The Italian banking group’s net income during the first nine months of 2020 was its second highest in 12 years, although sales of its structured certificates were down 38% year-on-year.

Intesa Sanpaolo has reported net income of €3.1 billion (US3.6 billion) for the first nine months of 2020. It was the group’s second best nine-month net income since 2008, already exceeding the around €3 billion minimum net income target for FY2020.

The group maintained a ‘solid’ capital position, with capital ratios well above regulatory requirements. As of 30 September 2020, after the deduction from capital of around €2.3 billion of dividends accrued during the period, the pro-forma fully loaded common equity tier 1 ratio came in at 15.2%.

The IMI corporate & investment banking division, which includes the global markets & investment banking business, recorded an operating income of €3.5 billion, up 11.3% versus €3.1 billion reported during the same period of 2019, contributing approximately 26% of the consolidated operating income (23% in the first nine months of 2019).

Intesa Sanpaolo was the number one issuer group in Italy in the first nine months of 2020, with a 38% share of the market, ahead of Unicredit (22.5%) and BNP Paribas (8.5%), according to SRP data.

Despite being the top provider, the group’s sales from structured products, at €3.9 billion (from 99 certificates, excluding flow and leverage products), were down 38.2% compared to the same period of 2019, when €6.4 billion was collected from 108 products.

Fully capital-protected products collected the bulk of Intesa’s volumes and included a Max Long Cap Certificate on the Eurostoxx Select Dividend 30 Index, which, with sales of €291m, was its best-selling structure during the first nine months of 2020. The index, which tracks high-dividend-yielding companies across 11 Eurozone countries, was the most popular underlying in the period, accumulating combined sales of €977m from 13 products.

The Eurostoxx 50 index was also in demand (€720m from 14 products), as was the iStoxx Europe 600 ESG-X NR Decrement 4.75% (€254m from 2 products), while Netflix was the preferred share (€160m from one product). The latter was seen in a five-year Standard Long Autocallable Memory Certificate that was issued on the paper of Banca IMI and distributed via Deutsche Bank.

The bank’s best-performer during the period was a Standard Long Barrier Quanto Certificate on the S&P GSCI Crude Oil ER Index. The capital-at-risk product, which sold €3.4m at inception, matured in January 2020 and investors received a return of 109% of the nominal invested.

Assets under management amounted to €356 billion, down 0.5% on year-end 2019 and up 1.3% on 30 September 2019.

Profits on financial assets and liabilities at fair value amounted to €1.4 billion, compared with €1.6 billion during the first nine months of 2019. Contributions from customers decreased from €395m to €332m, those from capital markets from €159m to €108m, those from trading and treasury from €989m to €957m, and those from structured credit products recorded a negative balance of €19m versus a positive balance of €28m.

Medium/long-term wholesale funding was €5.9 billion and included benchmark transactions of senior bonds of GBP350m and €1.25 billion and Additional Tier 1 of €3 billion (around 85% were placed with foreign investors). Retail funding, at €369 billion, represents 80% of the group’s funding mix, and includes €340 billion current accounts and deposits; €7 billion senior bonds; €3 billion subordinated liabilities (placed with private banking clients); and €19 billion other deposits (including certificates).

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