.

Looking ahead, the bank expects a net profit of at least EUR3 billion in 2020 and EUR3.5 billion in 2021. It also confirmed its dividend policy.

Given the impact of the coronavirus pandemic, the strategic value of its takeover bid for smaller rival Unione di Banche Italiane SpA is even stronger, Intesa said.

 

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

 

(END) Dow Jones Newswires

May 05, 2020 07:11 ET (11:11 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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