MILAN (Reuters) - Italy’s biggest retail bank, Intesa Sanpaolo (ISP.MI) beat forecasts with a second-quarter net profit of 217 million euros (217.07 million pounds) as its strategic shift towards asset management paid off.
Intesa’s net profit in the three months from April to June compared with 116 million euros a year ago and a Thomson Reuters consensus forecast of 109 million euros.
The bank said its operating result and pre-tax profit for the period was the best in the last nine quarters, with higher revenues from asset management offsetting the impact of one-off charges such as writedowns.
Commissions in the first half of the year were up 9 percent from a year earlier and were the highest since 2007.
Results were affected by a number of one-off items. On the negative side, Intesa had to pay around 500 million euros additional taxes on the revaluation of its 40 percent stake in the Bank of Italy.
It also took a 65 million euros charge in the second quarter because of new legislation in Hungary requiring banks to compensate borrowers for exchange rate spreads applied on foreign currency loans - the latest setback for the country’s mostly foreign-owned lenders.
The group’s provisions for loan losses also remained high at 1.18 billion euros, as its home market Italy struggles to emerge from its longest recession since World War II.
Like other European lenders, Intesa is shedding non-core assets to boost its capital base, which is already one of the strongest in Italy, in preparation for a Europe-wide health check of lenders to be completed later this year.
The Common Equity Tier 1 ratio, a measure of financial strength, stood at 12.9 percent, from 12.6 percent at the end of March.
($1 = 0.7465 Euros)
Reporting by Silvia Aloisi; Editining by Lisa Jucca