UniCredit records large increase in profit

7 August 2013

UniCredit, Italy's largest bank in terms of assets, has displayed early signs of economic recovery in the European nation by doubling its net profit.

The company beat market expectations with a 114 per cent year-on-year increase in net earnings to €361 million ($480 million).

Mortgages were in very high demand and such a rise is unusual at this time of the year.

However, UniCredit set aside more finances for bad loans due to a prolonged recession in the eurozone's third-biggest economy.

Intesa Sanpaolo also boosted its provisions in the second quarter to cover bad loans, which is still climbing, but at a slower pace than in the first quarter.

These provisions increased to €1.7 billion, up 35 per cent from the previous three month period, totalling €2.9 billion in the first half of 2013.

The European Central Bank will perform health checks on Italy's institutions in 2014 as it takes over supervision of eurozone lenders.

By Gary Cooper

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