Intesa Sanpaolo revises 2023 outlook following net income surge in Q3

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Intesa Sanpaolo revises 2023 outlook following net income surge in Q3
Credit: © Reuters.

Intesa Sanpaolo (OTC: ISNPY ), the Italian banking institution, has revised its 2023 outlook upwards following a surge in Q3 earnings. The bank now anticipates a net income exceeding EUR7.5 billion ($7.97 billion) for 2023, up from the initial estimate of over EUR7 billion. This optimistic outlook is based on an expected net interest income of over EUR14 billion, a significant increase underpinned by a 60% year-on-year rise in net interest income in Q3.

In the first three quarters of 2023, Intesa Sanpaolo's net interest income rose by 66% to EUR10.6 billion. Despite a slight dip in Q3 net income to EUR1.9 billion from EUR2.27 billion in Q2, the bank's operating income grew by 27% to EUR6.37 billion, outperforming FactSet analysts' predictions who had expected a quarterly revenue of EUR6.25 billion and a net profit of EUR1.77 billion.

The bank's board approved a consolidated interim report that showed a net profit increase to EUR6.1 billion from EUR3.3 billion last year. This increase was primarily driven by net interest alongside an interim cash dividend of EUR2.6 billion, equating to EUR0.1440 per share from 2023 results.

However, the bank reported a decrease in net fees and commissions by 3.7% to EUR6.44 billion during the same period. On the other hand, gross current income and operating income saw increases of 67% and 37% respectively, with net operating income also witnessing an uptick.

The report also highlighted that the stock of impaired loans decreased by 5.3% net of adjustments and 1.4% gross, with the ratio of impaired loans to total loans at 1.2% net and 2.4% gross as per EBA methodology. After deducting about EUR4.3 billion in dividends accrued in the first nine months, the bank's fully loaded Common Equity Tier 1 ratio stood at a healthy 13.6 percent, leading to the bank's stock trading 2.3 percent higher.

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