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UniCredit stalls on state aid as profits improve

ITALIAN bank UniCredit said it would decide in September whether to go ahead with Italian state aid after reporting better-than-expected second-quarter net income on improved trading profit.<br /><br />Chief executive Alessandro Profumo said the bank was in talks with Italy over hybrid bonds to bolster its capital ratios and assure lending to smaller companies. <br /><br />UniCredit has signed up for a total of &euro;4bn (&pound;3.4bn) in state aid in Italy and Austria.<br /><br />&ldquo;Clearly we will behave in the best interests of our shareholders,&rdquo; he said in a conference call,<br /><br />&ldquo;We are in the process of negotiating. The timing is September.&rdquo;<br /><br />UniCredit, Europe&rsquo;s fourth-biggest bank by market value and the top lender in recession-hit eastern Europe, posted its best operating profit in two years as trading rose by &euro;1.05bn from the first quarter to the second quarter.<br /><br />Net profit was &euro;490m, up 9.6 per cent from the previous quarter, it said in a statement.<br /><br />With the bank still recovering from a pummelling in central and eastern Europe, a UniCredit survey of 29 analysts had forecast a mean net profit of &euro;434m.