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Introduction & Market Context
Intesa Sanpaolo (BIT:ISP) reported its first quarter 2025 results on May 6, showcasing record-breaking performance with net income reaching €2.6 billion, up 14% compared to the same period last year. The Italian banking giant’s shares traded down 1.1% at €4.75 following the presentation, despite the strong results and confirmation of its full-year guidance.
The bank’s presentation highlighted its continued focus on wealth management, technology transformation, and shareholder returns, with plans to distribute €5.8 billion through dividends and share buybacks in the coming months.
Quarterly Performance Highlights
Intesa Sanpaolo delivered what it called "an excellent start to the year" with its best-ever quarterly net income of €2.6 billion. This performance was driven by strong growth in commissions and insurance income, which helped offset the impact of declining interest rates on net interest income.
As shown in the following chart of quarterly net income history, the Q1 2025 result continues a strong upward trajectory that has been building since 2021:
The bank’s operating income reached €6.8 billion in Q1 2025, with net fees and commissions growing 7% year-over-year to €2.4 billion. Insurance income also performed strongly, increasing 9% compared to Q4 2024 to reach €462 million, marking the best quarter ever for this segment.
The following slide details the components of the bank’s profit and loss statement:
Net interest income declined to €3.6 billion, down from €3.9 billion in Q1 2024, reflecting the impact of lower interest rates. However, the bank’s diversified business model helped mitigate this decline, with strong performance in wealth management and insurance activities.
Detailed Financial Analysis
Intesa Sanpaolo continued to demonstrate best-in-class efficiency, with its cost-to-income ratio improving to 38.0%, the lowest ever for the bank and significantly better than the European peer average of 52.4%. Operating costs decreased by 0.5% year-over-year to €2.6 billion, despite ongoing investments in technology.
The bank’s asset quality remained strong, with non-performing loans (NPLs) at historical lows. The net NPL ratio stood at 1.0%, while NPL stock decreased to €9.9 billion, down from €10.1 billion in March 2024.
The following slide illustrates the bank’s NPL trends:
Intesa Sanpaolo’s capital position strengthened during the quarter, with the fully phased-in CET1 ratio increasing by approximately 45 basis points to reach 13.3%. This solid capital base supports the bank’s ambitious shareholder return plans while maintaining a buffer well above regulatory requirements.
Strategic Initiatives
Technology transformation remains a key strategic focus for Intesa Sanpaolo. The bank has already deployed €4.4 billion in IT investments and hired approximately 2,350 IT specialists as part of its ISYTECH initiative. Currently, 62% of applications are cloud-based, up from just 10% in 2021.
The following slide details the bank’s technology transformation efforts:
This digital transformation is enabling significant efficiency gains, with the bank reducing headcount by approximately 3,100 on a yearly basis, including about 2,900 in Q1 2025 alone. The bank plans to achieve 9,000 exits at no social cost by 2027, generating approximately €500 million in savings at run-rate.
Customer financial assets grew to approximately €1.4 trillion, an increase of €45 billion compared to March 2024. This growth is fueling the bank’s wealth management, protection, and advisory businesses, which are key drivers of fee income.
Shareholder Returns
Intesa Sanpaolo continues to deliver strong returns to shareholders, with €1.8 billion in cash dividends accrued in Q1 2025. The bank plans to pay €3.0 billion in cash dividends in May 2025 and launch a €2.0 billion share buyback program in June 2025.
The following slide highlights the bank’s value creation and distribution metrics:
With a dividend yield of approximately 8%, Intesa Sanpaolo offers one of the most attractive shareholder return profiles in the European banking sector. The bank maintains a 70% cash payout ratio and has indicated that additional distribution for 2025 will be quantified when full-year results are approved.
Forward-Looking Statements
Intesa Sanpaolo confirmed its 2025 net income guidance at "well above €9 billion," maintaining a positive outlook despite the challenging interest rate environment. The bank expects its fully phased-in CET1 ratio to exceed 13.7% by the end of 2025, not including an additional approximately 100 basis points benefit from DTA absorption after 2025.
As illustrated in the following slide, the bank remains confident in its ability to deliver on its financial targets:
The bank’s well-diversified business model, with strong contributions from wealth management and insurance, positions it to succeed in various economic scenarios. The continued focus on technology transformation and cost efficiency is expected to further enhance profitability and shareholder returns in the coming years.
Intesa Sanpaolo’s performance highlights its position as one of Europe’s strongest banking institutions, with best-in-class profitability, efficiency, and capital generation capabilities supporting sustainable value creation for all stakeholders.
Full presentation:
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