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MILAN, May 8 (Reuters) - Italy’s top retail bank Intesa Sanpaolo stuck to its pledge for higher full-year profits after beating forecasts in the first quarter, lifted by higher trading and net interest income.
Profits in the period rose 39 percent on the year to 1.252 billion euros ($1.5 billion) well above a consensus forecast from four analysts of 872 million euros.
The bank confirmed it would pay 85 percent of profit in dividends this year and said results showed it was on track to deliver higher profits in 2018 from 3.8 billion euros last year.
In recent years Intesa has switched from a traditional lending activity to business increasingly based on fees earned through asset management and insurance.
“This is a very good set of results at the top line level thanks to trading, net interest income and commissions, while the cost of risk is very low,” said a Milan broker who asked not to be named.
Intesa said in the first quarter gross non-performing loans amounted to 11.7 percent of overall loans with gross soured loans cut by 1.5 billion euros.
At 1200 GMT Intesa shares were down 1.2 percent compared with a 2.3 percent fall in the Italian banking index .
$1 = 0.8425 euros Reporting by Stephen Jewkes Editing by Louise Heavens and David Goodman