Intesa Results; Better Asset Quality Tempered By Equity Payout

Intesa (ISP IM) 4Q23 results out, operating metrics in line/slightly ahead of consensus with better loan loss provisions and a new buyback commitment for equity holders. Likely credit neutral as better balance sheet quality tempered by implied higher leverage from that payout.

• Revenues were +12.5% y/y and broadly in line with consensus, costs were marginally better than consensus and loan loss provisions were better than expected leading to net profit of EUR1.60bn, +3% vs. consensus.
• Key credit metrics: loan losses (excl. exceptionals) fell to 57bp (from 33bp in 3Q23) and the net NPL ratio fell 10bp to 90bp from Sep-23. CET1 is 13.7% (+10bp in the quarter) and total capital is 19.2% (flat), former better than 13.4% expected.
• Mgmt announced a new buyback of 55bp of CET1 (looks like EUR1.7bn or 3% implied payout yield) which equity holders will enjoy. The outlook statement states “solid” FY24 revenue growth expected; consensus implies only 1.6% y/y so at least expectations are low.

Conf call is 1400 London time at www.group.intesasanpaolo.com