The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
UniCredit SpA Chief Executive Officer Jean Pierre Mustier accelerated a long-running cleanup and bore down on costs as the Italian bank prepares to move from a strategy of recovery to growth.
Italy’s biggest bank reduced operating expenses by 4.2 percent in the first quarter from a year earlier and set aside less money for bad loans. That helped the bank beat estimates for net income even as low interest rates and a weakening Italian economy weighed on revenue, which fell by 3 percent.
UniCredit is among the European lenders seen as a possible suitor for Commerzbank AG after German lender’s merger talks with Deutsche Bank AG ended without deal last month. While Mustier has refused to comment on possible deals, he has said that “all options are open†after the company finishes its current business plan at the end of 2019.
The earnings come a day after the bank said it sold a 17 percent stake in FinecoBank SpA, raising more than 1 billion euros. UniCredit also announced several steps it expects to take ahead of the new business plan, including accelerating the run down of non-essential business, adjusting its holdings of Italian sovereign debt and improving its capital buffer.
The measures are aimed at helping the bank reduce the cost of equity and give it more flexibility to increase the dividend payout gradually towards its 50 percent target.
The bank’s key common equity Tier 1 ratio rose to 12.25 percent as of March 31 from 12.06 percent at the end of last year on improved asset quality and profit generation.