By Mauro Orru

UniCredit SpA said Wednesday that it would take an additional 900 million euros ($976 million) in generic loan loss provisions in the first quarter of 2020 as it anticipates the IFRS9 macroeconomic scenario update.

The Italian bank said it expects a 13% fall in eurozone gross domestic product for 2020, with a 10% recovery in 2021, assumptions which include the projected impact of the coronavirus pandemic.

UniCredit said cost of risk for the first quarter is projected around 110 basis points, with 80 basis due to the updated IFRS9 scenario.

Cost of risk for 2020 is expected to be in a range of 100 basis points and 120 basis points, the lender said, projecting a range of 70 basis points and 90 basis points for 2021.

The announcement comes as Chief Executive Jean Pierre Mustier proposed a 25% reduction to his own 2020 salary, renouncing his full variable remuneration for the year.

UniCredit said it has a "strong liquidity position", with a liquidity coverage ratio above 140% at the end of the first quarter.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

April 22, 2020 02:15 ET (06:15 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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