Milan / BLOOMBERG
Unicredit, Italy’s biggest bank by assets, said that net profit fell around a fifth at the start of the year due to restructuring costs in Italy and Austria.
The charges — to the tune of some 230 million euros – weighed on the bank’s net profit in the first quarter, which came to 406 million euros ($462 million), a 21-percent drop, it said.
However that still widely beat forecasts by analysts surveyed by Factset Estimates.
UniCredit shares on the Milan stock exchange slumped nearly 3.0 percent, to 2.07 euros in late afternoon, on slightly higher trading overall.
UniCredit, which like other banks is feeling the pinch from super-low interest rates and volatile financial markets, said revenues for the quarter dropped by 4.7 percent compared to the same period a year earlier.
The bank said net bad loans slightly increased to 20.2 billion euros but its coverage ratio improved to 61.2 percent.
Net impaired loans — which the bank does not expect to fully recoup — decreased by 2.0 percent in the quarter. Last month financial news agency Radiocor, citing the Bank of Italy, said Italian banks were currently saddled with some 200 billion euros worth of non-performing loans. The European Union and Italy reached an agreement in January on creating a guarantee vehicle to help Italian banks.
sell bad loans.
UniCredit also said its CET1 ratio — a measurement of a bank’s core equity capital compared with its total risk-weighted assets — was marginally lower compared to the end of December. It is slightly higher than the regulatory 10-percent target.
“Our capital ratios confirm the solidity of our group and our asset quality continues to improve: impaired loans continuously decrease, net bad loans are stable with a coverage ratio above 61 percent, the highest among Italian banks,” chief executive Federico Ghizzoni said in a statement.