* Q2 net profit 217 mln euros versus 109 mln euros consensus
* Core capital ratio strong at 12.9 percent
* Messina says bank wants to stay in Hungary despite
* Loan loss provisions remain high
(Adds analyst comment, details)
By Silvia Aloisi
MILAN, Aug 1 Italy's biggest retail bank, Intesa
Sanpaolo, beat analysts' forecasts with a
second-quarter net profit of 217 million euros ($291 million),
helped by its strategic shift towards asset management.
Intesa's net profit in the three months from April to June
compared with 116 million euros a year ago and a Thomson Reuters
consensus forecast of 109 million euros.
The bank said its operating result and pre-tax profit for
the period were the best in the last nine quarters, with higher
revenues from asset management and capital gains from stake
sales offsetting the impact of one-off charges such as higher
At 3.3 billion euros, asset management commissions in the
first half of the year were up 9 percent from a year earlier and
were the highest since 2007.
Results were affected by a number of one-off items. On the
negative side, Intesa had to pay some 440 million euros in
additional taxes on the revaluation of its 40 percent stake in
the Bank of Italy.
It also took a 65 million euro charge in the second quarter
because of new legislation in Hungary requiring banks to
compensate customers for exchange rate spreads applied on
foreign currency loans - the latest setback for the country's
mostly foreign-owned lenders.
On the positive side, it booked capital gains of 220 million
euros from the sale of stakes in payment services group SIA and
hotel chain NH Hoteles.
Intesa's CEO Carlo Messina could not say whether Hungarian
measures aimed at protecting borrowers could result in further
charges, but said Intesa considered its operations in the
country strategic and wanted to stay there.
The group's provisions for loan losses remained high at 1.18
billion euros, as its home market Italy struggles to emerge from
its longest recession since World War II.
Like other European lenders, Intesa is shedding non-core
assets to boost its capital base, which is already one of the
strongest in Italy, in preparation for a Europe-wide health
check of lenders to be completed later this year.
"We are confident that we will emerge as winners from the
comprehensive assessment," Messina told analysts in a conference
The Common Equity Tier 1 ratio, a measure of financial
strength, stood at 12.9 percent, from 12.6 percent at the end of
Analysts said the results were above expectations on most
counts, although bad loans grew 3 percent quarter-on-quarter,
compared with a 1 percent increase in the first quarter.
"The...strategy based on asset management business is
delivering, as the strong revenue performance is supported by
net fees," said Carlo Tommaselli of Societe Generale.
"The only slightly disappointing data was asset quality,
worsening a bit more than expected."
The shares were trading 2.5 percent higher by 1446 GMT at
($1 = 0.7465 Euros)
(Reporting by Silvia Aloisi; Editing by Elaine Hardcastle)