Intesa Sanpaolo S.p.A. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

  • Record-High Profitability: Net income for Q1 2023 reached €2.0 billion (best quarter since 2007), marking an 18.9% increase vs. Q1 2022. Excluding the final contribution to the resolution fund, net income was €2.2 billion.
  • Upgraded Guidance: Full year 2023 net income guidance was raised to €7.0 billion (up from €6.5 billion previously), with expectations to exceed this in 2024 and 2025.
  • Operating Performance: Achieved the best-ever quarter for operating income, operating margin, and gross income. Operating costs remained stable YoY, contributing to the lowest-ever cost/income ratio and cost of risk (17bps).
  • Capital Position: Common Equity Tier 1 (CET1) ratio rose to 13.7%, even after absorbing majority of expected regulatory headwinds. Including DTA effect, CET1 reaches 15%. CET1 expected to stay above 12% over business plan period through 2025, with excess capital reaching €5bn at end of Q1.
  • Asset Quality & Risk: Asset quality continued improving, reaching 1% net NPA ratio (already achieving business plan target). Cost of risk expected at 35-40bps for 2023 despite the Q1 result of 17bps. €900 million in overlays remain untouched for potential future needs.

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Operator: Good afternoon, ladies and gentlemen, and welcome to the conference call of Intesa Sanpaolo for the presentation of the First Quarter 2020 Results, hosted today by Mr. Carlo Messina, Chief Executive Officer. My name is Raziel, and I will be your coordinator for today's conference. At the end of the presentation, there will be a question and answer session. [Operator Instructions]. I'll remind you all that today's conference is being recorded. At this time, I would like to hand the conference over to Mr. Carlo Messina, CEO. Sir, you may begin. Carlo Messina: Thank you. Welcome to our first quarter 2023 results conference call. This is Carlo Messina, Chief Executive Officer; and I'm here with Stefan Del Punta, CFO; and Marco Delfrate and Andrea Tamagnini, Investor Relations Officers. Today, I'm going to walk you through a very high-quality set of results. We delivered the best ever start to the year. We are highly profitable, liquid and capital solid. Russia exposure is approaching 0, and we have further strengthened our 0 NPL status. Net income at €2 billion was the best quarter since 2007. Q1 was also the best-ever quarter for operating income, operating margin and gross income. Costs were stable with the lowest ever cost income ratio. These strong results mean that we can raise our net income guidance for the year to €7 billion. Rewarding shareholders while maintaining a solid capital position is embedded in our DNA and remains a priority. In Q1, we already accrue

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