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UniCredit Q1 net profit reached €406 million

Staff writer |
UniCredit Group Q1 net profit reached €406 million in 1Q16 and stands above €640 m excluding non-recurring items related to restructuring charges in Austria and Italy.

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RoTE at 3.8% in 1Q16 (6.1% excluding restructuring charges). Strong contributors to bottom line are Commercial Bank Italy, CEE and CIB.

CET1 ratio fully loaded pro-forma is stable at 10.85% (-9bps Q/Q, +75bps Y/Y). CET1 ratio transitional pro-forma stands at 10.50% (-23bps Q/Q), Tier 1 ratio transitional pro-forma at 11.36% and Total Capital ratio transitional pro-forma at 13.98%.

Basel 3 Leverage ratio transitional pro-forma stands at 4.49% and fully loaded pro-forma at 4.42%.

Group asset quality continues to improve in 1Q16, with net impaired loans further down to €38.1 bn (-2.0% Q/Q, -7.1% Y/Y) with a solid coverage ratio at 51.7%. Net bad loans slightly increase at €20.2 bn with an improved coverage ratio at 61.2%.

Net bad loan ratio is stable at 4.2% in 1Q16 [6]. Other net impaired loans further shrink by -5.4% Q/Q and -16.0% Y/Y, mainly due to higher collections and back to performing.

In Italy, asset quality experiences continued positive progress with impaired loans trend of UniCredit S.p.A. consistently better than the Italian banking system (ABI sample [7]) at the end of March 2016, with the highest coverage ratio on gross impaired loans at 53.0%.

The Core Bank net profit increases to €973 m in 1Q16 (excluding c. €240 m of restructuring costs).

Revenues are resilient at €5.5 bn (-2.6% Q/Q, -3.8% Y/Y), with higher trading and investment fees offsetting the impact of low interests rates.

Costs register a downward trend, as provisions do. Commercial Bank Italy confirms its role as largest contributor to net profit followed by CIB and CEE, notwithstanding a challenging and adverse market environment.

New medium-long term loan origination reaches c. €15 bn in 1Q16, of which €7.5 bn in the three Commercial Banks, €3.9 bn in CIB, €2.8 bn in CEE and c. €1 bn in Poland, thanks to UniCredit's pan-European franchise and cross-divisional synergies.

Commercial deposits increase by €6.0 bn to €393.5 bn (+1.5% Q/Q, +9.7% Y/Y), mainly due to growth registered in Commercial Bank Italy to €126.1 bn (+3.4% Q/Q, +14.4% Y/Y) and in CEE to €58.4 bn (+4.6% Q/Q, +17.9% Y/Y at constant FX).

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