Intesa to Close Branches, Cut Costs as Part of Plan, FT SaysBy and
Intesa Sanpaolo SpA’s new strategy may include measures to cut costs and close branches, the Financial Times reported on Monday, citing people briefed on Chief Executive Officer Carlo Messina’s discussions with investors.
Intesa may cut its 3,000 branch network by as much as a third as part of its new business plan, which is also expected to include measures to shrink the lender’s cost base by “hundreds of millions of euros,” the FT reported. The bank will present the plan with its annual results early next year, it said.
A spokesman for the Milan-based bank declined to comment on the report. Intesa fell 2.7 percent to 2.55 euros at 3:28 p.m. in Milan, giving the company a market value of about 43 billion euros ($48 billion).
The lender may outline “aggressive plans” to raise the market share of its Italian general insurance business, while boosting its fund management activities by a quarter by adding 100 billion euros of assets, the FT reported.
After scrapping a possible bid earlier this year for Assicurazioni Generali SpA, Italy’s biggest insurer, the lender is concentrating on ways to create and distribute value organically. Messina plans to expand in insurance and in private and investment banking to bolster revenue with fees from these businesses.
“Intesa intends to significantly boost results, acting both on costs and revenue, while at the same time reducing risks,” said Wolfram Mrowetz, CEO of Italian broker Alisei SIM.
Net income rose to 901 million euros in the first quarter, driven by revenue from fees and commissions, the bank reported May 5th. Messina said at the time that the improved results came from the repositioning of the bank’s business around wealth management -- a move similar to that made by Swiss rivals Credit Suisse Group AG and UBS Group AG.