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Financials

UBI Banca core capital rises in Q3, net profit drops

MILAN, Nov 11 (Reuters) - Italy’s UBI Banca posted a 14 percent yearly drop in third-quarter net profit on falling net interest income and higher contributions to a deposit protection scheme, but said its core capital strengthened and was set to rise further.

In July-September, the bank turned in a 32.5 million euro ($35 million) net profit, hit by a drop in net interest income as it cut its securities portfolio by a further 1.2 billion euros quarter-on-quarter.

UBI said on Friday its best-quality capital ratio rose to 11.28 percent at end-September from 11.02 percent in the first half, when UBI had reported a 787 million euro loss due to loan writedowns and layoff charges.

The bank said the buyback of minorities to be paid for mainly in UBI shares as well as tax benefits from the loan writedowns were set to add another 0.70 percentage points to the capital ratio. ($1 = 0.9170 euros) (Reporting by Valentina Za; editing by Agnieszka Flak)

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