Banca Monte dei Paschi di Siena, the Italian bank, has announced a net profit of €309.6 million ($331.3 million) for the third quarter. This marks a significant turnaround compared to a loss of €387 million in the same period last year. The bank’s revenue also saw substantial growth, increasing by 31% to reach €953 million.
Increase in Net Interest Income
One of the primary contributors to Banca Monte dei Paschi di Siena’s positive performance was the rise in net interest income. This figure, which represents the difference between what the bank earns from loans and the cost of deposits, amounted to €605 million for the reporting period. This represents a substantial 60% increase.
Decline in Net Fee and Commission Income
However, the bank did experience a decline in net fee and commission income, which fell by 3.1% to €316.6 million. This decrease can be attributed to reduced fees on current accounts and a decline in traditional banking service commissions.
Improved Loan-Loss Provisions and Operating Expenses
Banca Monte dei Paschi di Siena also reported a reduction in loan-loss provisions, falling from €320 million to €307 million compared to the previous year. Additionally, operating expenses decreased from €527 million to €444 million.
Proposed Allocation of Non-Distributable Reserve Fund
As part of the Italian government’s windfall tax on banks, the bank plans to propose an allocation of €313 million into a non-distributable reserve fund to its shareholders.