The lender forecasts net income of 603 million euros ($874 million) in 2013 and 930 million euros in 2015, compared with 308 million euros last year, the Verona-based bank said today in a statement. Popolare plans to sell properties for about 500 million euros, eliminate 1,120 jobs and close 180 branches.
Chief Executive Officer Pier Francesco Saviotti is cutting costs and selling non-strategic assets to recover from losses linked to the company’s Italease unit. The bank sold 2 billion euros in shares through a rights offer earlier this year before a second round of stress tests.
Saviotti said he is “absolutely tranquil” about the stress tests. “Data show that the core tier 1 minimum level of 5 percent under stress is amply exceeded,” he said during the plan’s presentation in Milan. The CEO ruled out a new capital increase to raise money.
Banco Popolare rose as much as 3.8 percent today in Milan trading and was up 2.4 percent at 1.56 euros at 3 p.m. local time, giving the company a market value of 2.8 billion euros.
Banco Popolare expects its common equity ratio, a measure of financial strength under Basel III rules, to be 7.6 percent in 2013 and 8.3 percent in 2015. The lender targets a dividend payout of 40 percent a year over the period.
“The targets are in line with expectations,” Giovanni Razzoli, an analyst at Equita Sim SPA who has a “buy” recommendation on the stock, wrote in a note today.
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