MILAN (Reuters) - Intesa Sanpaolo will be cautious in approving any further share buybacks even though it has room to do so, its CEO Carlo Messina said on Friday, sending shares in Italy's biggest bank lower.

The bank's shares lost 3.5% after it reported higher than expected net profit in the first quarter, helped by a rebound in net fees which Messina said had continued in April and would result in double-digit growth for fees and commissions this year.

Shares extended losses as Messina reiterated his prudent stance on buybacks which have become the form of cashback preferred by bank investors.

"Our capital will increase and so we will remain with the room to evaluate further share buybacks. You know that I'm not a super fan," Messina said, adding the market was excessively focused on the short-term.

"We are here to remain forever and not only for two years' time," Messina said.

He has said in the past that a decision on buybacks can only be taken at the end of each year.

"We do not need to increase the share price because we want to make some M&A deal," Messina added.

With European banks trading in recent years at a significant discount to their book value (PTBV), buybacks have become popular with investors who sought a share of record profits once rates started rising.

Given the depressed valuations, banks could buy the shares cheaply and cancel them, lifting earnings per share and reducing the PTVB discount.

Intesa's rival UniCredit has adopted one of Europe's most generous distribution strategies under CEO Andrea Orcel, a former UBS banker, chiefly via buybacks which Orcel has said are what his shareholders want.

Intesa, on the other hand, has one of the highest cash payout ratios in Europe because its core shareholders, banking foundations, need money for their philanthropic activities.

(Reporting by Valentina Za, editing by Gavin Jones and Jane Merriman)