MILAN, Aug 4 (Reuters) – State-owned Monte dei Paschi di Siena (BMPS.MI) on Friday became the latest Italian bank to post above-forecast earnings for the second quarter as higher rates boost profits for the industry.

Monte dei Paschi (MPS) said net income for April-June stood at 383 million euros ($420 million), more than 10 times the figure of a year ago and sharply above a 217 million euro consensus estimate provided by the bank.

Revenues jumped 11% on a quarterly basis to 972 million euros, well ahead of the expected 880 million euros, with net interest income nearly doubling from last year and up 15% from the first quarter.

Net fees also edged higher from the previous quarter, while MPS managed to reduce costs despite galloping inflation lowering its cost-to-income ratio to 49% at the end of June, versus 69% a year before.

The bank said it had finalised on Thursday the sale of 230 million euros in bad debts so that gross problem loans amounted to 4% of the total, from 4.2% at the end of December.

After pulling off a 2.5-billion-euro capital raise in tough markets last November, CEO Luigi Lovaglio has been working to shed staff and cut costs, while still driving revenues higher, to prepare the eventual sale of the state’s 64% stake in MPS.

($1 = 0.9129 euros)

Reporting by Valentina Za, editing by Alvise Armellini

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