MILAN (AP) -- Italian bank Intesa SanPaolo says first-quarter earnings fell 62 percent due to lower interest income and higher loan losses.
The bank reported Tuesday a net income of 306 million euros ($397 million) in the first quarter, down from 804 million euros last year. Still, the bank's shares rose 2.2 percent to 1.42 euros as the bank's performance was an improvement on the fourth quarter's loss of 83 million euros.
CEO Enrico Cucchiani said the bank maintained an "extraordinary" cash buffer of 20 billion euros due to the "magnified uncertainties on the horizon," notably the financial crisis in Cyprus and political uncertainty in Italy. The accumulation of the capital reserves was a reason for weaker interest income, which dropped 19 percent to 2 billion euros from 2.5 billion euros a year earlier. Overall, revenues fell 14 percent to 4.1 billion euros.
"With the benefit of hindsight, we might consider our approach conservative and costly," the CEO said. "We believe, however, that the cost of being unprepared could have been much, much higher for all stakeholders."
Provisions for bad loans rose to 1.17 billion euros from 973 million euros a year ago.
The bank said its Core Tier 1 ratio, a key measure of a bank's health, had risen to 11.3 percent.