MILAN (AP) — UniCredit SpA, Italy's largest bank, reported Tuesday that its second-quarter net profit fell 70 percent due to a drop in trading income and a one-time writedown.
The group said in a statement that net profit dropped to €148 million ($195.67 million) from €490 million a year ago.
The Milan-based bank’s net trading income fell to €58 million from more than €1 billion a year earlier, due to the continued difficult conditions in the banking sector, it said. It also recorded €310 million of goodwill impairment related to Unicredit’s subsidiary inKazakhstan.
Net fees and commission rose 17 percent to €2.2 billion, while net interest fell 15 percent to €4.1 billion.
Unicredit shares fell 2.48 percent to €2.16 on the earnings report, recovering a bit to close down 1.8 percent at €2.18 on Tuesday.
Unicredit CEO Alessandro Profumo is shedding non-core assets and cutting costs to improve the bank’s finances.
Profumo told analysts the bank has a strong showing of interest for its Pioneer Global Asset Management unit, which is on the block. The process of valuing Pioneer is under way and a clearer plan will be presented in September, Profumo said.
Unicredit is also negotiating with unions to reduce the number of workers.
The bank’s Core Tier 1 ratio — a key measure of capital strength — rose to 8.41 percent. The bank passed a stress test last month, showing its Core Tier 1 ration would remain among the 6 percent threshold in the worst case scenario.
