ISP Intesa Sanpaolo Spa

ROME—Intesa Sanpaolo said Friday that despite a slide in quarterly profit it would double its dividend on 2015 earnings and boost this year's payout by 25%.

Fourth-quarter net profit for the last three months of last year declined 73% to €13 million ($14.6 million) and was substantially lower than each of the three previous quarters of last year, because of a one-off contribution to a bailout fund set up to rescue four smaller Italian lenders.

In a statement, Intesa Sanpaolo said its net profit would have notched €263 million if the charges for the resolution fund were excluded. Analysts polled by FactSet expected the bank to post a net profit of €70 million.

In December, the bank agreed to pay €380 million to a fund, the so-called Resolution Fund, to rescue four local lenders by increasing their capital to a level equal to 9% of their risk-weighted assets.

Despite Italian banks being under pressure because of souring loans and the fragile domestic economy, Intesa was able to increase dividends because of lower loan-loss provisions, indicating an improving credit trend for the country's biggest lender by branches and growth in commissions from its banking activities.

The Milan-based bank said it plans to pay a €0.14 ordinary dividend and €0.151 savings share for 2015, compared with €0.07 for each ordinary share and €0.081 a savings share for the previous year. The total 2015 dividend payout amounts to €2.4 billion, twice as much as a year earlier.

In November, Chief Executive Carlo Messina had said the bank was able to pay a higher dividend for 2015 than the €2 billion earmarked given the positive results it had achieved.

On Friday, the bank confirmed it expects to payout a total of €3 billion in dividends on 2016 earnings.

Intesa said its fourth-quarter revenue fell 11% to €3.69 billion on the year. The bank added that it forecasts 2016 revenue to be higher than the previous year.

Fees and commissions for the quarter rose by 5.8% to €1.92 billion, compared with the same period a year earlier. The bank said it benefited particularly from an increase in commissions on portfolio management and insurance products.

By contrast, net interest income declined by 5% to €1.98 billion compared with the last quarter of 2014.

The lender said it had set aside €923 million to cover for potential losses on loans, down from €1.04 billion a year earlier. It added that the loan-loss provisions of €3.31 billion for 2015 are the lowest since 2010.

In early afternoon trading, the bank's shares were up 2.3% at €2.54, outperforming Italy's benchmark FTSE MIB Index.

Write to Liam Moloney at liam.moloney@wsj.com and Giovanni Legorano at giovanni.legorano@wsj.com

(END) Dow Jones Newswires

February 05, 2016 10:45 ET (15:45 GMT)

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