MILAN, Feb 2 (Reuters) - Italy's biggest bank Intesa Sanpaolo on Monday said it would grow its net income to around 10 billion euros ($12 billion) in 2026 after beating profit forecasts in the fourth
Intesa Sanpaolo Aims for 25% Profit Growth and €50 Billion Investor Return
Intesa Sanpaolo's Strategic Plans for Profit and Growth
By Valentina Za
Cost Reduction and Workforce Changes
MILAN, Feb 2 (Reuters) - Italy's biggest bank Intesa Sanpaolo on Monday pledged to grow its net profit by almost a quarter by 2029, to more than 11.5 billion euros ($13.6 billion), and to return around 50 billion euros to investors during the period.
Wealth Management Expansion in Europe
Intesa outlined a new 2026-2029 strategy centred on falling costs and fee-driven revenue growth of 3% a year on average.
Dividend and Share Buyback Plans
"To my knowledge we are the only large European bank with a business plan delivering cost reduction," Chief Executive Carlo Messina told analysts.
An ageing workforce will lead to around 12,000 staff exiting the group by 2029, Messina said, adding young hires would replace half the figure, reducing personnel costs.
Further savings will stem from growing digitisation of services. Intesa, which targets a return on equity above 20% in 2029 from 18% in 2025, has been working to shift its core IT infrastructure onto the cloud to drive digitisation.
WEALTH MANAGEMENT IN FRANCE, GERMANY, SPAIN
The lender faces antitrust curbs to further expansion in Italy after a 2020 domestic takeover and kept out of last year's wave of banking sector consolidation.
It said it would add 1,200 financial advisers to its foreign subsidiaries and invest 200 million euros to start offering wealth management services to clients in France, Germany and Spain - where it has branches but no local unit.
The first Italian bank to report full-year earnings, Intesa posted a slightly higher than expected net profit of 9.3 billion euros for 2025 and guided for a net income of around 10 billion euros this year.
The bank said it would pay out 6.5 billion euros of last year's profit as cash dividends, and use 2.3 billion euros to buy back its own shares starting from July.
Under its new strategy, Intesa plans to pay out 95% of profit each year in 2026-2029, hiking its cash dividend payout ratio to 75% from 70% and using the rest for share buybacks.
It will assess further distribution each year from 2027, it said.
European banks have seen their valuations surge in recent years as higher interest rates drove record profits which they have used to reward investors through dividends and buybacks.
Intesa said it aimed to lower costs to 36.8% of income in 2029 from 42.2% in 2025, while investing around 5 billion euros in technology over the period.
($1 = 0.8441 euros)
(Reporting by Valentina Za; Editing by Cristina Carlevaro, Kirsten Donovan and Emelia Sithole-Matarise)
