February 6, 2020 / 3:55 PM / 20 days ago

Italy's Creval on track for return on dividend, shares jump

MILAN, Feb 6 (Reuters) - Creval is well on track to reach its 2020-2021 financial targets, allowing the Italian mid-sized bank to return to paying a dividend next year, CEO Luigi Lovaglio said on Thursday.

The lender based in Valtellina valley, north of Milan, on Thursday reported a better than expected rise in 2019 net profit, sending its shares up 10%.

Under a five-year plan unveiled last year Creval aimed to streamline its business and shed its risky assets with a target to roughly halve its gross bad loan burden to below 6.5% of total lending by 2023.

“We trust we’re well on track to deliver important targets for 2020-2021 when the bank is expected to start, once again, paying out dividend on 2020 income,” Lovaglio said.

Creval paid its last dividend in 2016.

The bank also announced on Thursday a deal for the sale of a 357 million-euro portfolio of bad loans, lowering the proportion of soured debts in its total lending to 9.4% from 11.3% at the end of September.

The sale is part of a planned 800 million-euro disposal of bad loans and has no impact on the bank’s profit as it has already written down the asset to be sold, Lovaglio said.

Italian broker Equita said that the fourth-quarter results “are significantly higher than expected” thanks to a good performance of interest income and cost control. (Reporting by Andrea Mandalà Editing by Peter Graff)

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