Italy's Banco BPM beats profit forecast ahead of a strategy update

MILANO, Nov 7 (Reuters) - Italy’s Banco BPM on Tuesday joined bigger rivals in posting a higher-than-expected profit for the third quarter, and strengthened its yearly outlook, adding it would give detailed guidance on Dec. 12.

Italy’s No.3 bank will present a new strategy next month, setting goals for profit and shareholder rewards.

It currently pays out 50% of profits to investors, which compares with top bank Intesa Sanpaolo’s 70% cash payout. UniCredit, Italy’s no.2 bank, has a 30% dividend payout and favours share buyback which have seen it distribute roughly 100% of profits in the last two years.

In three months through September, Banco BPM’s net profit came in at 319 million euros, versus 136 million a year ago, well above a 285 million analyst consensus compiled by Reuters.

Banks have benefited from higher rates, which have more than offset declining net fees.

Banco BPM said it now expected full-year net profit above 1.2 billion euros, slightly improving a previous guidance of “at least” 1.2 billion.

In line with Intesa and UniCredit, Banco BPM said it had opted to increase non-distributable reserves by 378 billion euros, instead of paying a one-off windfall tax Italy imposed in August on bank profits. (Reporting by Andrea Mandalà, editing by Valentina Za)