Bank Intesa SanPaolo's earnings boosted by wealth management

MarketsAssociated Press

Italian bank Intesa SanPaolo on Friday reported a nearly 12-percent increase in first-quarter profits as commissions hit their highest levels ever on double-digit growth.

Italy's second-largest bank reported net income of 901 million euros ($987 million) in the period ending March 31, compared with 806 million euros in 2016. The bank said net income would have been 1.2 billion euros excluding contributions to a national resolution fund and a writedown on its stake in the Atlante fund to bail out weaker Italian banks.

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Shares in the bank were trading up 3.3 percent at 2.85 euros.

Net fees and commissions grew by 10 percent to 1.85 billion euros thanks to a rebound of assets under management, now at 320 billion euros, and a rise of 3 percent in net interest income to 1.8 billion euros despite the low interest rate environment.

CEO Carlo Messina said assets under management grew by 5.3 billion euros in the first quarter, which "confirmed that ISP is one of the leading European wealth management companies."

The bank's stock of bad loans hit the lowest level in 3 ½ years, while its loan loss provision were up just slightly from last year at 695 million euros.

Intesa said it would book a capital gain of 800 million euros in the second half from the sale of the AllFunds mutual fund platform.