May 5, 2020 / 10:40 AM / 23 days ago

Italy's Intesa posts surprise rise in Q1 net profit

MILAN, May 4 (Reuters) - Italy’s biggest retail bank Intesa Sanpaolo on Tuesday posted a surprise 10% rise in first-quarter net profit helped by strong revenue growth thanks mainly to trading gains, offsetting stagnating fees amid the coronavirus outbreak.

The bank said it had written down loans for 403 million euros in the quarter, only slightly more than a year earlier and less than in the three months through December.

Rival heavyweight UniCredit, which reports first-quarter results on Wednesday, said last month it would book 900 million euros in additional provisions against loan losses in the first quarter to reflect the economic slump caused by the coronavirus pandemic.

UniCredit said it was applying the IFRS9 accounting rule which requires lenders to book expected, and no longer actual, losses.

To avoid exacerbating the hit on the economy from the virus crisis, regulators have told banks to be flexible in applying the forward-looking IFRS9 accounting rule, resulting in different approaches by lenders.

Intesa said first-quarter net profit stood at 1.15 billion euros ($1.25 billion) compared with an 805 million euro average forecast in a Reuters survey of six analysts.

Revenues came in at 4.88 billion euros, above a Reuters analyst forecast of 4.25 billion euros. ($1 = 0.9218 euros) (Reporting by Valentina Za)

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