Italy's Banco BPM beats profit forecast as net fees jump

MILANO (Reuters) -Italy's Banco BPM on Thursday posted a higher-than-expected quarterly profit helped by higher net fees following its recent purchase of fund manager Anima Holding, which more than offset falling income from lending.

Italy's third-largest bank, which is again at the centre of potential future M&A developments in Italian banking after a failed takeover attempt by UniCredit, confirmed its full-year outlook.

In an effort to gear its business model towards fee income, following in the tracks of market leader Intesa Sanpaolo, Banco BPM moved to acquire fund business Anima in November, and managed to close the deal despite UniCredit's swoop.

The Milanese lender reported a net profit of 450.3 million euros ($525 million) for the July-September period, less than half the previous year's figure, which had been boosted by one-off gains including from the sale of its retailers' payments business.

Net profit for the quarter was above an average LSEG analyst forecast of 398 million euros.

A 24% yearly rise in net fees, driven by sales of wealth management and investment products, compensated a 12% drop in the net interest margin - the gap between lending and deposit rates - which has been narrowing as interest rates declined.

BPM said its board had approved paying an interim dividend of around 700 million euros, or 0.46 euros per share - a 15% increase compared with the interim dividend it paid in 2024.

($1 = 0.8575 euros)

(Reporting by Andrea Mandalà; Editing by Valentina Za)