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Intesa’s earnings confirmed the encouraging picture for the sector painted by rivals such as France’s BNP Paribas (OTC:BNPQY), Spain’s or Britain’s Lloyds (LON:LLOY) – whose results were also boosted by either shrinking provisions or the release of cash set aside against COVID-driven loan losses.
Net profit at Intesa came in at 983 million euros ($1.1 billion) in the July-September period, well above an analyst consensus of 850 million euros compiled by Reuters.
It now expects a 2021 profit of above 4 billion euros. The figure was Intesa’s previous full-year target which it reached in the first nine months.
Revenues totalled 5.09 billion euros, above the expected 4.93 billion euros, thanks mostly to a strong trading performance.
Income from the lending business was little changed quarter-on-quarter, while falling 6.1% from a year ago due to negative interest rates, compounded by intense competition and slowing credit growth in Italy.
Net fees, on the other hand, rose 8.3% year-on-year thanks to robust commercial banking and asset management activity in the post-lockdown months, while easing 1.9% from the second quarter.
Provisions against loan losses fell a larger-than-expected 44% from July-September 2020, when the bank put aside nearly 1 billion euros to prepare for future damage on its loan book from COVID-19.
Shares were little changed after the results and were down 0.3% by 1255 GMT, compared with a flat Italy banking index.
($1 = 0.8632 euros)
