Monte dei Paschi: quarterly profit up sharply

Monte dei Paschi: quarterly profit up sharply
Monte dei Paschi: quarterly profit up sharply

Milan (awp/afp) – The Italian bank Monte dei Paschi di Siena (MPS) posted net profit in the first quarter up 41.2% to 333 million euros, higher than expectations. The oldest bank in the world has benefited from the “acceleration” of commissions and income generated by interest rates.

This result, published on Tuesday, clearly exceeds the consensus of Factset analysts who expected an average of 275 million euros. In 2023 MPS had recorded a net profit of 2.05 billion euros, significantly beyond forecasts, and intends to pay dividends to its shareholders for the first time in thirteen years.

Monte dei Paschi “is already operating at full capacity, but we are determined to accelerate further”, commented its general director Luigi Lovaglio during a conference with analysts. For the full year 2024, it confirmed the forecast of a pre-tax profit of around 1.3 billion euros.

Monte dei Paschi recorded an increase of 15.2% to 1.01 billion euros in its revenues in the first quarter, confirming a clear recovery of this bank long considered the weak link in the Italian banking sector. Commissions, which had fallen by 3.1% in 2023, rebounded by 10.1% to 365.3 million euros.

Net interest income increased by 16.4% to 587 million euros, in a context of high rates on the markets. Monte dei Paschi completed a capital increase of 2.5 billion euros in November 2022, aimed at strengthening its equity.

The CET1 capital ratio, which measures the bank’s financial strength, increased to 18.2% pro forma at the end of March, from 18.1% at the end of December, taking into account dividend payments. At the time on the verge of resounding bankruptcy, MPS had to be bailed out in 2017, to the tune of 5.4 billion euros, by the Italian state which became its main shareholder.

The Italian Ministry of the Economy announced in March that it had placed on the markets for an amount of 650 million euros a new share of 12.5% ​​of the capital of the Bank of Siena of which it had already sold 25% in November 2023 Rome, which must withdraw from the capital of MPS in order to meet the requirements of the European Commission in terms of state aid, has continued to sell its shares to investors, failing to find a buyer.

The Italian State’s share in MPS has thus been reduced to 26.73%, and other transfers could follow.

afp/vj

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