Q1 2020 results: statement by CEO Carlo Messina

As Intesa Sanpaolo publishes its strong first-quarter financial results, CEO Carlo Messina comments on the Group’s support for families, businesses and broader society during the COVID-19 emergency. He notes with pride that Intesa Sanpaolo’s social initiatives are among the most substantial worldwide by any private institution. 

Messina also announces a new allocation of €125 million by the Bank’s Fund for Impact to address “socio-economic imbalances deriving from the pandemic”. 

The Group’s Q1 results reflect its financial strength and solidity “built over years of managment defined by sustainable profitability, robust capitalization and a low risk profile”. Messina provides a positive outlook that sees Intesa Sanpaolo maintaining “high levels of profitability and a solid capital base” in 2020 and 2021.

Carlo Messina also invites UBI Banca shareholders to “join with the strongest bank in Italy and one of the strongest in Europe”, at a time when high capital levels, scale and investment capacity take on “even greater strategic value”. 

• donated more than €100 million for the health emergency
• allocated €125 million to initiatives addressing socio-economic imbalances deriving from the pandemic
• significant interventions thanks to a strong balance sheet and sustainable profitability

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

We present our first quarter results in the midst of an extraordinary emergency for Italy and globally. The support provided by Intesa Sanpaolo to help families, businesses and society as a whole in facing these exceptional difficulties – which we initiated with the very first signs of the COVID-19 pandemic – is a source of pride for us.

In a moment of unprecedented complexity, we have been a reference point for Italy thanks to the dedication and competence of our people, as well as the strength and solidity of our Group, built over years of management defined by sustainable profitability, robust capitalization and a low risk profile.

These distinguishing factors enabled us to intervene quickly, by significantly strengthening initiatives to provide credit, making major donations to the national healthcare system and more recently in providing significant resources to address socio-economic imbalances deriving from the pandemic. All while ensuring safe working conditions for our people and guaranteeing business continuity, thanks to an efficient organization and our strong digital infrastructure.

Beginning February 24th, we provided immediate support to the economy, initiating procedures for suspending installments of loans and mortgages. By the end of April, the total value of requested suspensions was around €24 billion for businesses and €13 billion for families.

During the first quarter, we helped more than 3,000 companies to get back on track, preserving around 15,000 jobs. We increased the amount of credit available to €50 billion to ensure continuity and productivity, providing the resources needed to overcome the crisis and to protect jobs. We are also supplying liquidity to SMEs in accordance with the Liquidity Decree and in an operating context that remains accountable to domestic and international regulatory authorities.

Our response to the health emergency has been robust. The Bank, its management and all of our people have provided over €100 million to strengthen healthcare structures and for projects with high social impact. Significant interventions were made in the hard-hit cities of Bergamo and Brescia.

Today we want to significantly strengthen these measures, put in place at the onset of the emergency: we have in fact decided to allocate €125 million from our Fund for Impact – or 50% of its total resources – to addressing socio-economic imbalances deriving from the COVID-19 pandemic.

The interventions put in place by the Bank to counter this unprecedented crisis can be considered among the largest by any private institution, including internationally. All this is made possible by our ability to deliver solid and sustainable results.

In the first quarter of 2020, in fact, we achieved a Net income of €1.4 billion, thanks to which we have already made significant provisions for the possible impact of the crisis; added to this is the capital gain deriving from the sale of our stake in NEXI. Taken together, we can count on €1.5 billion of additional reserves. Our profitability and efficiency allow us to look ahead and further strengthen our balance sheet.

The strength of our balance sheet also derives from the significant reduction in NPLs achieved in recent years, down to 2009 levels in terms of stocks and ratios, with robust coverage of 54%. This is thanks to our internal capabilities and to strategic partnerships, enabling us to deliver these results at no cost to shareholders.

With our well-diversified business model, we believe we are equipped to face a remarkably complex outlook. We expect to maintain high levels of profitability, with Net income of at least €3 billion for 2020 and at least €3.5 billion for 2021. At the same time, we expect to maintain a solid capital base with a Common Equity ratio above 13%.

We are convinced that in the current context and in the one that will emerge in the coming months, our proposal to UBI Banca shareholders gains even greater strategic value for UBI: high capitalization, robust coverage of impaired loans, scale, diversification and investment capacity now take on greater value than in normal times.

We are offering UBI shareholders the opportunity to join with the strongest bank in Italy and one of the strongest in Europe. Intesa Sanpaolo has always worked for the benefit of its people, customers, shareholders and the interests of the broader community. We will bring these defining traits to the territories that matter most to UBI.

We believe that significant value creation is amply achievable even if acceptance of our offer reaches just 50% + 1 share of UBI Banca.

In conclusion, I want to thank all Intesa Sanpaolo’s 90,000 people for the exceptional work and sense of duty shown throughout the emergency phase. Over 35,000 of them quickly adapted to smart working. Many others, with great commitment, have kept the customer contact network fully operational. A significant number contributed with donations to counter the emergency. For these reasons, I am truly proud to lead this Bank.