MILAN (Reuters) – Italy’s biggest bank Intesa Sanpaolo on Friday cut its profit guidance for the year after setting aside 0.8 billion euros ($847 million) to cover potential losses from its exposure to Russia.
Intesa said it now expected net profit of more than 4 billion euros in 2022, compared with an estimate of more than 5 billion euros it provided in early February before Russia’s invasion of Ukraine.
It otherwise stuck to profit and payout goals it had set then under a new plan through 2025.
Were it to further raise provisions on Russia and Ukraine to cover 40% of its exposure, the full-year net income would stand above 3 billion euros, it said.
Shares turned negative after the results and were down 1% by 1119 GMT.
Strong trading gains drove first quarter net income to 1.02 billion euros for January-March, well above an average estimate of 709.4 million euros in a Reuters poll of eight analysts.
Intesa said its cross-border exposure towards Russia before the provisions it had booked in the quarter stood at 3.9 billion euros, net of guarantees from export credit agencies.
Local units Banca Intesa Russia and Ukraine’s Pravex Bank are exposed for a further 1.1 billion euros.
When also including off-balance sheet items, such as for example untapped credit lines, the overall exposure net of guarantees stands at 6.1 billion euros. ($1 = 0.9441 euros)
(Reporting by Valentina Za; Editing by Keith Weir)
