Intesa Sanpaolo in profit and with its accounts in order despite the acquisition of the two Venetian banks.
The bank led by Carlo Messina closed the first nine months of the year with a net profit of 5,888 billion euros, a figure that includes the public cash contribution of 3,5 billion euro to offset the impact on capital ratios deriving from the acquisition of Banca Popolare di Vicenza and Veneto Banca. Excluding public funds, the profit amounts to 2,469 billion euros (which becomes 3,108 billion excluding taxes and other charges relating to the banking system), a result which in any case represents an improvement from 2,335 billion in the same period of the year previous.
Taking into consideration only the third quarter, the bank's net result amounted to 650 million (+3,5% compared to the same period of 2016) against the 560 expected by the market. Without the accounting effects determined by the purchase of some assets of the former Veneto banks, it would have amounted to 731 million euro. Furthermore, in the months July-August-September revenues were in line with expectations, with the intermediation margin equal to 4,173 billion against the 4,178 forecast by analysts. Confirming expectations, the gross operating profit stood at 1,851 million. In this case, without the contribution of the new businesses, the result would have been higher, equal to 1,955 million.
"The third quarter of 2017 reflects the impact of the merger of the two former Veneto banks – explained the managing director – The structure of the income statement of the two banks still presents strong imbalances, even net of the elimination of non-performing loans from the balance sheets: costs are equal to double revenues and the gross current result on a quarterly basis is negative for 100 million”.
"We have made a great effort to quickly remedy this situation and bring the balance sheets back into profit - added Messina - by acting both on the revenue side, developing in particular asset management activities, and on the cost side, thanks to the agreement reached with the unions for the reduction of personnel and the rationalization of the branch network. We will anticipate the migration processes to next December. The customers of these banks - he concluded - can count on the quality of service and the solidity of one of the best banks in Europe, the same can be said for all the people who have joined our group".
Returning to the data relating to the 9 months ended 30 September, the result of operation management on the other hand, it fell by 2,4% to 6,298 billion, but it would have been up by 1,5% excluding the effects of the devaluation of the Egyptian currency and the dividends linked to the stake in the Bank of Italy.
I operating costs they remained stable at 6,336 billion euro, while operating income dropped by 1,2% to 12,634 billion and net interest settled at 5,369 billion (-3,2%).
Plus sign for net commissions, rose by 6,4% to 5,64 billion. Net value adjustments on loans decreased by almost 500 million, reaching 2,078 billion from 2,534 billion in September 2016.
Improve credit quality. In the first nine months of 2017, Intesa recorded a sharp decline in non-performing loans, down to 27,066 billion, a figure that represents a drop of 9,1% compared to September 2017. Loans to customers amounted to 364 billion euros (-0,3%), while the gross quarterly flow of loans impaired from performing loans in the third quarter amounted to 990 million, the lowest figure since the birth of Intesa Sanpaolo.
Speaking of deposits, direct banking deposits fell by 1,6% to 387 billion, while direct insurance and technical reserves increased by 4,8% to 150 billion and managed savings by 7,1% to 331 billion .
Asset-wise, the common equity ratio as at 30 September it was 13,4% pro-forma when fully operational, a percentage that clearly exceeded analysts' expectations.
Intesa has confirmed its commitment to distribution of 3,4 billion euros of cash dividends for 2017, as well as that of distributing a total of ten billion euros of cash dividends in the four-year period 2014-2017, following the line outlined in the Business Plan, "in consideration of the expected growth for the consolidated net profit for 2017 compared to 2016, also excluding the public cash contribution of 3,5 billion euro - to offset the impact on capital ratios deriving from the acquisition of the business units of Banca Popolare di Vicenza and Veneto Banca - and regardless of the 'inclusion of the results of the second half of 2017 of the branches acquired”, explains the institute.
“Intesa Sanpaolo is confirmed a successful wealth management company: more than 50% of gross current income is generated by this area of activity. For commissions, the first nine months of the year were the best since the creation of Intesa Sanpaolo. Net flows of assets under management in the nine months are close to 15 billion euro, a result that places us among the top groups in Europe. Assets under management, equal to 331 billion euro, have grown by 88 billion since the start of the Business Plan. At the end of September the financial assets that Intesa Sanpaolo manages on behalf of customers are close to one trillion euros: an impressive figure, a concrete sign of the trust that the Bank is able to generate. These are resources that we will continue to make available to our country's growth projects. We are one of the most efficient banks in Europe with a cost/income ratio of 50,2%. The management of the non-performing loan portfolio is producing significant results: the continuous reduction of the stock in the last two years amounted to 11 billion euros, bringing the value back to its lowest level since 2012. The flow of non-performing loans is at minimum values since 2007”, concludes Messina.
At Piazza Affari the title of the bank gains 0,9% to 2,868 euros. Finally, it should be noted that the Cariparo Foundation has recently fallen below 3% of Intesa and will have to further reduce its stake by April as envisaged by the Acri-Mef protocol: 'We could go down to 2% and something, just over 2%". the president of the Veneto institution, Antonio Finotti, underlines to Radiocor.
