Intesa posts surprise profit gain as bet on fees pays off

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Net income at Intesa Sanpaolo, Italy’s largest domestic bank by assets, rose 11.8 per cent in the first quarter to €901m as income from fees and commissions offset a fall in net interest income and contributions paid into a national bank resolution fund.

The bank said excluding contributions paid into the resolution fund and writedown on its €1bn investment in bank bail out fund Atlante net income would have been €1.183bn.

Despite the charges, Intesa Sanpaolo said its net income remained above the quarterly quote of €3.4bn cash dividend commitment for 2017. Intesa Sanpaolo’s hefty 17.8 cents per ordinary share dividend policy has become its key calling card with investors.

The bank added it would book an €800m net capital gain from the sale of AllFunds in the second of 2017.

Fully loaded common equity ratio was 12.9 per cent.

The bank, which is a bellwether for the Italian economy, said “gross NPL inflow from performing loans was at its lowest since the creation of Intesa Sanpaolo [a decade ago].”

Lending to Italian households and businesses rose 22 per cent compared with the first quarter of 2016 to €12.5bn. It said it had reduced its stock of about €60bn of gross deteriorated loans by €7.5bn gross in the past 18 months.

“We confirm the remuneration of shareholders in a significant and sustainable manner as a strategic priority, thanks to a €10 billion cash dividend commitment for the current four-year Plan,” chief executive Carlo Messina said.

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