Monte dei Paschi beats third-quarter earnings estimates, adds capital, according to Investing.com

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Italian state bank Banco Siena (MPS) reported stronger-than-expected third-quarter earnings on Wednesday, driven by rising interest rates. The bank, 64% state-owned, is reducing its stake in line with re-privatization commitments made with the European Union.

Net profit for the quarter ended in September was 310 million euros ($331 million), significantly higher than the average analyst consensus forecast of 238 million euros compiled by the bank.

The bank’s net interest income, the difference between lending rates and deposit rates, rose 60% from a year earlier. The increase beat analysts’ expectations and offset a slight decline in net expenses. MPS attributed the lower fees to a slowdown in traditional summer activity and the decision to reduce current account costs.

Italy’s high street banks have largely tried to limit the portion of official rate increases that are passed on to savers, typically keeping the so-called deposit transfer rate below 25%. Some lenders, including MPS, have chosen to reduce the cost of servicing account holders.

The bank also reported that its core capital ratio continued to rise to 16.7% in the quarter, up from 15.9% at the end of June, an improvement that exceeded market expectations.

Stronger-than-expected earnings and capital ratios are positive indicators for MPS as it continues its efforts to reduce state ownership and meet its commitments to the European Union.

More information about InvestingPro

InvestingPro data takes a deeper dive into Monte dei Paschi di Siena (MPS)’s financials, revealing that the bank has a market capitalization of $3,479.19 million. The bank has a P/E ratio of 6.01, indicating a low price relative to earnings. Additionally, MPS’s revenue grew an impressive 10.87% over the trailing twelve months ended Q2 2023.

Two of InvestingPro’s key recommendations that are consistent with the bank’s current financial situation include accelerating revenue growth and expected net profit growth this year. Those tips resonated with the bank’s recent third-quarter earnings report, which beat analysts’ expectations due to rising interest rates.

For those interested in a more comprehensive analysis, InvestingPro offers many additional tips and real-time data indicators.

Reuters contributed to this article.

This article was created and translated with the help of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.

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