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Intesa Sanpaolo Q2 Profit Up 31%; Enters Into Deal With Prelios On UTP Loans

Intesa Sanpaolo Group (ISNPY.PK,IITSF.PK) Wednesday reported second-quarter net income of 1.22 billion euros, up 31 percent from 927 million euros in the year-ago period.

However, second-quarter net interest income declined 4.2 percent to 1.76 billion euros from 1.84 billion euros in the prior-year quarter. Net fee and commission income was 1.99 billion euros, down from 2.02 billion euros in the prior year.

Looking ahead to 2019, the Group expects its net income to grow compared with 2018 as a result of growth in revenues, continuous reduction in operating costs and decrease in the cost of risk.

The Group said its dividend policy for 2019 envisages the distribution of cash dividends corresponding to a payout ratio of 80 percent of net income.

In a separate statement, Intesa Sanpaolo said it reached a binding agreement to form a strategic partnership with Prelios in respect of loans classified as unlikely to pay or UTP.

The agreement reached with a Prelios, a player in the UTP segment, adds to the strategic partnership with Intrum in respect of bad loans finalized in 2018. It will enable Intesa Sanpaolo to focus on the proactive credit management of early delinquency loan portfolio.

The agreement with Prelios consists of two transactions. This includes a 10-year contract for the servicing of UTP Corporate and SME loans of the Intesa Sanpaolo Group to be provided by Prelios, initially covering a portfolio worth around 6.7 billion euros of gross book value.

In also includes the disposal and securitisation of a portfolio of UTP Corporate and SME loans of the Intesa Sanpaolo Group worth around 3 billion euros of gross book value, at a price of around 2 billion euros, which is in line with the carrying value.

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