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UPDATE 1-BPER Banca third-quarter profit beats forecasts on revenue rise

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MILAN, Nov 4 (Reuters) - Italy’s BPER Banca reported a smaller-than-expected drop in net profit for the third quarter on Wednesday, with an improvement in core revenue and a fall in bad loan provisions.

BPER, Italy’s fifth-largest bank, said net profit for the quarter was 96 million euros ($112 million), down from 422 million in the same period last year, which included a 350 million euro boost from its acquisition of Unipol Banca.

Analysts surveyed by Reuters had forecast on average a third quarter net profit of 53 million euros.

But a rebound in fees from the second quarter, when Italy had a prolonged lockdown to stem the spread of COVID-19, boosted revenues by 3% from the previous quarter to 643 million euros.

Net interest income, a measure of how much money a bank makes from its core retail business, was at 325.5 million euros, up by 3% year-on-year and 4.9% higher than the previous quarter.

BPER wrote down problem loans totalling 107.7 million euros, more than 30% less than in the previous quarter and than in the third quarter of last year.

In the first half, the bank booked some 90 million euros in additional provisions related to the COVID-19 pandemic.

The bank, based in the northern Emilia Romagna region, agreed this year to buy 532 branches after Intesa Sanpaolo’s takeover of its smaller rival UBI Banca in a deal that delivered a significant growth in scale.

BPER, which completed a 802 million euro capital increase last month to finance the purchase, said its pro-forma, fully loaded core capital ratio was 13.03% at the end of September, up from 12.57% at the end of June. ($1 = 0.8535 euros) (Reporting by Andrea Mandalà; Editing by Alexander Smith)

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