Monte Paschi to pay first dividend in 13 years

Milan — State-owned Italian bank Monte dei Paschi di Siena on Wednesday posted a profit of €1.23bn ($1.32bn) for October-December, hitting in a single quarter its guidance for the full year, and said it will return to pay a dividend.

Bailed out by the state in 2017, Monte dei Paschi (MPS) has been restructuring under CEO Luigi Lovaglio who pulled off a make-or-break capital raise in November 2022.

Revenues, including net fees, strengthened in the fourth quarter compared to the previous one, but the result was mainly boosted by a positive tax effect and the release of funds Monte dei Paschi had set aside to cover possible legal risks.

After positive court rulings in recent months in a number of cases involving the bank, MPS was able to release €466m in provisions against risks.

The lender, which is now 39% owned by the state after the successful placement of a stake on the market in November, said it would pay out €315m as dividends, two years earlier than anticipated and for the first time since 2011.

Shares in MPS rose 5.6% by 10.22 GMT to €3.563 each.

Taking into account the distribution plans, MPS said its core capital amounted to 18% of risk weighted assets, well above that of sector leaders UniCredit (16%) and Intesa Sanpaolo (13%).

Improving on his previous forecast, in November Lovaglio had said net profit will top €1.1bn in the full year.

Analyst polled by the bank had looked for a €1.3bn profit.

Net profit in 2023 instead came in at €2.05bn, as higher rates drove up income from lending by nearly 50% and costs fell after MPS used the money from its latest capital raise to finance costly voluntary staff exits.

Reuters