May 15, 2014 / 12:02 PM / 3 years ago

Intesa Sanpaolo returns to profit in Q1, loan loss charges stay high

MILAN, May 15 (Reuters) - Italy's biggest retail bank, Intesa Sanpaolo, swung back to profit in the first quarter thanks to higher operating revenues and further boosted its core capital ratios, already among the highest in the euro-zone's third biggest economy.

The bank booked a net profit of 503 million euros ($689.64 million), well above a forecast of 323 million euros in a Reuters poll of eight analysts. Intesa said it was its best net profit in two years.

Like domestic rival UniCredit, Intesa had booked massive loan loss charges in the final quarter of 2013 in preparation for a Europe-wide health check of banks, resulting in full-year loss of 4.55 billion euros.

Loan loss charges remained high in the first quarter, at 1.1 billion euros against 1.16 billion euros a year ago. The stock of impaired loans, which fell at UniCredit for the first time since 2008, was broadly stable for Intesa, at 31.16 billion euros, up 0.6 percent from a year earlier.

The bank said its Common Equity Tier 1 ratio, a measure of financial strength, had further improved in the first quarter to 12.6 percent from 12.3 percent at the end of 2013, well above the 8 percent minimum requirement set by European regulators. ($1 = 0.7294 Euros) (Reporting by Silvia Aloisi; Editing by Lisa Jucca)

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