FINANCIALS: Intesa Preview: Revenues, Russia, Loan Losses To Feature

Intesa Sanpaolo (ISPIM: Baa1/BBB/BBB) results are 30-Jul. The lateral from Unicredit earlier this week is solid, and spreads have rallied 10bp (relative) into these results so there is some expectation built in. Rate impacts on the revenue outlook and asset quality are likely to be key features, in our view.

• ISP reported 1Q24 (on 3-May) which were positive with revenues, costs and loan losses all better than expected. NPLs were up 20bp (to 2.0%) and CET1 did miss expectations but was up (10bp) from Dec-23. Guidance was confirmed but the equity market was hoping for a greater buyback steer, in our view. UniCredit’s domestic results (on 24-Jul) were a solid lateral for the bank.
• Intesa has a business in Russia and, reportedly, stopped EUR conversions and transfers on 13-Jun. With the recent headlines around Unicredit and the ECB (aside from Raiffeisen), a hasty exit appears politically expedient but may also be expensive. This could feature in results. 
• Spreads have railed 12bp since those results (€IG banks -3bp), most of this relative performance having come in the last month. The equity is within 3% of the index move, so only very minor outperformance.
• Revenues estimates are up 1-2% following the good news last time, which have pushed earnings up 2-4%.

Results are due at 1100 (London time) and the conf call is 1400 at: https://group.intesasanpaolo.com/en/investor-relations/results