reports
- Marine Leleux
- Maureen Schuller
- Suvi Platerink Kosonen
Bank Brunch/Monte dei Paschi T2, CaixaBank's preferred senior, Intesa ...
?Italy lowers its ownership in Banca Monte dei Paschi; following significant outperformance we see little room for further performance in T2. ?CaixaBank brings a new 10yr senior preferred bond to the market. ?Intesa back in USD longs, this time in preferred senior
- Marine Leleux
- Maureen Schuller
- Suvi Platerink Kosonen
Bank Brunch/Monte dei Paschi T2, CaixaBank's preferred senior, Intesa ...
?Italy lowers its ownership in Banca Monte dei Paschi; following significant outperformance we see little room for further performance in T2. ?CaixaBank brings a new 10yr senior preferred bond to the market. ?Intesa back in USD longs, this time in preferred senior
- Johann Scholtz
Morningstar | A Good Bank in a Bad Place
Intesa is the best-run bank in Italy, but the weakness of the Italian banking system erodes whatever competitive advantage Intesa may have. The strong share price performance from Italian banks since the beginning of 2017 would suggest that the market is currently less concerned about the risks they face, but we are not convinced. Yes, the banks are reducing nonperforming loans, and yes, we have seen some steps towards regulatory reform, but the key problem remains that some of Intesa’s compet...
- Johann Scholtz
A Good Bank in a Bad Place
Intesa Sanpaolo reported net income of EUR 1.1 billion for the first quarter of 2019. This is below the EUR 1.3 billion it reported for the corresponding quarter in 2018; however, those results were inflated by a EUR 246 million nonrecurring gain on disposal. We were disappointed by the revenue decline year on year, especially the softness in fees. We maintain our no-moat rating and EUR 2.70 fair value estimate. Revenue was under pressure, declining 4% year on year to EUR 4.4 billion if we exclu...
- Johann Scholtz
Morningstar | Fee Income Disappoints in Intesa Sanpaolo's 1Q
Intesa Sanpaolo reported net income of EUR 1.1 billion for the first quarter of 2019. This is below the EUR 1.3 billion it reported for the corresponding quarter in 2018; however, those results were inflated by a EUR 246 million nonrecurring gain on disposal. We were disappointed by the revenue decline year on year, especially the softness in fees. We maintain our no-moat rating and EUR 2.70 fair value estimate. Revenue was under pressure, declining 4% year on year to EUR 4.4 billion if we excl...
- Johann Scholtz
Fee Income Disappoints in Intesa Sanpaolo's 1Q
Intesa Sanpaolo reported net income of EUR 1.1 billion for the first quarter of 2019. This is below the EUR 1.3 billion it reported for the corresponding quarter in 2018; however, those results were inflated by a EUR 246 million nonrecurring gain on disposal. We were disappointed by the revenue decline year on year, especially the softness in fees. We maintain our no-moat rating and EUR 2.70 fair value estimate. Revenue was under pressure, declining 4% year on year to EUR 4.4 billion if we exclu...
- Johann Scholtz
Morningstar | Intesa Sanpaolo Reports Fiscal 2018 Results, Maintains A...
Intesa Sanpaolo reported pretax profits of EUR 4.4 billion for fiscal 2018, an 8% increase compared with the corresponding period in 2017. After updating our model and adjusting for the time value of money, we are increasing our fair value estimate slightly to EUR 2.70 from EUR 2.60 and maintaining our no-moat rating. Intesas's management has previously provided very detailed earnings guidance out toward 2021, with a net income target of EUR 6 billion for fiscal 2021. Our estimate of EUR 5.4 bi...
- Johann Scholtz
Morningstar | ISP Updated Report
Intesa is the best-run bank in Italy, but the weakness of the Italian banking system erodes whatever competitive advantage Intesa may have. The strong share price performance from Italian banks since the beginning of 2017 would suggest that the market is currently less concerned about the risks they face, but we are not convinced. Yes, the banks are reducing nonperforming loans, and yes, we have seen some steps towards regulatory reform, but the key problem remains that some of Intesa’s compet...
- Johann Scholtz
ISP Updated Report
Intesa Sanpaolo reported pretax profits of EUR 1.4 billion for the third quarter of 2018, this represents a 13% increase compared with the corresponding period in 2017. Intesa Sanpaolo CEO Carlo Messina struck a very confident tone during the earnings call, highlighting Intesa’s good growth prospects, profitability, and its strong performance in the European Banking Authority stress tests. He also believes that the fundamentals for the Italian economy remains sound. Messina believes that the m...
- Johann Scholtz
Intesa Sanpaolo Reports Fiscal 2018 Results, Maintains Aggressive Grow...
Intesa Sanpaolo reported pretax profits of EUR 4.4 billion for fiscal 2018, an 8% increase compared with the corresponding period in 2017. After updating our model and adjusting for the time value of money, we are increasing our fair value estimate slightly to EUR 2.70 from EUR 2.60 and maintaining our no-moat rating. Intesas's management has previously provided very detailed earnings guidance out toward 2021, with a net income target of EUR 6 billion for fiscal 2021. Our estimate of EUR 5.4 bil...
- Johann Scholtz
Morningstar | Intesa Sanpaolo's 3Q: CEO Strikes Confident Tone During ...
Intesa Sanpaolo reported pretax profits of EUR 1.4 billion for the third quarter of 2018, this represents a 13% increase compared with the corresponding period in 2017. Intesa Sanpaolo CEO Carlo Messina struck a very confident tone during the earnings call, highlighting Intesa’s good growth prospects, profitability, and its strong performance in the European Banking Authority stress tests. He also believes that the fundamentals for the Italian economy remains sound. Messina believes that the m...
- Johann Scholtz
Intesa Sanpaulo's 3Q 2018: CEO Strikes Confident Tone During Call, but...
Intesa Sanpaulo reported pretax profits of EUR 1.4 billion for the third quarter of 2018, this represents a 13% increase compared with the corresponding period in 2017. Intesa Sanpaulo CEO Carlo Messina struck a very confident tone during the earnings call, highlighting Intesa’s good growth prospects, profitability, and its strong performance in the European Banking Authority stress tests. He also believes that the fundamentals for the Italian economy remains sound. Messina believes that the m...
- Johann Scholtz
Morningstar | Italian Banks: A Greek Tragedy Unfolding?
"'We are not scared of the markets, we are not scared of the spread,' said the Five Star senator Stefano Patuelli outside the meeting." (Financial Times, Sept. 28, 2018). Hubris. Italian sovereign debt yields increased by 0.3% to 3.2%, and Italian banks' share prices declined by 8% on average in morning trade. Nemesis. Future governments having to make painful spending cuts. Catharsis (possible). In May we highlighted the risk to the Italian banking sector posed by the policies of the newly e...
- Johann Scholtz
Italian Banks: A Greek Tragedy Unfolding?
"'We are not scared of the markets, we are not scared of the spread,' said the Five Star senator Stefano Patuelli outside the meeting." (Financial Times, Sept. 28, 2018). Hubris. Italian sovereign debt yields increased by 0.3% to 3.2%, and Italian banks' share prices declined by 8% on average in morning trade. Nemesis. Future governments having to make painful spending cuts. Catharsis (possible). In May we highlighted the risk to the Italian banking sector posed by the policies of the newly el...
- Johann Scholtz
Morningstar | Intesa's Earnings Support From Lower Loan Losses Nearing...
No-moat Intesa Sanpaolo reported net income of EUR 927 million for the second quarter of 2018, far below the EUR 4.4 billion it reported in the corresponding prior-year period. However, the second quarter of 2017 included nonrecurring gains of EUR 3.6 billion. If we restate pretax profits to exclude nonrecurring items, we calculate that Intesa recorded a 10% year-on-year increase in net profits. The reported net income of EUR 927 million was 8% ahead of the EUR 827 million that consensus expecte...
- Johann Scholtz
Intesa's Earnings Support From Lower Loan Losses Nearing End
No-moat Intesa Sanpaolo reported net income of EUR 927 million for the second quarter of 2018, far below the EUR 4.4 billion it reported in the corresponding prior-year period. However, the second quarter of 2017 included nonrecurring gains of EUR 3.6 billion. If we restate pretax profits to exclude nonrecurring items, we calculate that Intesa recorded a 10% year-on-year increase in net profits. The reported net income of EUR 927 million was 8% ahead of the EUR 827 million that consensus expecte...
- Johann Scholtz
Italian Banks: Risk Never Went Away
We update our fair value estimates for Intesa Sanpaulo (increased to EUR 2.60 from EUR 2.30) and UniCredit (decreased to EUR 17 from EUR 19) and maintain our no-moat rating on both banks. Intesa and UniCredit are trading 14% and 11% off their respective one-year highs. The sell-off is in response to the populist coalition between the Five Star Movement and the Northern League set to govern Italy. Our valuation update is not in response to the perceived increase in political risk--we merely enhan...
- Johann Scholtz
Irrational pricing in Italy makes profitability hard to come by.
No-moat Intesa Sanpaolo reported net income of EUR 7.3 billion for 2017, excluding capital items it was EUR 3 billion--slightly ahead of our EUR 2.9 billion estimate. Intesa also released a detailed business plan till 2021, including some ambitious targets, notably a target return on tangible equity of 15%. We caution investors against viewing this as a midcycle level of profitability as we do not believe Intesa's assumption for credit losses is sustainable. It increasingly seems that Intesa did...
Intesa Sanpaolo : Solid fundamentals and consistent strategic plan dwa...
The outcome of Sunday’s general elections in Italy appears uncertain, fuelling widespread speculations. Given the fragmented political landscape and the (untested) electoral system, no clear majority is expected to emerge, leading to a potentially protracted period of negotiations between parties, along with a certain degree of market volatility. Unless a coalition emerges between populist parties (a remote risk though), we do not see this as a major issue for the leading Italian bank with sol...
Intesa Sanpaolo : Solid fundamentals and consistent strategic plan dwa...
The outcome of Sunday’s general elections in Italy appears uncertain, fuelling widespread speculations. Given the fragmented political landscape and the (untested) electoral system, no clear majority is expected to emerge, leading to a potentially protracted period of negotiations between parties, along with a certain degree of market volatility. Unless a coalition emerges between populist parties (a remote risk though), we do not see this as a major issue for the leading Italian bank with sol...
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