UniCredit Shares Fall After 3Q Miss on Turkish Business Hit -- Update
08 Noviembre 2018 - 5:53AM
Noticias Dow Jones
Adds share price, expectations, CEO comment, revised and
confirmed targets, analysts' comments.
By Pietro Lombardi
Shares in UniCredit SpA (UCG.MI) trade lower Thursday after the
bank's third-quarter net profit missed expectations as it reported
an impairment related to its stake in Turkish bank Yapi Kredi and
increased provisions ahead of "the upcoming settlement of alleged
U.S. sanctions violations."
Net profit for the period was 29 million euros ($33.2 million),
down from EUR2.82 billion a year earlier, when the bank reported a
EUR2.1 billion capital gain on the sale of its asset-management
unit Pioneer Investments.
The bank reported an EUR846 million impairment in the quarter
related to its stake in Yapi Kredi.
Analysts had expected the bank to report a net profit of EUR921
million on revenue of EUR4.78 billion, according to a consensus
provided by the company.
On an adjusted basis, which excludes one-offs like the unit sale
or the Yapi impairment, net profit for the period rose to EUR875
million, compared with EUR835 million a year ago, the bank
said.
At 1120 GMT shares in UniCredit traded 4.5% lower.
The bank's performance showed "mixed numbers" for the third
quarter, UBS analysts said. Underlying earnings were strong but
"capital depletion will take the market by surprise," they
added.
The bank delivered strong third-quarter underlying results "in
an increasingly challenging macroeconomic environment," Chief
Executive Jean Pierre Mustier said in a statement.
Total revenue increased 2% on year, supported by growing net
interest income and fees and commissions, while operating costs
fell 7.7%.
"During the quarter we took decisive actions related to
nonrecurring events," the CEO said, mentioning the "additional
provisions relating to the upcoming settlement of alleged U.S.
sanctions violations."
"We are also implementing a number of measures to protect our
capital position, including specific asset disposals such as real
estate, and around 35% reduction in the sensitivity of our CET1
ratio to BTP spreads," he said.
The Italian bank confirmed its 2019 targets for net profit and
Return on Tangible Equity, seen at EUR4.7 billion and above 9%
respectively. It also confirmed its 2019 outlook for net interest
income and fees. However, it cut the revenue outlook, and now
expects 2019 revenue of EUR19.8 billion, from a previous
expectations of EUR20.6 billion.
UniCredit is improving its cost-reduction targets for 2018 and
2019, seeing 2019 costs below EUR10.6 billion, from a previous
target of EUR10.6 billion.
It also said it expects its 2019 core tier 1 ratio at between
12% and 12.5%, from a previous expectations of above 12.5%.
UniCredit's fully loaded common equity Tier 1 ratio, a key
measure of capital strength, fell to 12.11% in September, down from
12.51% in June.
"We are being very conservative on the Turkish side and the
trading side," the CEO said in a call with journalists, stressing
that the bank confirmed its profitability targets and will
compensate with lower costs.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
November 08, 2018 06:38 ET (11:38 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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