The largest bank in Italy, UniCredit SpA reported that its 2nd quarter is not pleasing and unfavorable. It dropped 67% because of increase in bad loans. The company earned much lower net profit while lending loans and fees.
Federico Ghizzoni, CEO of UniCredit stated, ?Our net income dropped due to majority of provisions in loan loss with the total increase ratio coverage within Italy during this quarter.? He continued, ?There is an active progress of turnaround within the country. It is seen with the improved operating in profitability during the first half of the fiscal year.?
In the previous year of the same quarter, UniCredit had 511 million Euros. Now, its net income decreased to 169 million Euros. It is equivalent to $207 million, according to the official statement of UniCredit. The statement was released on 3rd of August.
Moreover, Ghizzoni confirmed that the bank is going to have reorganization. Through the reorganization, lay off of employees is chained. It is geared towards improving its profitability while the country is experiencing its 3rd recession. It is also aimed to recover from sovereign crisis in debt.
Bloomberg News conducted a survey among 14 analysts from different financial research firms. The result showed that the respondent?s estimated average was missed by the Italy-based company. They estimated 305 million Euros.
On the other hand, the 2nd largest bank in Italy, Intesa Sanpaolo reported lower decrease in net income in 2nd quarter. It had a little tax gain which covered the impact of increasing bad loans as well as lesser revenue.
Source: http://www.ficklefinance.com/unicredit-losses-on-loan-shares-dropped/
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