Suspension of 2019 dividend: statement by CEO Carlo Messina

Carlo Messina CEO Intesa Sanpaolo

Today, we made an important decision regarding our shareholders' remuneration policy. In 2019, Intesa Sanpaolo fully delivered all of its Business Plan objectives. We achieved a Net income of €4.2 billion – the highest in the past 11 years – while strengthening capital and our risk profile, that rank at the top of the sector in Europe. Our Board of Directors therefore approved in February a dividend per share proposal of €0.192.

As Italy and the whole world face an unprecedented emergency, we have decided to adopt the guidance of Supervisory Authorities.

Consequently, we have postponed the distribution of the 2019 dividend, with the intention of convening a new Shareholders' Meeting after 1 October to consider the distribution of the originally planned dividend.  

Taking into account the suspension of the dividend, our pro-forma fully loaded Common Equity Tier 1 ratio at the end of 2019 would be equal to 15.2% and the capital exceeding the regulatory requirements would be above €16.5 billion. Additionally, if we apply the ECB’s recently approved changes to regulatory requirements, excess capital would climb to around €19 billion.

Groups such as Intesa Sanpaolo, that lead the sector in terms of excess capital and operational efficiency, are the most resilient banks in difficult phases and, as such, are the ones that benefit from the flight-to-quality. They are also the ones that can return to remunerating shareholders with high and sustainable dividends in the coming months.

We do believe that the distribution of cash dividends by banks with high levels of capital – able to fulfill their role in supporting families and businesses even in complex circumstances – is important for retail shareholders and remains a crucial support to the charitable initiatives undertaken by the Italian banking foundations that make up a part of our shareholding, particularly important in the context of the Coronavirus epidemic.

Our Bank stands out – and will continue to do so – for its ability to reward shareholders in a significant and sustainable way as well as for being the engine of inclusive growth.

With regard to the voluntary public exchange offer on the ordinary shares of UBI Banca, we are convinced that the combination, in this extraordinary moment, assumes even greater strategic value and represents for UBI Banca an even more compelling prospect: strong capital, robust coverage of impaired loans, scale, diversification and investment capacity are now even more valuable. The creation of a bank able to generate additional benefits for all stakeholders and bringing solid support to the real and social economies makes Italy stronger.

Intesa Sanpaolo immediately stepped up to support the economy and society in this moment of exceptional urgency. We did not hesitate to launch many significant initiatives to counter the effects of the pandemic. We are ready to introduce new ones for families, businesses and society as a whole.

We immediately intervened to support our customers, families and businesses. Responding urgently to the liquidity needs of the productive system, we introduced a €15 billion line of credit – equal to about one percentage point of GDP. We suspended mortgage and loan payments for families and businesses affected directly or indirectly by the emergency. The Group's Insurance Division provided free extended health coverage for policyholders infected with the virus.

In line with the Bank's social mission, we donated €100 million for the structural reinforcement of Italy’s National Health Service and, during the emergency, to purchase equipment, instruments and medical supplies. We also made available our "ForFunding" crowdfunding platform to collect donations to support urgent healthcare initiatives. We provided €350,000 to accelerate the construction of a field hospital in Bergamo by the National Association of the Alpini. We are funding COVID-19 medical research through a €1 million donation by our Charity Fund. We are supporting Public Entities and Regional Governments with specialized consulting on payment instruments and international regulation; so far this has enabled the purchase of some €300 million in medical supplies.

As one of the main employers in Italy, we have put the physical safety of our people front and center, immediately enhancing remote working and quickly enabling 21,000 people able to work from home. For our colleagues who work in branches, the Bank has increased their leave by six days, in recognition of their concrete commitment to ensuring continued service to the public. In the same spirit and to protect the health of our employees and customers, we expanded the range of banking operations that can be performed remotely, such as the suspension of mortgage or loan payments, so that we can receive our customers by appointment only.

Additionally, I have personally decided to donate €1 million of the bonus awarded to me through the 2019 incentive scheme to support of specific health initiatives related to the Coronavirus epidemic. I am proud to announce that the 21 top managers reporting directly to me will also make similar donations for a total of around €5 million.

The strength of our Bank and our people will continue to stand alongside Italy’s businesses, families and broader society as we move beyond the emergency and begin to relaunch an inclusive, sustainable growth.