Intesa 2007 net 7.25 bln euros, confirms outlook

By Gianluca Semeraro and Valentina Za

MILAN (Reuters) - Europe's fifth-largest lender Intesa Sanpaolo (ISP.MI: Quote, Profile, Research, Stock Buzz) turned in 2007 net profit of 7.25 billion euros ($11.2 billion) and confirmed its outlook despite market turmoil which has prompted peers to back off forecasts.

Analysts had on average expected net profit of 8.33 billion euros but had cautioned that forecasting was difficult because of a range of one-off items.

Cazenove said in a note the results were "solid" but cut estimates by 5 percent for 2008 on the back of a 44 percent fall in trading income and lower fees.

Intesa Sanpaolo, Italy's biggest bank in terms of branches, said profits on trading slipped to 1.008 billion euros in 2007 from 1.799 billion in 2006.

Italian banks have largely weathered the worst effects of a crisis over lending in the U.S. subprime market because they have a conservative credit policy.

Intesa said its indirect exposure to U.S. subprime risk was negative for 49 million euros on a net basis, as its long positions were lower than short positions.

The bank, which is worth about $79 billion, said the overall impact of its exposure to products which have U.S. subprime mortgages as collateral was negative for 163 million euros last year.

Chief Executive Officer Corrado Passera said the bank expected further writedowns on structured credit products of around 100 million euros in the first quarter of 2008.