MILAN, May 7 (Reuters) - Italy’s state-owned bank Monte dei Paschi di Siena posted a 244 million euro ($263 million) loss in the first quarter after writing down loans due to the economic fallout from the pandemic.
The Tuscan bank said it had booked 315 million euros in loan writedowns, twice as much as a year earlier, mostly due the worsening economic outlook, and had other one-off hits totalling 112 million euros in the three months to the end of March.
Monte dei Paschi said net fee income was up on a yearly basis, and had held stable from the previous quarter despite the disruption brought by the COVID-19 crisis, thanks to good asset management flows at the start of 2020, while it had also repaid sate-guaranteed loans on which it was paying a fee.
However, income from the traditional lending business was down by a fifth compared to a year earlier due to a downsizing of the loan book and the higher funding costs the bank had to shoulder to regain access to international bond markets.
Its phase-in CET1 ratio, measuring the best-quality capital, fell to 13.6% of assets at the end of March from 14.7% at the end of December.
Monte dei Paschi had posted a 1.2 billion euro loss in the fourth quarter of 2019 due to new tax rules which had forced it to write down the value of its deferred tax assets. ($1 = 0.9275 euros) (Reporting by Valentina Za; Editing by Kirsten Donovan)