UniCredit sees risk costs drop
ITALY’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
Net profit for the quarter to September dropped 20 per cent compared to the previous twelve weeks to €394m (£356m), UniCredit said, as revenue declined from an exceptional second quarter.
But risk costs declined by 11 per cent to €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.
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.
“There are signs that impaired loans growth is decreasing,” chief executive Alessandro Profumo said.
UniCredit said risk costs in emerging Europe will peak this year.