Q3 2020 results: statement by CEO Carlo Messina

In the first nine months of the year, faced with a very challenging environment, Intesa Sanpaolo has achieved a net income of €3.1 billion exceeding its commitment to deliver net income of at least €3 billion in 2020.

These very positive nine-month results enable Intesa Sanpaolo to put in place concrete initiatives to support the community, its customers and its people, continuing in its role as the engine of inclusive and sustainable growth.

 

The full statement by Carlo Messina, CEO of Intesa Sanpaolo, follows:

“From the very first days of this extraordinary COVID-19 emergency, our Bank has put in place concrete initiatives to support the community, our customers and our people. We will continue to do so to the benefit of families and businesses, certain of our role as the engine of inclusive and sustainable growth.

“We provided donations exceeding €125 million to help face the COVID-19 emergency, with support from the Bank, its managers and employees, and its customers.

“Our role in supporting Italy’s economy is clear and concrete. We have provided €60 billion in credit to families and businesses, protecting jobs and ensuring liquidity to the productive economy. These measures also include innovative financing tools such as impact loans that support local business communities.

“We were the first to offer loan and mortgage suspensions, which in recent months have totaled €66 billion. We have also provided government-backed loans totaling about €24 billion.

“Our role as the engine of sustainable growth rests on the Bank's resilient profitability over time, supported by increasing cost efficiency and capital strength that leads among European banks.

“In the first nine months of the year, faced with a very challenging environment, we achieved a net income of €3.1 billion. This means that in just nine months, we have already exceeded our commitment to deliver net income of at least €3 billion in 2020.

“Taking into account the €3.3 billion of negative goodwill and the two-month contribution from UBI Banca, net income jumps to €6.4 billion. In the fourth quarter, we will decide how to allocate the negative goodwill to further reinforce the Bank's balance sheet and face 2021 with additional strength.

“In the third quarter, revenues benefited from a significant recovery in net interest income and commissions. Furthermore, net inflows to assets under management are accelerating. The sharp reduction in costs continues, underlining our best-in-class operational efficiency among European banks.

“We further strengthened our balance sheet, reducing the NPL stock by €3 billion in nine months. The inflow of new impaired loans reached the lowest level ever recorded in the first nine months of the year.

“In the third quarter alone, we generated enough capital to more than offset the impact of the integration of UBI Banca.

“Thanks to the more than €1 trillion in savings that Italians entrust to us, our Group is a national champion and a European leader.

“The combination with UBI Banca further solidifies our position. The integration is running smoothly and in some cases, we are meeting our objectives ahead of time. As a result, we expect to achieve significant synergies, even higher than the €700 million announced in June.

“We have appointed a Board of Directors of high standing at UBI Banca. The team leading the integration process is doing outstanding work. Thanks to this, the people of Intesa Sanpaolo and UBI Banca will be able to work together towards additional growth and development in the coming months.

“We are therefore in the best possible condition to achieve a net income of at least €3 billion in 2020 and €3.5 billion in 2021, without considering the integration with UBI. The expected net income for 2022 – including the benefits from the integration with UBI Banca – is at least €5 billion. All while maintaining a strong capital position, even in light of the potential distribution of dividends from reserves for 2019.

“We are certain that we are one of the best positioned banks to be able to resume the distribution of dividends once the ECB allows it.

“We confirm a payout ratio of 75% for 2020 and 70% for 2021. In addition to the dividend planned for 2020, we will seek the ECB's consent for the distribution from reserves of the dividend for 2019.

“In a moment of unusual complexity marked by the pandemic, Intesa Sanpaolo has demonstrated its ability to deliver its objectives, thanks to the teamwork of its top management and the professional quality of its people. My personal thanks go to all of them, for how they have supported families and businesses with extraordinary credit measures and for the continuous care given to managing our customers' savings. These very positive nine-month results enable our Bank to continue in its role as the engine of inclusive and sustainable growth”.