MILAN, Jan 9 (Reuters) - Italian state-owned bank Monte dei Paschi di Siena said on Thursday it expected a 1.2 billion euro ($1.3 billion) net profit hit in the fourth quarter after reducing the value of deferred tax assets on its balance sheet.
The bank said tax breaks recently reintroduced by the government lowered its future taxable income and, as a consequence, the value of its deferred tax assets (DTA).
The lower DTA value also reflects more pessimistic assumptions on the economy and interest rates, leading the bank to project lower future earnings, it said.
Monte dei Paschi said it would book the negative tax effect in the fourth quarter, adding there would be no impact on its closely-watched capital ratios because the DTA are not counted towards the bank’s capital.
Before taxes and non-operating items, Monte dei Paschi said its operating result this year would be in line with 2018.($1 = 0.9002 euros) (Reporting by Valentina Za)
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