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UniCredit scores higher second quarter profit

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UniCredit scores higher second quarter profit
UniCredit chief executive Federico Ghizzoni. Photo: Alberto Pizzoli
15:20 CEST+02:00
Italy's top bank UniCredit said on Wednesday it scored a 29.5 percent jump in second quarter net profits despite an unfavourable climate for lenders, but its earnings still trailed in the first half of 2015.

The net profit of €522 million ($569 million) in the April through June period was a two percent increase from the first quarter of the year.

Over the first half of this year the bank earned a net profit of €1.034 billion, a drop of 7.3 percent from the same period in 2014.

UniCredit chief executive Federico Ghizzoni called the performance "an excellent result in a still unfavourable environment for the banking sector, with interest rates at their historical lows."

He said in the first half of year the bank stepped up medium- to long-term lending to companies and households by about 40 percent.

"In a scenario characterised by a moderate economic recovery, both in Italy and in Europe, UniCredit showed significant growth in new loans origination," Ghizzoni said.

UniCredit, which had hemorrhaged €14 billion in 2013 after writing down many of its assets ahead of "stress tests" carried out by the European Central Bank on the heels of the financial crisis, returned to profit last year and has been taking advantage of ECB stimulus funds to step up lending to businesses and individuals.

However that may have come at a cost to quality, with loan loss provisions rising by 2.8 percent in the first half of 2015 against the same period last year to €1.9 billion.

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