Intesa announces higher profit amid branch cut report

Now Reading :

Intesa announces higher profit amid branch cut report

Intesa announces higher profit amid branch cut report
Text size Aa Aa

Intesa Sanpaolo, which has more branches than any other bank in Italy, has reportedly told unions it could merge or close nearly one fifth of them to cut costs.

At the same time, Chief executive, Enrico Cucchiani, told shareholders at the annual general meeting in Turin that the bank would not be able to repeat its first-quarter performance for the rest of the year.

He cautioned 2012 full-year net profit cannot be calculated by simply multiplying the Q1 net profit by four.

Intesa Sanpaolo’s net profit in the first three months of the year was 804 million euros but that was increased by one-off items. It was up from 661 million euros in the same period a year earlier.

Cucchiani said its capital should exceed European Banking Authority requirements and the bank aims to keep its dividend at least in line with what was paid in 2011.

On the branch closures, Cucchiani is due to meet with union representatives in Rome on Wednesday.

On Sunday Nicola Manna of the Sinfub union said Intesa’s executives had raised the prospect of cutting 1,000 branches – more than double the 400 branches expected to be eliminated by the bank’s 2011-13 business plan.

Manna said that was proposed at a meeting with unions last week.

Intesa, which has an Italian network of 5,600 branches, is seeking to cut costs, increase working hours flexibility and boost profit at a time when Italian and European lenders are under pressure to streamline operations and sell assets to boost their capital base.