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Q1 net profit 332.7 mln euros vs forecast 281 mln euros

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To pay first dividend since 2011, two years ahead of plan

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To update medium-term targets alongside Q2 results

(Recasts with CEO quotes, guidance, shares)

By Alberto Chiumento

May 7 (Reuters) - Italy's Banca Monte dei Paschi (MPS)

beat first-quarter net profit forecasts on Tuesday,

helped by higher revenue, and said it would update its

medium-term targets next quarter as its recovery is running

ahead of plan.

The bank, which had to be bailed out by the Italian state in

2017 and secured a make-or-break capital increase in November

2022, will pay a dividend of 0.25 euro per share this month, its

first since 2011 and two years earlier than anticipated.

"We started (2024) with a very good pace," CEO Luigi

Lovaglio said in a call conference after the results.

MPS's first-quarter net profit surged 41.2% year-on-year to

332.7 million euros ($358.2 million), well above a

company-provided consensus of 281 million euros.

Total revenue rose 15.2% to 1.01 billion euros, mainly

driven by a 10.1% increase in net fees, including wealth

management and advisory fees.

"The trend in total revenue in Q1 is the result of the

bank's ongoing commercial revamping strategy", said Nicola De

Caro, Senior Vice President, European Financial Institution

Ratings at Morningstar DBRS.

Lovaglio confirmed guidance for 2024 pretax profit to exceed

1.3 billion euros, the result reported last year adjusted for

the release of legal risks provisions.

He said the bank would update medium-term targets during its

second-quarter results presentation, adding MPS was ahead of its

business plan goals to 2026.

MPS shares, up 51.4% so far this year as of Monday's close,

were 0.1% higher at 0915 GMT.

After rescuing MPS in 2017 and taking a 68%, Italy's

Treasury has recently cut its holding to 26.7% through two

market placements, raising around 1.57 billion euros.

The sales are in line with commitments agreed during the

2017 bailout with European Union authorities, which require Rome

to re-privatise the lender.

MPS's coverage of non-performing loans stood at 49.5%, up 40

basis points on the previous quarter, while its CET1 capital

ratio - a gauge of financial strength - was 17.9% at the end of

March, just below 18.1% at the end of December.

($1 = 0.9288 euros)