By Lisa Jucca
LONDON (Reuters) - UniCredit's (CRDI.MI: Quote, Profile, Research, Stock Buzz) investment banking operations will not be able to sustain the high growth it experienced in the first half, but will still beat targets for the full year, its Deputy CEO said on Tuesday.
Problems in the U.S. subprime mortgage market earlier this year have triggered prolonged turmoil in the credit markets, which is hurting banks across the globe.
"(We had said) the first half of the year was not sustainable. Unfortunately, we have been proven correct," Sergio Ermotti, Deputy Chief Executive at Europe's third-largest bank UniCredit, told the Reuters Finance Summit in London.
"We are still confident we will beat our targets for the year. This is not an issue, but for sure, the situation in the market has changed," he added.
Investment banking accounts for about 20 percent of UniCredit's profit, Ermotti said. The Italian bank is due to report results next week.
Ermotti said the current market turmoil was not having an impact on UniCredit's integration of smaller Italian peer Capitalia, which it took over this year, nor on the expected synergies.
"We expect by the end of the fourth quarter, beginning of first quarter 2008, to have fully consolidated Capitalia," he said.
Ermotti also said UniCredit would be prepared to consolidate off-balance-sheet items if required by regulators. Continued...
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