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Intesa sets Veneto targets, confirms 2017 dividend


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Intesa sets Veneto targets, confirms 2017 dividend

Intesa Sanpaolo SpA, now Italy's largest retail lender, has already begun integrating Banca Popolare di Vicenza SpA and Veneto Banca SpA after acquiring them in June with government backing, CEO Carlo Messina said Aug. 1, promising that the bank will meet its dividend forecast for 2017.

Messina told analysts on a call to discuss first-half earnings that Intesa has already agreed with trade unions on the early retirement of 4,000 employees and the redundancy of a further 1,000 by the end of 2017.

"[Intesa] will become the No. 1 player in the northeast of Italy, which is one of the richest areas of the country," said Messina. "Indeed we are confident that we will be able to enhance the value of the two former Venetian banks and we have already identified the key levers for value creation."

Intesa aims to finish expanding its computer system to the newly acquired operations by 2018, and by mid-2019 shut down 600 branches that belonged to Popolare di Vicenza and Veneto as well as rebrand their remaining offices. Seven hundred branches have already been renamed, the bank said.

At the same time, Intesa will pay a €3.4 billion cash dividend for 2017, the CEO assured investors. The bank booked net income of €4.34 billion for the second quarter, up from €901 million in the same period a year before, thanks to a government cash infusion of €3.5 billion it received as an inducement to take possession of Popolare di Vicenza and Veneto.

Without the contribution of the taxpayer, the bank's net income would have been €837 million in the second quarter.

Meanwhile, Intesa shed nonperforming loans with a nominal value of €3.5 billion in the first half, bringing its bad asset holdings to a gross €27.8 billion as of June 30.

In keeping with ECB directives, it aims to bring down its toxic loan portfolio to €10.5 billion in gross terms by the end of 2019, something that will require roughly €260 million in new expenditure on employees, data and infrastructure dedicated to the task, Messina said.