Intesa Sanpaolo Earnings: Resilient Performance Despite Peak in Net Interest Income

No-moat Intesa Sanpaolo showed resilience in the face of lower interest rates, reporting net income of EUR 1.5 billion for the fourth quarter of 2024, 6% lower than a year before. Net interest income peaked in the previous quarter, leading to a 2% revenue decline. The fourth quarter traditionally comes with seasonally high operating expenses—this is when Intesa raises its provisions for employee incentives. Operating expenses grew by 3% year on year. Credit quality remains sound with nonperforming loans and loan-loss provisions at record lows. Intesa now expects even higher net profits in 2025 than in 2024 despite the hit from lower interest rates on net interest margins. We believe that growth in fee income and lower operating expenses will have to do the heavy lifting to offset lower net interest income.