Profit at Italy's BPER boosted by stronger fees after Pop Sondrio merger
BPER Banca's Q1 Performance and Strategic Developments
By Andrea Mandala
Financial Results Overview
MILAN, May 7 (Reuters) - BPER Banca posted a first-quarter net profit on Thursday slightly above market expectations, as its net interest income held up and the merger with rival Banca Popolare di Sondrio boosted net fees.
Impact of Pop Sondrio Merger
Italy's fifth-largest bank completed a 5.4 billion euro ($6.4 billion) cash-and-share bid for regional peer Pop Sondrio in July, a deal it has described as a defensive move triggered by a wave of consolidation in Italian banking.
Consolidation Trends and Shareholder Support
The M&A round is expected to continue and investors regard BPER as a player that could again play a role in it, thanks to the backing of its main shareholder: leading Italian insurer Unipol.
Integration and Future Outlook
CEO Gianni Franco Papa said BPER was fully focused on the integration of Pop Sondrio. Though it has no M&A deals on the table at present, however, the bank continues to monitor market developments, Papa said.
"Never say never," he told a post-results analyst call.
Profit and Revenue Breakdown
The lender reported an adjusted net profit of 549 million euros ($645 million) for the three months to March.
Stripping out extraordinary items, including also integration costs, net profit stood at 519 million euros, just ahead of a Reuters-compiled analyst consensus forecast of 510 million euros.
Net fees rose by a quarter year-on-year to 681 million euros, driven by the contribution from the enlarged group which lifted commissions earned on the sale of asset management and insurance products. On a like-for-like basis fees rose 3.7%.
Total revenues grew more than 24% from year earlier, though they declined 5.1% on a comparable basis, hit by falling trading income.
Next Steps and Market Context
BPER Banca said it would update its industrial plan on August 6.
($1 = 0.8510 euros)
(Reporting by Andrea Mandalà, editing by Giulia Segreti, Barbara Lewis and Valentina Za)
