Unicredit Profit Drops 26 Percent In Q3

MILAN (AP) — Unicredit Group, Italy's largest bank, reported Wednesday a 26 percent drop in third-quarter profit due to increased provisions for bad debt and lower revenue.

The company said net income dropped to euro394 million ($589.66 million) from euro532 million a year earlier.

Unicredit also joined Intesa San Paolo in rejecting government bonds to boost its capitalization, saying they were no longer necessary. The bank is instead trying to boost its Core Tier 1 ratio, a sign of health in the bank, by selling non-core assets and shares.

The bank said its Core Tier 1 ratio rose to 7.55 percent as of Sept. 30.

Loan loss provisions in the quarter nearly doubled to euro2.16 billion from about euro1.1 billion a year earlier. Operating income was euro6.73 billion, down slightly from euro6.74 billion a year earlier. The bank said the quarterly trend shows growth in net commission and trading income "which is once again at solid levels."

Net fee and commission income fell 12 percent to euro1.9 billion, while net trading income was euro715 million, up from a loss of euro524 million in the same period last year.

Unicredit shares rose 1 percent to euro2.52 in early trading on the Milan stock exchange.