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UniCredit Q4 Profit Plunges, Scraps Dividend For 2011 - Update

3/27/2012 10:22 AM ET

Italy's biggest bank UniCredit SpA (UNCFF.PK,UCG: Quote) reported Tuesday a sharp decline in fourth-quarter profit, reflecting Greek bonds impairment and severance costs as well as reduction in revenues.

The company stated that though its quarterly results are affected by financial markets volatility due to Sovereign debt crisis and negative macroeconomic environment, the main operating lines are showing improvements.

UniCredit also said its board will propose to the annual shareholders' meeting a zero dividend payment for both ordinary and saving shares for 2011.

Federico Ghizzoni, CEO of the company said, "The underlying performance in 2011 showed the resilience of the Group in a very challenging environment, that and the significant rebound of the results of our Italian business, proves the pertinence of our actions and our targeted strategic approach."

In the fourth quarter, net profit attributable to the group plunged to 114 million euros from 321 million euros in the previous year. Excluding one-offs due to Greek bonds impairment of 70 million euros and severance costs of 63 million euros, quarterly adjusted net profit totaled 247 million euros.

Net operating profit was 801 million euros, down 20.1 percent from the preceding year.

Revenues for the quarter decreased 5.9 percent to 6.09 billion euros from 6.47 billion euros in the same quarter last year. Revenues were up 6.4 percent from the sequential third quarter, with a sound contribution from core revenues.

Operating costs advanced 2.1 percent to 3.8 billion euros. Provisions for loan loss declined 14.8 percent year-over-year to 1.5 billion euros.

As of December 2011, the company's Core Tier 1 ratio was equal to 8.4 percent and including Rights issue, the ratio was 9.97 percent.

In Milan, UniCredit shares closed Monday's regular trading at 3.97 euros.

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by RTT Staff Writer

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