Banco BPM Reduces Loan Depreciation, Revenues Rise and Land Profits Boom

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A woman walks past the Banca Popolare di Milano (BPM) bank in downtown Milan, Italy, January 29, 2016. REUTERS/Alessandro Garofalo

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MILAN, May 5 (Reuters) – Italy’s Banco BPM (BAMI.MI) reported better-than-expected first-quarter net profit on Thursday, helped by a combination of higher revenue and lower loan writedowns.

Banco BPM, which is Italy’s third-largest bank, said its net profit for the three months to March rose 77.6% from a year earlier to 177.8 million. euros (187 million dollars), higher than the forecast of 131 million euros in a Reuters poll. of analysts.

First-quarter revenue was 1.186 billion euros, slightly above expectations and up 5.2% year-on-year, supported by strong trading gains and net interest income dynamic.

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Banco BPM said it would continue with its risk reduction policy and, as part of this strategy, announced the sale of 700 million euros of degraded loans.

The bank wants to make net fees its main profit driver, as it focuses on wealth management and insurance.

Early last month, it took its first step in its new insurance strategy by acquiring full ownership of its French-owned life insurance joint venture Covea.

Banco BPM also has the option to exit early, from January 1, 2023, another insurance partnership it has with Cattolica, now part of Italy’s Generali (GASI.MI).

Its main option is to internalize the insurance business by the end of 2023.

However, he will assess a potential partnership for the company after receiving several expressions of interest from major players, including Generali, France’s AXA (AXAF.PA), Germany’s Allianz (ALVG.DE) as well as its main shareholder, the French bank Crédit Agricole. (CAGR.PA).

Early last month, Crédit Agricole became the largest investor in Banco BPM with a 9.2% stake which it said was aimed at broadening the scope of strategic partnerships between the two, currently focused on credit to the market. consumption. Read more

The move fueled speculation that a full takeover could follow. Credit Agricole has told the Italian Treasury, however, that it has no bid plan, sources familiar with the matter said last month.

($1 = 0.9493 euros)

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Reporting by Andrea Mandalaà; Editing by Giulia Segreti and Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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