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.