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MILAN (AP) — Italian bank Intesa SanPaolo says its second-quarter profit dipped as it moved ahead with integrating two local banks it had helped rescue.
Italy's second-largest bank by assets said Tuesday that net income dropped 7 percent to 837 million euros ($988 million) in the three months through June, compared with 901 million euros a year earlier.
Net fees and commission income and interest income were flat at around 1.8 billion euros. The impact of lower interest rates, which tend to weigh on a bank's earnings, was offset by higher business volumes and spreads. Trading profit dipped 22 percent to 365 million euros.
The bank's core Tier 1 capital ratio, a key measure of the bank's strength, was 13 percent.
The net profit figure excludes a 3.5 billion euro cash injection from a government fund for taking over the good assets of two failing banks in the northeast Veneto region, aimed at protecting Intesa San Paolo's capital ratio.
"Intesa Sanpaolo's intervention ensures the security of about 50 billion euros in savings held by the two banks," CEO Carlo Messina said.
Since the two banks, Banca Popolare di Vicenza and Veneto Banca, joined the Intesa group, Messina said they have reached a deal to cut 4,000 jobs on a voluntary basis. Intesa also intends to reduce the number of branches with other cost-cutting measures.
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