Italy's Banco BPM lifts 2023 profit goal after strong quarter

By Andrea Mandala

MILAN (Reuters) -Italian bank Banco BPM on Wednesday joined bigger peers in lifting its 2023 net profit goal - the third such upgrade in as many consecutive quarters - as the sector reaps the benefits of higher interest rates.

Italy's third-largest bank said it now expects a full-year net profit of at least of 1.2 billion euros ($1.3 billion), or 80 euro cents per share up from a previous 75 euro cents per share.

Banco BPM said net profit for April-June came in at 359 million euros, above a 335 million analyst consensus compiled by Reuters.

The bank, which currently pays out 50% of profits to investors, said it would update its shareholder reward targets when it presents a new business plan by the end of December.

While it confirmed its 2024 profit guidance on Wednesday, Banco BPM expects to be able to raise it with the plan.

Revenues jumped 18.5% from a year ago, as more profitable margins on lending, despite weak volumes, more than offset a slowdown in fee income amid volatile markets.

Income the bank reaps from the gap in lending and deposit rates topped expectations at 810 million euros, posting a 54% yearly rise, while growing 9% on a quarterly basis.

Banco BPM said the net interest income would yield 3.25 billion euros in the full year, improving a previous 3 billion euro estimate.

Core capital improved to 14.2% of risk-weighted assets in part thanks to a reduction in the latter.($1 = 0.9142 euros)

(Reporting Andrea Mandalà, editing by Valentina Za)