Tuesday August 4, 05:08 PM
Unicredit bank says quarterly profit down 74%
MILAN (AFP) - Italian banking giant Unicredit (Milan: UCG.MI - news) said Tuesday its net profits fell by 74.37 percent in the second quarter to 490 million euros (706 million dollars) due to write-downs and provisions in the economic crisis.
In the equivalent quarter a year ago, net profits were 1.912 billion euros. The second-quarter results nevertheless beat the forcasts of analysts polled by Dow Jones Newswires, who had predicted net profits of 427 million euros.
Unicredit's shares on the Milan stock exchange were up 3.36 percent at 2.2275 euros at 1435 GMT on a stable market.
The bank's write-downs and provisions amounted to 2.43 billion euros, from 634 million euros in the corresponding period of 2008.
Bad debts also rose, by 7.6 percent to 30.9 billion euros by comparison with the first quarter.
Operating profits were up 15.6 percent at 3.9 billion euros amid recovery after a 2008 battering for its investment banking arm particularly in central and eastern European markets.
Net banking income rose 2.2 percent to 7.76 billion euros, and Unicredit said its core Tier One capital ratio -- a measure of a bank's health -- was 6.85 percent at the end of June, up from 6.69 percent at the end of March.
The bank had sought government help to shore up its balance sheet, with schemes on offer in Italy and Austria.
"The improvement of the second quarter with respect to the first quarter is attributable, above all, to an increase in revenues with strong acceleration in net trading, hedging and fair value income, as well as to a rise (quarter on quarter) in both net interest and net commissions," the bank said in a statement.
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