MILAN May 10 Italy's biggest bank by assets,
UniCredit, returned to profit in the first quarter of
2013 thanks to lower loan loss provisions and strong trading
income, it said on Friday.
UniCredit, the first Italian retail bank to release its
results for the quarter, said its net profit came in at 449
million euros, compared with an analyst consensus distributed by
the bank of 156 million euros. In the fourth quarter of last
year UniCredit had posted a 553-million euro loss.
The bank said its Core Tier 1 ratio - a key measure of
financial strength - stood at 9.46 percent at the end of March,
rising to 9.64 percent when a series of recent disposals is
taken into account. The ratio stood at 9.2 percent at the end of
Like other Italian banks, UniCredit has been struggling to
keep a lid on mounting bad debts as the euro zone's third
biggest economy struggles with its longest recession in 20
However, after setting aside nearly 10 billion euros to
cover for souring loans in 2012, the bank benefited from
seasonally lower loan loss provisions in the first three months
of the year.
Those charges stood at 1.2 billion euros in the period, down
73 percent from the fourth quarter of 2012. The bank said that
for the second consecutive quarter, inflows of new bad loans had
decreased in its Italian home market.
Most analysts however expect bad debts at Italian lenders to
keep rising for the rest of 2013 and data from the Bank of Italy
showed on Thursday non-performing loans grew in March at the
highest rate since December 2011.
(Reporting By Silvia Aloisi, editing by Jennifer Clark)