Tags: EU | Italy | Earns | Unicredit

Earnings Plunge 64% for Italy's Largest Bank

Tuesday, 27 Mar 2012 12:37 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Unicredit, Italy's largest bank by assets, on Tuesday reported that fourth quarter profits dropped by 64 percent due to losses caused by the European sovereign debt crisis and weak economic activity.

Unicredit SpA's net income was 114 million euros ($151.35 million), down from 321 million euros a year earlier. It booked a loss of 70 million euros on Greek bonds and of 63 million euros on severance costs.

For the year, the bank posted a loss of 9.2 billion euros, due largely to losses on investments recorded in the third quarter.

The bank said its Tier 1 capital ratio, a key measure of a bank's health where capital is measured against the sum of riskier assets, has reached 9.97 percent — thanks to a 7.5 billion euro rights offer in January — to meet capital targets set by European authorities. It was 8.4 percent at the end of last year.

Overall, investors appeared pleased with the figures, sending shares in the bank up 2.3 percent to 4.05 euros in Milan Tuesday.

CEO Federico Ghizzoni told analysts that Unicredit planned to go to the markets again in the next couple of months but does "not feel particularly pressured." The bank tapped the markets for 42 billion euros last year and expects to seek 31 billion euros in 2012.

It took 26 billion eurosin low-cost loans from the European Central Bank, but Ghizzoni said it was not planning to use them to buy Italian debt. Instead, the bank is looking to loan to customers where the CEO believes they can achieve "margins even better than Treasury bonds."

Unicredit, which said it won't pay a dividend for 2011, is cutting staff and refocusing its operations in eastern Europe as part of a strategic plan outlined in November.

Unicredit ended the year with 926.8 billion euros of assets, down from 929.5 billion at the end of 2010.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved