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Profit at Italy's BPER falls less than expected as loan writedowns shrink

Profit at Italy's BPER falls less than expected as loan writedowns shrink
Profit at Italy's BPER falls less than expected as loan writedowns shrink   -   Copyright  Thomson Reuters 2022
By Reuters

MILAN – Italy’s fifth-largest lender BPER Banca on Monday reported a smaller-than-expected drop in first quarter profit helped by higher revenues and lower loan writedowns.

BPER has minimal exposure to Russia, unlike larger peers UniCredit and Intesa Sanpaolo which had to book large provisions against loan losses in the first quarter to cover for risks stemming from the Ukraine crisis.

BPER said loan loss provisions totalled 113 million euros, sharply down from 419 million euros a year before.

Net profit for the three months through March was 113 million euros ($119 million), down 72% from 400 million euros a year ago, when it included an around 1 billion euro positive accounting effect stemming from the acquisition of branches.

The figure came significantly above an average forecast of 72 million euros in a Reuters analyst poll.

Revenues rose 9.6% year-on-year driven by higher net interest income and fees as BPER‘s expanded its domestic footprint by buying branches that Intesa Sanpaolo was forced to offload when it took over rival UBI.

It said revenues were expected to grow in 2022 barring a significant worsening of the geopolitical situation.

BPER in February agreed to buy troubled rival Carige in a deal that propels it further along the expansion path set out by leading shareholder UnipolSAI, which is looking to build a wide distribution network for its insurance products.

The deal, which will further lift BPER‘s assets to more than 155 billion euros making it Italy’s No.4 lender, is expected to close at the beginning of June, slightly earlier than planned.

BPER will present a new business plan after finalising the acquisition of Carige. ($1 = 0.9488 euros)