Intesa Sanpaolo lifts divi despite disappointing Q4

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Profit after tax at Banca Intesa Sanpaolo missed expectations by quite a wide margin in the fourth quarter, as the bank contributed to a fund created to rescue four of the country’s smaller lenders. But Italy’s leading domestic lender has bumped up its dividend payments and highlighted the improving quality of its assets.

Net income dropped to €13m in the quarter, way below the €78m expected by analysts polled by Bloomberg and down from €48m during the same quarter a year earlier, writes Nathalie Thomas.

Excluding one-off payments to Italy’s “bank resolution fund” – set up to raise €3.6bn to rescue smaller lenders including Banca Marche, CariFerrari, CariChieti and Banca Etruria – net income for the fourth quarter would have been a much healthier €263m, Milan-based Intesa Sanpaolo said on Friday.

Full-year net income improved to €2.8bn versus €1.3bn in 2014. Excluding resolution fund payments, net income was just shy of €3bn from €1.7bn in 2014.

The bank trumpeted that earnings excluding exceptional items of €3bn were the highest since 2007, as it proposed a 2015 dividend of 14 euro cents a share, up from 7 euro cents a year ago.

The lender said last year’s performance had exceeded its targets as it also pointed to the improving quality of loans. Provisions on bad loans fell 27.6 per cent year on year to €3.3bn, their lowest level since 2010.

As the FT’s James Politi reported last month, Italy has struck a deal with the EU on a guarantee scheme to help Italian banks sell their large portfolios of non-performing loans to private investors.

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