LONDON, Nov 10 (IFR) - Corporate and investment banking is likely to be a significant part of UniCredit’s future after the division accounted for a growing portion of the Italian bank’s core profits in the third quarter.
Chief executive Jean Pierre Mustier, who started in the role in June, is due to release the results of his strategic review of the group at a capital markets day on December 13.
During the three months to the end of September, the gross amount of loans in the CIB division rose 14.7% to 60bn compared with the same period a year ago. This helped revenues rise 25.7% year-on-year to 1.1bn and net profits at the division go up 17.9% to 366m.
Group net profit was 447m in the quarter, which included a 474m net loss in the bank’s non-core division.
“CIB remains one of the top contributors to group bottom-line result,” said the bank.
This loan growth comes at a time when the group is trying to shrink its overall balance sheet in order to meet capital requirements. UniCredit is also widely expected to raise capital, possibly via a rights issue of up to 5bn.
The bank has already started to sell its stakes in Polish and Italian lenders Bank Pekao and FinecoBank. These partial sales allowed the group’s common equity Tier 1 ratio to rise by 49bp over the quarter to 10.82% by the end of September. Since then it has sold a further 20% of FinecoBank as well as Ukrainian subsidiary Ukrsotsbank and a credit portfolio.
Mustier declined to give any more details about his strategy review. “We will comment on more detail on December 13 about the rationale for our various transactions,” he told analysts.
“There is quite a lot of interest from investors to buy NPLs [non-performing loans]. Over the past 36 months we have sold 10bn equivalent of gross loans in Italy and other countries. We will tell you if we do something specific on December 13.” (Reporting by Christopher Spink; Editing by Ian Edmondson)