RBC starts Intesa Sanpaolo at 'outperform' on profitability, returns

** RBC starts coverage on Italy's Intesa Sanpaolo ISP at "outperform" with 7 euros ($8.15) PT, citing sustained profitability, shareholder returns

** "Revolutionary changes are not required for ISP to continue delivering leading profitability and shareholder returns" - RBC

** Says Italy's biggest bank can boost return on tangible equity about 1.8% via cost cuts in retail banking, corporate revenue expansion

** Italy's biggest bank net interest income has limited downside risk and can maintain a "largely stable" margin over the next strategic plan, RBC adds

** Notes Italy's banking M&A wave as an opportunity for ISP to consolidate domestic wealth, asset management leadership

** Expects rising loan demand to benefit ISP as Italy enters "normalised growth" period

** 18 of 23 analysts rate stock "strong buy" or "buy"; 4 "hold", 1 "sell" - per LSEG data

($1 = 0.8586 euros)