UCG Unicredit Spa

   By Pietro Lombardi 
 

UniCredit SpA (UCG.MI) shares trade higher Thursday after the bank posted better-than-expected third-quarter results ahead of its new strategic plan.

The improved earnings were anticipated, as they come against a previous-year quarter that was hit by an impairment related to the lender's stake in Turkish bank Yapi Kredi and provisions. However, net profit grew more than analysts had forecast.

UniCredit shares traded 4.3% higher at 0922 GMT.

The results cap a busy week for Italy's largest bank, which has sold its entire stake in Mediobanca SpA (MB.MI) and made further progress on asset quality.

Net profit for the period was 1.10 billion euros ($1.22 billion) compared with a profit of EUR29 million a year earlier, the bank said Thursday. On an adjusted basis, which excludes one-offs, net profit rose almost 26% on year.

Revenue rose 1.7% to EUR4.70 billion, benefiting from higher fees and trading income, which offset a 5% decline in net interest income.

Analysts had expected a net profit of EUR1.03 billion on revenue of EUR4.58 billion, according to a consensus forecast provided by the bank.

"This is another strong quarter from UniCredit," Jefferies said.

Capital was above expectations, the P&L showed solid core trends and the bank sped up the reduction of nonperforming loans, it said. UniCredit reported lower operating costs and a 19% decline in provisions for bad loans.

This was the bank's best quarter in a decade, Chief Executive Jean Pierre Mustier said.

"We have already met or will exceed our key targets by the end of this year," he said.

The strong performance comes as the lender gears up for a new plan, dubbed "Team 23", that it will present in December.

Under the current strategy, it cut costs, disposed of bad loans worth billions of euros and sold assets, including Polish lender Bank Pekao SA and asset manager Pioneer. The bank also raised EUR13 billion of fresh capital. More recently, it sold its stake in online lender FinecoBank SpA (FBK.MI), and, this week, it sold its stake in Mediobanca for EUR785 million.

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

(END) Dow Jones Newswires

November 07, 2019 04:47 ET (09:47 GMT)

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