MILAN (Reuters) - Italy’s third-largest bank Banco BPM (BAMI.MI) on Thursday reported a better than expected first-quarter net profit and said it would set new targets to take into account the fallout from the coronavirus crisis.
Banco BPM had presented a new business plan in March, at the start of the outbreak, setting targets driven by higher fees and falling loan loss charges.
To brace for the economic hit of the virus crisis the bank said it had written down performing loans in the quarter, driving overall provisions up 40% from a year earlier.
However, strong trading gains and higher fees lifted revenue, despite a drop in net interest income.
Banco BPM, rooted in the areas worst hit by the pandemic, said it would update its strategy once it had more clarity on the macroeconomic outlook.
The current plan envisaged a slight economic contraction in 2020 and a rebound in 2021. Italy’s economy is now seen plunging into its worst post-war recession this year.
Net profit for the three months came in 151.6 million euros ($163.8 million), versus 155 million euros a year earlier and above a Reuters average analyst forecast of 102 million euros.
Total revenue came in at 1.16 billion euros, up 9% from a year ago thanks to a tripling of trading income.
Reporting by Andrea Mandalà; editing by Valentina Za and David Evans