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Unicredit and Intesa speeding up on NPLs

19 February, La Repubblica

Unlike Bnl, which has been merged into the group Bnp Paribas, the two main Italian banks are not planning any international merger. This is not the only thing in common that Unicredit and Intesa Sanpaolo share, as one could note when the two banks disclosed their financial statements last week. Another common element is the optimistic tone of both statements and of the business plans till 2020-2021. Unicredit has reported profits for 5.5 billion (that become 3.7 net of the earnings originated from the transfers of Bank Pekao and Pioneer) and a revenue grown by 1.7% up to 19.6 billion, an interest margin steady at 10.3 billion and commissions increased by 7.1%. Good news for the shareholders, considering also dividends for 20% of the profits, a percentage that will grow through the years as the Ceo Jean-Pierre Mustier has promised. But the most significant element is the considerable reduction of the NPL stock, furtherly reduced of 4 billion over the past year after the 17 billion registered in the previous financial year. We must also remember that it was indeed the considerable weight of non-performing loans that brought to a debt of 11.8 billion in 2016. For what concerns Intesa, the bank has reported net profits of 7.3 billion including the public contribution for 3.5 for the acquisition of the assets of Popolare Vicenza and Veneto Banca. Even without considering the two Venetian banks, the profits amount to 3.81 billion, having grown by 3.11 billion in comparison with 2016.

The Board of Directors of the bank has proposed a distribution of dividends for 3.4 billion as well as of the profits. Concerning the non-performing loans, Carlo Messina has adopted the following strategy: the bank hasn’t considered the transfer of NPLs as strategic till now, but with the new 2018-2021 plan, taking into account the new ECB regulations, the bank will speed up the disposal process. The bank has, in fact, promised to halve the gross NPL stock up to 26.4 billion and up to 12.1 for net NPLs, with an impact on the outstanding debt of respectively 5.5% and 2,9%.

Source: La Repubblica

Translator: Cristina Ambrosi