UniCredit 2Q Net Profit Rises to EUR945 Million -- Update
August 03 2017 - 01:56AM
Dow Jones News
By Giovanni Legorano
ROME--Italian lender UniCredit SpA (UCG.MI) said second-quarter
net profit rose, supported by higher fees and commissions as well
as lower provisions for bad loans.
The bank, Italy's largest by assets, said Thursday net profit
stood at 945 million euros ($1.1 billion), compared with EUR916
million a year earlier. Last year, lower costs and one-time items,
including a EUR216 million capital gain on UniCredit's sale of its
stake in Visa Europe, buoyed the figure.
Revenue declined 8% to EUR4.86 billion in the latest period,
mainly because of lower trading income, which fell 46% from a year
earlier to EUR462 million.
"This quarter benefited from an economic environment which is
supportive in Europe," said Chief Executive Jean Pierre Mustier,
adding the lender is also starting to reap the benefits of its
internal reorganization.
In February, UniCredit completed a EUR13 billion rights issue,
one of the biggest transactions of this kind ever launched in
Europe and a key plank of the lender's plan to shore up its
finances and making it more profitable.
The bank said in December it planned to sell fresh shares, cut
thousands of jobs and shed a large chunk of bad loans as part of
the overhaul.
After launching the share sale, the bank posted a loss of
EUR13.56 billion for the last quarter of 2016, reflecting the
clean-up of its balance sheet foreseen in the plan.
Last month, the bank signed a definitive agreement with Pacific
Investment Management Co., or Pimco, and Fortress Investment Group
for the sale of EUR18 billion worth of bad loans.
For the quarter, the bank set aside EUR564 million to cover for
potential losses on loans, down from EUR884 million for the same
quarter a year earlier.
The bank said its Common Equity Tier 1 Ratio with fully applied
Basel 3 rules--a commonly used measure of capital strength for
lenders---stood at 12.8% at the end of June, benefiting from an
additional 0.72 percentage points coming from the sale of its
Polish unit Bank Pekao which it completed during the quarter.
However, the bank said net profit was lowered by two one-off
items: EUR310 million in negative currency effects coming from the
sale of Pekao, plus a EUR135 million write-down of the bank's stake
in Atlante, a government-orchestrated fund created last year to
save ailing banks and buy lenders' bad loans.
Write to Giovanni Legorano at giovanni.legorano@wsj.com
(END) Dow Jones Newswires
August 03, 2017 02:41 ET (06:41 GMT)
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