Monte dei Paschi (MPS) said net profit came in at 236 million euros ($260 million), outstripping a 150 million euro market consensus cited by analysts, and growing more than 20-fold compared with a 10 million euro profit last year.

Income from the lending business rose 57% from a year before, outpacing expectations.

Operating costs fell 14% year-on-year.

The bank said its best-quality capital stood at 14.9% of risk weighted assets (RWAs), down from 15.6% at the end of last year, after a revision of internal risk models drove a 3.8 billion euro increase in RWAs in the quarter.($1 = 0.9084 euros)

(Reporting by Valentina Za, editing by Gavin Jones)