Italian bank profit fall to slow in 2009-Moody's

MILAN, July 3 (Reuters) - Italian bank profits will fall again in 2009 but less than in the previous year when results were strongly penalised by trading losses, Moody's Senior Vice President Henry MacNevin said on Friday.

He was speaking at the end of a presentation on a Moody's report on Italian banks. On Thursday the agency maintained a negative outlook for the Italian banking system.

"In 2009 I see a rather modest cut in profits because already in 2008 the banks have lost a lot because of the strong impact of trading losses, MacNevin said.

"In 2009 the results from trading will be modest, probably positive," and not therefore as bad as in 2008, he said.

Italian banks will benefit in comparison with European competitors because of their more traditional activities, their focus in recent years on consolidation, and remaining less exposed to risky activities, he said.

The weak economic trend is the main factor hitting profits while Italy wins some support from a more stable real estate market, he said, citing a 4.4 percent fall in 2009 GDP and a 10 percent fall in real estate prices.

Banks' fixed costs, such as the cost of labour, remain a problem where Italy could do a lot, he said, noting how Intesa Sanpaolo (ISP.MI: Quote, Profile, Research) has done "rather well" on this front.

On consolidation in the sector, he said there is possible scope for this, particularly for smaller banks.

"For now the situation is stalled. But there is space for a further consolidation... above all in the regional bank sector," he said, ruling out foreign interest.