Intesa Sanpaolo S.p.A. Q2 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

  • Net Income: €3.3 billion excluding Russia-Ukraine provisions (€2.4 billion including provisions). This represents the best H1 performance since 2008.
  • Q2 2022 Net Income: €1.6 billion excluding €0.3 billion in Russia-Ukraine provisions.
  • Operating Performance:
    • Best ever H1 and Q2 in terms of operating income and margin.
    • Revenues up 1%; operating margin up 4% YoY.
    • Operating costs down 2.5% YoY.
    • Insurance income up 60% QoQ in Q2 – best quarter ever.
  • Net Interest Income (NII):
    • Grew 7% QoQ in Q2 and 2.5% YoY, with further upside from expected interest rate increases.
    • Estimated €900 million increase in NII for every 50bps rise in interest rates; NII sensitivity for +100bps estimated at €1.4 billion (down from €1.6bn previously due to partial rate capture).
    • Structural hedge expanded, positively contributing to NII.
  • Asset Quality:
    • Net NPL ratio at 1.0%; gross NPL stock reduced by €4 billion in H1 2022.
    • Underlying cost of risk at record low of 27bps due to zero-NPL bank status.
    • €400 million COVID overlay remains on balance sheet for future use.

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Operator: Good day, ladies and gentlemen. And welcome to the Conference Call of Intesa Sanpaolo for the presentation of the 2022 Half Yearly Results. Hosted today by Mr. Carlo Messina, Chief Executive Officer. My name is Nadia, and will be your coordinator for today's conference. At the end of the presentation, there will be the question and answer session. [Operator Instructions]. I'll remind you that today's conference is being recorded. At this time, I would like to hand the conference over to Mr. Carlo Messina. Sir, you may begin. Carlo Messina: Thank you. Welcome to our first half 2022 results conference call. This is Carlo Messina, Chief Executive Officer; and I'm here with Stefano Del Punta, CFO; and Marco Delfrate and Andrea Tamagnini, Investor Relations Officers. Today, I'm going to walk you through an excellent set of results for Q2 end of first half. So, first let me say a few words on the overall situation we are passing through. Even if there are some elements or possible concern like growing inflexion, the seclusion of Russia-Ukraine transmit and unstable political situation, I remain positive. So, my confidence is based on facts. First of all, the Italian economy is now much stronger than it was during the previous crisis, thanks to solid fundamentals. Despite the level of government there which is I but not sustainable as in many other countries. Italian household wealth is one of the highest in Europe, coupled with one of the lowest debt levels. Italian corpo

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