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Intesa Sanpaolo Q3 profits down 21 percent

Tuesday - 11/13/2012, 1:11pm  ET

MILAN (AP) -- Italian bank Intesa Sanpaolo SpA on Tuesday reported third-quarter profits fell 21 percent due higher taxes and higher provisions for bad loans.

The bank reported net income of EUR414 million (EUR525 million) for the quarter that ended Sept. 30, down from EUR527 million a year earlier.

The bank says it paid EUR454 million in taxes, including extraordinary taxes relating to subsidiaries in Slovakia and Hungary. Interest income was down slightly while fees and commissions were flat.

Intesa, Italy's second-largest bank by assets, set aside EUR1.2 billion in loan loss provisions in the third quarter. That brought its provisions for the first nine months of the year to EUR3.3 billion, up nearly 50 percent on the year.

"This refects the challenging market environment and confirms our prudent policies," CEO Enrico Cucchiani told analysts.

The bank said its exposure to the U.S. subprime mortgage market was only EUR12 million. Exposure to Greek bonds totaled EUR12 million, while that to Irish bonds was EUR132 million and to Portuguese ones EUR285 million.

Intesa's Core Tier 1 ratio, a measure of a bank's health, was 11.1 percent, above European requirements of 9 percent.

The bank's share price was up 2.93 percent to EUR1.229.

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