Italy's Monte dei Paschi di Siena has today reported a much larger than expected jump in first quarter net profit as it slashed costs and, like peers, reaped the benefits of higher interest rates.
Monte dei Paschi (MPS) said net profit came in at €236m, outstripping a €150m market consensus cited by analysts, and growing more than 20-fold compared with a €10m profit last year.
Income from the lending business rose 57% from a year before, outpacing expectations. Net fees also rose 7% from the previous quarter due to the sale of investment products.
Operating costs fell 14% year-on-year, to stand at 53% of income, sharply down from 60% at the end of December.
Under CEO Luigi Lovaglio, who has just been reappointed for another three years, MPS in November completed a make-or-break €2.5 billion capital raising which it used in part to send more than 4,000 employees into early retirement.
The bank said its best-quality capital stood at 14.9% of risk weighted assets (RWAs), down from 15.6% at the end of last year, after a revision of internal risk models drove a smaller than anticipated €3.8 billion increase in RWAs in the quarter.
