May 12, 2020 / 1:12 PM / 25 days ago

TABLE-Italian banks book 1.5 bln euros in COVID-19 provisions in Q1

    MILAN, May 11 (Reuters) - In reporting first-quarter earnings last week, Italy's top six
banks set aside 1.5 billion euros  ($1.63 billion) in provisions against loan losses to contend
with the fallout from the COVID-19 pandemic.
    They wrote down loans for a total of 2.49 billion euros in the period.
    Following is a summary of steps taken by the different banks and their outlook for the
economy and full-year loan losses:
    
                    Forecast on    COVID-19-rela    Overall       Gross      Estimate on FY
                    Italy's 2020       ted         loan loss     impaired     2020 cost of
                        GDP        provisions in  provisions   loans/total     risk (*) 
                                            Q1       in Q1        loans      
 Intesa SanPaolo    -8.0/-10.5%       300 mln       403 mln        7.1%        Up to 70 bps
                                     euros(**)       euros                   
    UniCredit           -15%       902 mln euros   1.26 bln        4.9%         100-120
                                                     euros                      bps(***)
    Banco BPM       -6.0%/-10.0%   70 mln euros    213.2 mln       8.8%        80-90 bps
                                                     euros                   
 Monte dei Paschi       -7%        193 mln euros    315 mln       11.8%            -
                                                     euros                   
    UBI Banca            -         50 mln euros    155.6 mln     6.7%        Below 100 bps
                                                    euros         (****)     
    BPER Banca           -         50 mln  euros   139.6 mln      11.1%      Around 100 bps
                                                     euros                   
 (*) Cost of risk measures loan loss provisions as a proportion of the value of the loans.    
(**) Intesa has said it can absorb up to 1.5 billion euros in loan writedowns linked to COVID-19
in the full year thanks to the 300 million euros set aside in the first quarter and a 1.2
billion euro capital gain from a recently agreed disposal.
(***) Cost of risk is estimated at 200-240 basis points in Italy alone in 2020. The group is
also present in Germany, Austria and Central Eastern Europe.      
(****) Pro-forma, including an 800 million euro disposal the bank is working on and aims to
complete in 2020. The ratio stands at 7.5% without it.


($1 = 0.9208 euros)

 (Reporting by Valentina Za and Andrea Mandala
Editing by David Goodman)
  
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