Italian Bank Earnings To Drop 45% Q/Q: Societe Generale

Italian banks are expected to post aggregate earnings of €457 million this quarter, down 45 percent from Q1 according to Carlos Tommaselli and Dominic Watt at Societe Generale SA (OTCMKTS:SCGLY), though the sector is still doing considerably better than last year when Italian banks posted an aggregate loss of €1 billion.

Italian banks continue to go through the deleveraging process, and total loans are expected to drop slightly, about 0.4 percent from last quarter, though Tommaselli expects a slight improvement in the top line. He also notes that cost of funding has dropped, improving margins and slightly offsetting losses due to deleveraging, and that core revenue has proven...