UNICREDIT, Italy’s biggest bank, posted a 70 per cent drop in second-quarter net profit yesterday, hit by a slump in trading income and a goodwill impairment, sending the shares lower.
UniCredit, whose roots stretch back to a 15th-century Bologna municipal pawnshop, posted a net profit of €148m (£122.8m), including a €162m goodwill impairment charge stemming from the economic crisis in Kazakhstan. Analysts had forecast a consensus net profit of €251m.
The bank, the biggest lender in central and eastern Europe, also recorded €1.716bn in loan loss provisions over the quarter.
Trading revenues fell to €58m from €1bn in the same period in 2009, hit by the government debt crisis.
Net interest income – what a bank earns on loans less what it pays on deposits – was up 1.5 per cent quarter-on-quarter at €3.98bn.
UniCredit’s core tier one ratio, or the standard of capital held against risky assets, was 8.41 per cent at the end of June, down from 8.45 per cent in March.
City A.M. Reporter