Intesa surprises with profits of 1.5 billion and a premium coupon that achieves 7.3%

Intesa Sanpaolo accelerated in Piazza Affari, rising 0.92% to 2.25 euros per share after the accounts were published. The bank led by CEO Carlo Messina posted a profit of 1.507 billion euros in the second quarter, an average increase of 66% over Equita Sim’s forecast of 901 million and Banca Acros for 878 million euros. Pre-tax net profit was 1.415 billion and included 1.2 billion in pre-tax earnings from capital gains on Nixie. This time, the adjustments to loans had a positive effect, it was 1.398 billion a year ago, and 599 million last June. In the first half of the year, net profit reached more than 3 billion euros, in line with the bank’s guidance for 2021 with a value of at least 4 billion euros.

Intesa also beat expectations for revenue to 5.180 billion versus Equita’s forecast of 4.895 billion, 4.136 billion in 2020, and operating costs of 2.665 billion (prev. 2.247 billion). Regarding the dividend policy, in addition to the 694 million cash for 2020 distributed in May, in line with the 2018-2021 business plan, the Group expects, in the 2020 results, a distribution of reserves, in addition to dividends. distributed, results in a payout ratio equal to 75% of €3.505 billion of adjusted net profit. Based on the results of 2021, the payment corresponding to a payout percentage equal to 70% of net profit, is distributed in part as an advance payment in the current year.

The ratio of tier 1 common equity calculated through the application of the transitional standards in effect for 2021 was 14.9%, tier 1 common equity ratio at fully operational was 14.4% and the initial ratio of tier 1 common equity at fully operational was 15.7% (the same level as in March).

The Board of Directors will soon hold the regular meeting of shareholders in the first half of October, to present the proposed distribution of the extraordinary reserve, based on the results of 2020, in the amount of 1.93 billion euros, resulting from the unit amount 9.96. Euro cents, to be distributed on the first useful date after September 30, the deadline for the European Central Bank’s recommendation on dividend policies, or October 20.

Today the Board of Directors has preliminarily set €1.4 billion as an advance to be distributed based on the 2021 results, which will be resolved on 3 November with the approval of the consolidated results from 30 September. 7.21 euro cents per share is paid on November 24 (with the coupon split on November 22 and a record date on November 23). The sum of the two coupons, 17.17 cents, corresponds to the current values ​​of the security with a return of 7.36%.

Returning to the accounts, Intesa expects synergies of more than 1 billion from the Ubi Banca merger, which the group has earmarked to boost its capital. The annualized cost of risk decreased to 43 basis points in June, with net loan settlements “still precautionary in the December 2020 macroeconomic scenario, and therefore not taking into account the improvement in the first half of 2021 scenario,” compared to by 48 basis points for 2020.

Non-performing loans in the quarter, before value adjustments, were reduced by about 46 billion from the September 2015 peak and 33 billion from December 2017, exceeding the upfront, 7 billion, the reduction target of 26 billion envisaged. The full four-year period of the 2018-2021 business plan. (All rights reserved)