UniCredit sees risk costs drop

City A.M. Reporter
ITALY&rsquo;S biggest bank UniCredit reported the first quarterly decline in bad debt charges in more than a year yesterday, despite a big writedown in Kazakhstan<br /><br />Net profit for the quarter to September dropped 20 per cent compared to the previous twelve weeks to &euro;394m (&pound;356m), UniCredit said, as revenue declined from an exceptional second quarter.<br /><br />But risk costs declined by 11 per cent to &euro;2.16bn on the quarter, including in key countries in central and eastern Europe, the region where UniCredit is the biggest lender and where its bad debt charges have risen sharply.<br /><br />While risk costs were still twice as high as a year ago, showing the deep economic malaise the former Communist region is mired in, the quarterly decline was the first since the second quarter of 2008 and came despite a huge charge in Kazakhstan.<br /><br />&ldquo;There are signs that impaired loans growth is decreasing,&rdquo; chief executive Alessandro Profumo said.<br /><br />UniCredit said risk costs in emerging Europe will peak this year.