GHIZZONI: FIRST SIGNS OF RECOVERY IN ITALY
BUT ONLY EASTERN EUROPE HAS SAVED PROFITS
"In a general economic scenario that has continued to be very difficult, I consider it important that UniCredit has achieved a positive net result even in a particularly challenging third quarter, not only due to the effects of seasonal factors". Thus attacks the comment of Federico Ghizzoni, at Unicredit, in the first conference call held in Piazza Gae Aulenti, in the bank's new futuristic headquarters. “We are starting to see some first encouraging signs of recovery in Italy” continued, with great prudence, the bankoere.
The figures confirm such caution. The profit in the first nine months was one billion (-28,5% ). In the quarter profits were 204 million (-39,1%). In the nine months, revenues fell to 18,2 billion (-7,1% on 2012), operating costs fell to 11 billion (-2,2%) while the cost/income ratio rose to 60,6 % (+3%). The gross operating margin thus slowed down to 7,2 billion (-13,8%). As at 30 September, Core tier 1 stood at 11,71%, with an improvement of 30 points compared to June 2013. In the quarter, revenues fell to 5,7 billion (-8,5%), operating costs to 3,6 billion (-3,0%) while the cost/income ratio stood at 63,1% (+3,6%). The gross operating margin decreased to 2,1 billion (-16,7%). Loans disbursed by Unicredit in Italy are up by 5,25 billion euro. Finally, in the first 9 months of the year, new loans to households and businesses grew by 15,5% compared to a year ago. In particular, new medium/long-term loans to businesses increased by 17,8%, mortgages to households by 20,6% and personal loans by 9,5%.
In essence
a) the profit for the quarter was supported by the excellent contribution of Central and Eastern Europe and Poland (578 million) while that of Corporate and Investment Banking was 361 million. During the same period, Unicredit's commercial banking division in Italy reported a net loss of €165 million, due to loan provisions of €1,1 billion, which offset the good EBITDA of €945 million recorded in the quarter.
b) As regards provisions for loans, there was a drop to 4,4 billion (-8,7%). In the quarter, the reduction in provisions (-10,6%) amounted to 1,6 billion. The decrease in risk-weighted assets, underlined Ghizzoni, "confirms the Group's ability to meet regulatory requirements and market demands" and "net flows of non-performing loans are stabilizing in all the main areas of the Group, as well as the coverage ratio'. The confirmation comes from the fact that Unicredit, after repaying about 2 billion in advance in June, at the beginning of November Unicredit again repaid about one billion of loans from the ECB (Ltro). The amount of loans still owed still amounts to around 23 billion euros.
c) Will the economic situation allow for the distribution of a dividend? Ghizzoni, of course, does not comment. ”As always we speak at the end. We are setting aside the same dividend as last year and then we will see what can be done. We will carry out the checks at the end of the year”. It is known that the Bank of Italy is pressing to strengthen capital, starting with the systemic banks, in view of the tests conducted by the ECB. From the revaluation of the stake in Bankitalia, revealed Ghizzoni, "one could deduce a range of 15-20 basis points" in Core Tier 1.
d) There is also little news on the financial items in which the bank is involved. 'As regards Alitalia, Ghizzoni said: "If Air France stays well, otherwise the company and the government will be free to look at other solutions". Alitalia "is not a company of little value and is an interesting partner for many operators in the sector". Speaking of Mediobanca, Ghizzoni specified that “there is no discussion on the modification of the pact which has just been renewed”. "I'm with the facts - he concluded - there's nothing else" and "I'm not discussing hypotheses, first let's see if there are any proposals, at the moment there's nothing on the table": Also on the possible interest of foreign investors in entering in the deal? "It doesn't appear to me." .
