Italian bank Intesa SanPaolo sees Q2 profits dip slightly

MILAN (AP) " Italian bank Intesa SanPaolo said Tuesday that its second-quarter profit dipped while revenue fell only slightly despite tough market conditions and a subdued economy.

Italy's second-largest bank by assets reported that net income dropped 4 percent to 901 million euros ($1 billion) in the three months through June, compared with a year earlier. Revenue was up to 4.61 billion euros from 4.51 billion euros.

Net fees and commission income and interest income each dipped 4 percent to 1.8 billion euros. Trading profit rose 22 percent.

The bank reported that its load of non-performing loans dropped 2 percent, the third straight quarterly decrease. The loan-loss provisions rose to 923 million euros from 847 million euros a year earlier.

Intesa was one of the best-capitalized banks in the recent stress tests of EU banks. CEO Carlo Messina said Intesa SanPaolo's capital far exceeded regulators' requirements "even in the most adverse scenarios."

"The EBA stress test also confirmed it is a very low-risk bank and in a rational market, should have the benefit of a lower cost of capital than our peers," Messina told analysts, tacking on after a pause: "But I don't know if the market is rational."

Shares in the bank were down 3.8 percent at 1.829 euros.

Investors have been speculating on Italian banks due to exposure to some 360 billion euros ($400 billion) in bad loans that won't be paid back. While Intesa was among the best performers in the stress test, Italian bank Monte dei Paschi di Siena was by far the worst performer, announcing an immediate plan to dispose of bad loans and raise another 5 billion euros in capital.

Messina emphasized Intesa's role in accelerating growth in the real economy, saying the bank increased medium- and long-term credit by 24 percent in the first half of the year to 24 billion euros. Mortgages are up 80 percent year-on-year, he said.

This story has been automatically published from the Associated Press wire which uses US spellings

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