Italy's Intesa Sanpaolo reports flat earns

AP News
Posted: Nov 10, 2009 9:19 AM

Intesa Sanpaolo SpA, Italy's second-largest bank, announced Tuesday it would resume dividend payments after reporting flat third-quarter earnings.

The Milan-based bank said net income was euro674 million ($1 billion) in the three months ended Sept. 30, the same as in the same period a year earlier.

The bank said the government's cancellation of overdraft fees drove a 14 percent decrease in net interest income to euro2.6 million from euro3 million in the same period of 2008. The elimination of the overdraft fee alone cost euro90 million, the bank said.

Net fees and commissions dropped 2.7 percent to 1.36 billion euros in the quarter, while loan-loss provisions declined 3.6 percent to 823 million euros.

Shares in the bank rose 1.55 percent to euro2.94 on the Milan stock exchange following the earnings announcement.

Intesa confirmed it would resume paying a dividend for 2009, after canceling its dividend payments last year as part of efforts to restore its capital base.

The bank said its Core Tier 1 ratio _ a key measure of a bank's health _ at the end of the third quarter was 7.2 percent, up from 6.3 percent at the end of 2008. The bank ultimately rejected the Italian government's program to sell bonds to shore up its capital ratio, saying the measure was no longer necessary due to improving financial conditions.

Intesa Sanpaolo is selling off assets to boost its capitalization, a process it said it hopes to complete in April.

The bank said it expects consolidated net income for 2009 to exceed that of 2008 due to the results in the first nine months and the contribution of euro260 million from the sale of Findeomestic, expected to be completed in the fourth quarter.