UPDATE:Monte Paschi 2Q Net Profit Down On Lower Net Interest Income
August 28 2009 - 3:54AM
Dow Jones News
Banca Monte dei Paschi di Siena (BMPS.MI) said Friday its
second-quarter net profit tumbled on lower net interest income and
lower commissions, but confirmed net interest income guidance for
2009 and revised cost cuts to between 4% and 5% from 3%.
The Siena-based bank said net profit for the quarter ended June
30 was EUR31.5 million, compared with EUR381 million in the
corresponding quarter of 2008 and EUR301 million in the first three
months of 2009.
The Italian lender said its Tier 1 ratio at the end of June was
5.8%.
Monte Paschi, like several other Italian banks such as Banco
Popolare (BP.MI) and Banca Popolare di Milano, has asked for
government-sponsored bonds to strengthen its capital ratios amid
the economic crisis. In all, Italian banks have asked for up to
EUR10 billion in government-sponsored bonds to strengthen capital
ratios. The bank said its Tier 1 ratio would be 7.3% after taking
the government sponsored bond.
At 0705 GMT, shares were up 2.7% at EUR1.58, outperforming a
positive market.
Monte Paschi's net interest income in the second quarter fell to
EUR987.5 million, down 10% from EUR1.098 billion a year
earlier.
Income from its bancassurance operations in the second quarter
was EUR341 million, and at the end of July it was EUR483 million,
the bank said. Monte dei Paschi has a bancassurance joint venture
with French giant AXA SA (AXA).
Earlier in August, the bank said it completed a EUR4.1 billion
securitization of mortgages.
According to a slide presentation, Monte dei Paschi has to sell
up to 135 branches mainly in Tuscani as part of an already
announced asset sale plan.
Monte Paschi also said operating profit in the quarter fell to
EUR183.4 million from EUR479.5 million a year earlier.
Company Web site: www.bmps.it
-By Sabrina Cohen, Dow Jones Newswires; +39 02 5821 9906;
sabrina.cohen@dowjones.com