UniCredit reported a drop in first-quarter earnings on 5 May, dragged by rising provisions related to its Russian business, and cautioned that a planned buyback will depend on its performance in the country.
The Italian bank posted a net profit of €247m ($262.4m), compared with €829m a year earlier and consensus expectations of €455m.
Excluding UniCredit’s Russian business, which swung to a loss, net profit was €1.16bn, the bank said.
The bank booked loan-loss provisions of €1.28bn, the bulk of which related to Russia. It said it is confident it can deliver a €1bn buyback, though that remains subject to its performance in Russia.
UniCredit, Italy’s second-largest bank by assets, said in March that it was considering pulling out of Russia in light the war in Ukraine. It didn’t provide an update on its review of its Russian activities.
Revenue rose 7.3% to EUR5.02 billion, compared with analyst views of €4.44b, according to a company-compiled consensus.
Common equity Tier 1 ratio, a measure of banks’ capital strength, stood at 14% at the end of the quarter, down from 15% at the end of 2021.
The company reiterated its 2022 goals, including revenue of about €16bn, though it said they apply to its performance excluding Russia. The bank is also committed to its goal to return at least €16bn to shareholders by 2024, it said.
Write to Cristina Roca at [email protected]
This article was published by Dow Jones Newswires