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Intesa Sanpaolo Q4 Profit Rises; Unveils 2018-2021 Business Plan

Intesa Sanpaolo Group (ISNPY.PK,IITSF.PK) reported that its net income for the fourth-quarter increased to 1.344 billion euros from 776 million euros last year. The latest-quarter result included a capital gain of 811 million euros deriving from the sale of the Allfunds stake. In addition, the company announced 2018-2021 Business Plan, and cost reduction.

The Board of Directors of Intesa Sanpaolo decided to submit a Long-term Incentive Plan for the approval of shareholders, who will be summoned to the Meeting scheduled for 27 April 2018.

Excluding levies and other charges concerning the banking industry, net income for the fourth-quarter grew to 1.342 billion euros from 1.153 billion euros in the prior year.

Net interest income amounted to 1.742 billion euros, excluding 95 million euros deriving from the Aggregate Set, down 0.3% from last year. Net fee and commission income amounted to 2.095 billion euros, excluding 51 million euros, deriving from the Aggregate Set, up 10.9% from the prior quarter.

The Board of Directors has adopted a proposal, to be submitted at the next Ordinary Shareholders' Meeting, regarding the distribution of 20.3 euro cents on ordinary shares and 21.4 euro cents on savings shares, before tax. The dividend payment, if approved at the Shareholders' Meeting, will take place from 23 May 2018 (with coupon presentation on 21 May and record date on 22 May).

The Board of Directors of Intesa Sanpaolo, at its meeting today, approved the Group's 2018-2021 Business Plan. The Group will continue to create value for all stakeholders, contributing over 300 billion euros to the economy in the four-year period.

Looking ahead for 2021, The bank expects net income of up to 6 billion euros, return on equity of 12.4% and operating income of up to 20.8 billion euros.

It targets around 1.5 billion euros in cost savings in the period 2018-2021; operating costs down to 9.5 billion euros in 2021 from 9.8 billion euros in 2017, despite costs of 0.6 billion euros to support growth in the period 2018-2021.

The company announced agreement with trade unions reached at year-end 2017 concerning a total of 9,000 voluntary exits to be achieved by 30 June 2020, of which around 1,500 departures as at year-end 2017 and 3,300 by year-end 2018, leading to savings in personnel expenses of around 675 million euros per year on a fully operational basis (from 2021).

It is hiring of at least 1,650 professionals to support growth in core businesses and enable generational change; it launches dedicated initiative to reskill at least 5,000 people towards high value-added jobs.

It announced the creation of a new headquarters in Milan ("ISP City") aimed at optimising productivity through centralisation of headquarters into a single location and optimisation of commuting time with the Directional Centre in Turin.

The company announced the reduction of legal entities, preserving brands with significant client traction, with 12 legal entities to be merged into the Parent Company: Banco di Napoli, CR Firenze, CR Pistoia e Lucchesia, CR Veneto, Carisbo, Cariromagna, CR Friuli Venezia Giulia, Banca Nuova, Banca Apulia, Banca IMI, Banca Prossima, Mediocredito Italiano.

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