MILAN Nov 13 UniCredit, Italy's
largest bank by assets, said on Tuesday its net profit in the
third quarter came in at 335 million euros ($425.82 million),
well above analysts' forecasts, thanks to strong trading gains
and cost cuts.
The results marked a sharp improvement compared to the third
quarter of last year, when UniCredit posted a loss of 10.6
billion euros because of hefty writedowns on past acquisitions.
An analyst consensus distributed by the bank had forecast a net
profit of 135 million euros.
The bank said it had set aside 1.8 billion euros to cover
risky loans, which have been rising because of Italy's deep
recession. UniCredit makes around 40 percent of its revenues in
its home country but also has a strong presence in Germany,
Austria, Poland and Turkey.
Unicredit's Core Tier 1 ratio, a closely watched measure of
financial strength, inched up to 10.7 percent at the end of
September, against 10.4 percent at the end of June. Under
stricter Basel III standards, the ratio stood at 9.3 percent,
above a previous 2012 target of 9.1 percent.
UniCredit was forced to shore up its capital base with a 7.5
billion euros cash call in January - its third since 2008 - to
meet tougher requirements set by the European Banking Authority.
The bank, which has seen its stock dive 32 percent over the
past year, has been at the centre of recent press speculation
that it may tie up with doemstic rival Intesa Sanpaolo
in a defensive move to ward off a possible foreign takeover.
Executives at both banks have denied the speculation but
sources close to the matter say Italian banking foundations that
are among the core shareholders of both lenders are worried
about their low market capitalisation.
UniCredit and Intesa have a market value of around 19
billion euros each.
UniCredit shares extended gains after the results, and were
up nearly 3 percent at 3.47 euros by 1313 GMT.
($1 = 0.7867 euros)
(Reporting By Silvia Aloisi, editing by Stephen Jewkes)