Intesa Sanpaolo Earnings: In Contrast to Peers, Guidance Is for Higher Net Interest Income

No-moat Intesa Sanpaolo reported a net profit of EUR 7.7 billion for fiscal 2023, slightly below our EUR 7.9 billion estimate, with wage inflation driving operating expense growth ahead of our expectations. Intesa slightly increased its net profit guidance for 2024 and 2025, and guidance is also slightly ahead of our expectations. Management came across as confident that it can keep growing net interest income. In sharp contrast to some of its peers, Intesa believes it can keep a lid on the cost of deposits while its hedging program will also shelter it from the initial expected decrease in interest rates. Even in the event of a sharp decline in interest rates, Intesa believes it can make up for lower net interest income by migrating deposits into its asset-management and life insurance operations.