Results for the first quarter of 2020 strengthen Intesa Sanpaolo’s ability to face effectively the challenging aftermath of the COVID-19 epidemic. They reflect both the Group’s sustainable profitability, which derives from a solid capital base and a strong liquidity position, a resilient and well-diversified business model and the strategic flexibility in managing operating costs, and its support to Italy, which includes the commitment to becoming a reference model in terms of sustainability and social and cultural responsibility.
Specifically, Intesa Sanpaolo, in the quarter, recorded a further improvement in capital ratios, efficiency, asset quality and cost of risk. In the presence of a decrease in non-performing loans and the cost of risk, the Group, with a perspective view, has already set aside around €300m provisions in the allowances for risks and charges which, together with the capital gain on the Nexi transaction over the year (a net capital gain of around €900m allowing to absorb around €1.2bn pre-tax of provisions), will build up a robust buffer of around €1.5bn to tackle the possible COVID-19 epidemic impacts for the entire year.
«The support provided by Intesa Sanpaolo to help families, businesses and society as a whole in facing these exceptional difficulties – which we initiated with the very first signs of the COVID-19 pandemic – is a source of pride for us. In a moment of unprecedented complexity, we have been a reference point for Italy thanks to the dedication and competence of our people, as well as the strength and solidity of our Group, built over years of management defined by sustainable profitability, robust capitalization and a low risk profile.
These distinguishing factors enabled us to intervene quickly, by significantly strengthening initiatives to provide credit, making significant contributions to the national healthcare system and more recently in providing significant resources to address socio-economic imbalances deriving from the pandemic. All while ensuring safe working conditions for our people and guaranteeing business continuity, thanks to an efficient organization and our strong digital infrastructure», - declaring the CEO OF INTESA SANPAOLO Carlo Messino.
Net income for the 1st quarter of 2020 amounted to €1,151m, which is 9.6% more than for the 1st quarter of 2019.
Operating income amounted to €4,882m, up 6.9% from €4,567m in Q4 2019 and up 11.7% from €4,369m in Q1 2019.
Operating costs amounted to €2,169m, down 15% from €2,552m in Q4 2019, attributable to decreases of 10.7% in personnel expenses, 26.6% in administrative expenses and 7.4% in adjustments. Operating costs for Q1 2020 were down 2.7% from €2,230m in Q1 2019, attributable to decreases of 2.3% in personnel expenses and 5.7% in administrative expenses and an increase of 1.5% in adjustments.
As a result, operating margin amounted to €2,713m, up 34.6% from €2,015m in Q4 2019 and up 26.8% from €2,139m in Q1 2019. The cost/income ratio was 44.4% in Q1 2020 versus 55.9% in Q4 2019 and 51% in Q1 2019.
Gross income amounted to €1,923m from €1,229m in Q4 2019 and €1,765m in Q1 2019, recording an increase of 56.5% and 9% respectively.
The common equity tier 1 ratio after accrued dividends in the 1st quarter of 2020 was:
- 14.5% proforma on a fully loaded basis;
- 14.2% on a transitional basis.