MILAN, Nov 8 Reuters Stateowned Monte dei Paschi di Siena on Wednesday became the latest Italian bank to surprise markets with strongerthanexpected thirdquarter earnings thanks to a boost from higher rates.

Monte dei Paschi MPS is 64 owned by the state, which is working on reducing its stake in the Tuscan lender in line with reprivatisation commitments taken with the European Union.

Net income in the three months through September came in at 310 million euros 331 million, well above a 238 million euro average forecast in an analyst consensus gathered by the bank.

Income from the gap in lending and deposit rates, or net interest income, rose 60 yearonyear, surpassing analyst forecasts and more than offsetting slightly weaker net fees.

MPS said fees had suffered because of traditionally slower activity in the summer months, but also due to a decision to cut the costs of current accounts.

Highstreet banks in Italy have been able to keep at a minimum the portion of the increase in official rates they pass onto depositors. In many cases the socalled pass through on deposits is below 25.

Several lenders, however, have opted, like MPS, to cut service costs for account holders.

MPS said its core capital ratio had strengthened further in the quarter to 16.7, above expectations and up from 15.9 at the end of June.

1 0.9363 euros

Reporting by Valentina Za; editing by Robert Birsel

Source Reuters