Investing.com -- Shares in Italian lender Intesa Sanpaolo fell nearly 1% in Milan after its third-quarter revenue of €6.92 billion missed the €7 billion analysts expected.
The bank also raised its 2026 net income outlook to "well above" €10 billion, and third-quarter profit edged past expectations on lower loan-loss provisions.
Profits on financial assets and liabilities at fair value swung to a loss of €27 million from a gain of €400 million in the second quarter. That included a loss of €144 million from capital markets versus a gain of €222 million.
Revenue, measured as operating income, was down 6.2% from €7.38 billion in the second quarter.
Operating income at the investment banking division fell 25.9% from the second quarter, and its net income was €340 million versus €691 million in the second quarter.
Net income was €2.65 billion, versus €2.79 billion in the second quarter and €2.37 billion a year earlier. Analysts had expected earnings of €0.15 per share.
Loan adjustments, the charges for loans that may go bad, fell to €206 million from €258 million in the second quarter.
Provisions and impairment charges on other assets were €13 million versus €122 million in the second quarter.
Net interest income, the gap between what the bank earns on loans and what it pays on deposits, rose 1.1% to €3.89 billion from the second quarter and 5.6% from a year earlier.
Fee income fell 1.1% to €2.59 billion from the second quarter, with securities dealing and placement commissions down 14.9% over the same period.
Operating costs were €2.65 billion, in line with the second quarter.
For 2026, Intesa expects net interest income of "well above" €15 billion, with a "significant increase" in 2027. It forecast stable costs and a "significant reduction" in provisions, alongside a higher tax rate from Italy's 2026 budget law and higher bank levies.
The board approved an interim dividend of €0.22 per share, or €3.81 billion, payable on Nov. 25, a 3.7% yield. Intesa also completed a €2.30 billion share buyback in October and plans to pay out 95% of 2026 net income, 75% as cash dividends and 20% through buybacks.
The Common Equity Tier 1 ratio, a gauge of financial strength, was 13.1% after deducting €7.80 billion set aside for shareholder payouts, versus 13.2% at the end of 2025.
Bad loans rose to €1.15 billion from €790 million at the end of 2025, and the share of them covered by provisions fell to 63% from 67.3% at the end of 2025.
Net income for the first nine months was €8.20 billion, up 8.1% from a year earlier.
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