The newly merged Intesa Sanpaolo reported soaring first-quarter profits due to capital gains of about 3 billion euros ($4 billion) from the sale of its CariParma and FriulAdria units to French bank Credit Agricole.
Italy's largest retail bank said net profit increased to 4 billion euros ($5.42 billion) from 1.3 billion euros in the same period a year earlier, using figures adjusted to reflect the merger between Banca Intesa and Sanpaolo IMI that took effect Jan. 1. The result was slightly below analyst forecasts.
Intesa Sanpaolo said its adjusted net profit, excluding the special items, rose 13% to 1.31 billion euros ($1.77 billion) from 1.16 billion euros a year earlier.
"I want to congratulate my colleagues. We are ahead of schedule both in terms of implementation of the merger plan but also in terms of results. We have gone through the most difficult phase of the merger,' CEO Corrado Passera told an analyst conference call.
Operations carried out so far include completion of the new structure of the group, new product launches and new agreements with unions, Passera said.
Passera said the merged bank had not realized any benefit from synergies and expected the first synergies in the last quarter of this year and the first significant benefits in the first quarter of 2008.
The bank took on 73,000 new customers in Italy during the period, a trend Passer said he hoped to continue.
"The change rate in the Italian banking industry has become a high one, very competitive. More than 2 million customers change their bank every year and we intend to intercept a number of them," Passera said.
First Results Reported Since Merger
Intesa Sanpaolo reported results for the first time following the merger of Intesa and Sanpaolo IMI, but several analysts said the bank was still in transition, making comparisons with previous quarters difficult. Passera said the bank had gone to lengths to ensure the figures were comparable.
The Italian bank is undergoing a reorganization and is also about to acquire Italian lender Cassa di Risparmio di Firenze as part of its effort to boost its presence in central Italy.
Intesa Sanpaolo said first-quarter net interest income rose 13% to 2.43 billion euros ($3.29 billion) from 2.15 billion euros in same period a year ago.
The bank's client base rose by over 73,000 in the first four months since the merger went into effect.
Profits from trading fell to 440 million euros ($595.7 million) from the 502 million euros in the first quarter 2006, the bank said.
Profits from its insurance business rose to 101 million euros ($136.73 million) from 95 million euros in the same quarter a year ago but dropped 40% from the fourth quarter of 2006, when it posted a 168 million euro profit.
Intesa Sanpoalo shares closed down 0.57% at 6.07 euros ($8.22).