ROME-Italian bank Intesa Sanpaolo SpA said Tuesday its second-quarter net profit jumped to 4.34 billion euros ($5.11 billion), largely because of a EUR3.5 billion government contribution aimed at shielding its capital base from the hit from rescuing two smaller banks.
Without the injection of public funds, Intesa said its net profit for the quarter stood at EUR837 million, compared with EUR901 million in the same quarter a year earlier.
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In June, midsize lenders Banca Popolare di Vicenza SpA and Veneto Banca SpA went bust, requiring a government rescue. Rome liquidated the lenders' bad assets and sold the good ones to Intesa for one euro.
The deal included a public contribution to Intesa to digest and restructure the two banks and another EUR12 billion in guarantees covering the potential cost of disposing of the bad loans and some legal risks related to the two banks' previous activity.
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(END) Dow Jones Newswires
August 01, 2017 07:40 ET (11:40 GMT)