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Intesa Sanpaolo ADR ISNPY

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Intesa Sanpaolo Fourth-Quarter 2020: Playing Catch-Up on Loan-Loss Provisions

Johann Scholtz, CFA Equity Analyst

Analyst Note

| Johann Scholtz, CFA |

No-moat Intesa Sanpaolo reported a net loss of EUR 902 million for fourth-quarter 2020, compared with the EUR 872 million profit it booked a year ago for the final quarter. Intesa did, however, take a EUR 912 million goodwill impairment hit in the final quarter, excluding it would have eked out a small profit. While a surge in loan-loss provisions explain the bulk of the substantial decline in profitability, it is a bit concerning that Intesa saw its quarterly preprovision profit number dip by 13% year on year, with revenue declining by 7% year on year. Intesa will, however, rightly point out that the decline in revenue was largely the result of volatile trading revenue collapsing, recurring revenue from margin income, and fees and the insurance business being broadly flat for the quarter. We maintain our EUR 2.10 per-share share fair value estimate and our no moat rating.

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Company Profile

Business Description

Intesa Sanpaolo is an Italian banking group resulting from the merger of Banca Intesa and Sanpaolo IMI, based in Turin. It has clear leadership in the Italian market and a minor but growing international presence focused on Central and Eastern Europe, the Middle East, and North Africa.

Piazza San Carlo, 156
Torino, 10121, Italy
T +39 115551
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 106,107