MILAN, Feb 5 (Reuters) - Italy’s top retail bank Intesa Sanpaolo met its widely trumpeted dividend pledge as it reported a higher 2018 net profit despite a weak end to the year, adding profit would rise further in 2019.
Revenues stagnated in 2018 but net profit totalled 4.05 billion euros ($4.6 billion) compared with 3.8 billion euros in 2017, when excluding a 3.5 billion euro cash payment it received from the state to take over two failing regional banks.
Results were boosted by a 400 million euro capital gain from the sale of a majority stake in its loan recovery business to Swedish debt collector Intrum.
The results allowed the bank to stick to its pledge to pay out 3.45 billion euros in dividends, or 85 percent of profits, on the year’s accounts.
Shares in the bank trimmed gains after the results with an analyst pointing to shrinking interest income.
This measure of returns made on lending fell by more than 5 percent in the three months from October to December, both on a quarterly and annual basis.
With asset management and insurance fees also weak in the fourth quarter while personnel costs rose sharply, Intesa’s operating profit dropped 17 percent from the previous three months.
Core capital however held broadly stable with a pro-forma fully-loaded common equity Tier 1 ratio of 13.6 percent.
By 1315 GMT shares in Intesa were up by 0.75 percent compared with a 2.6 percent rise before the results.
Loan writedowns in the full year stood at 2.4 billion euros compared with 3.3 billion euros in 2017. ($1 = 0.8754 euros) (Reporting by Valentina Za Editing by Silvia Aloisi/Keith Weir)