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Banco BPM swings to Q2 loss from year-ago profit

Banco BPM SpA reported reclassified, consolidated second-quarter net loss of €21.0 million, compared to net income of €46.8 million in the same period in 2016.

Net interest income fell on a yearly basis to €511.3 million from €535.8 million, while net fee and commission income rose to €543.4 million from €474.5 million. Net provisions for risks and charges reached €9.6 million, compared to reversals of €5.9 million a year ago.

Loss on the disposal of equity and other investments reached €3.8 million, compared to a profit of €30.9 million in the second quarter of 2016.

For the first half, the Italian lender reported reclassified, consolidated net profit of €94.2 million, up from a net loss of €230.0 million in the same period in 2016. Including badwill generated by its merger-related purchase price allocation, the bank reported a reclassified, consolidated first-half net income of €3.17 billion.

The bank's pro forma phased-in common equity Tier 1 ratio stood at 11.92% as of June 30, compared to the pro forma 11.94% at Jan. 1, 2017, when the merger between Banca Popolare di Milano SpA and Banco Popolare Società Cooperativa to create Banco BPM was completed. On a fully loaded basis, the pro forma CET1 ratio stood at 11.31% at June-end, compared to a pro forma CET1 ratio of 11.42% at the end of 2016.

Including the first-half net income in CET1 capital, the bank's CET1 ratios were 11.07% on a phased-in basis and 10.40% on a fully loaded basis as of June-end. The bank said it has already notified the European Central Bank of the intention to apply for the inclusion of its first-half net income in CET1 capital.

The bank said that for the second half, its focus will be on recovering profitability, which is set to benefit from the synergies generated by its merger. Banco BPM said its nonperforming loan coverage levels will remain high, and its NPL stock will continue to decrease owing to internal work-out activities and the implementation of its bad loan disposal plan.