UniCredit Shares Fall on 2Q Results
07 August 2019 - 6:24PM
Dow Jones News
By Pietro Lombardi
Shares in UniCredit SpA (UCG.MI) are under pressure after the
bank cut its revenue outlook for the year due to the expectations
that interest rates will be lower for longer while business sales
boosted second-quarter net profit.
The results comes at a challenging time for European banks, with
low interest rates putting pressure on their business. In late
July, CaixaBank SA (CABK.MC) and Banco de Sabadell SA (SAB.MC) cut
their income guidance for the year and mentioned the impact of low
interest rates.
The Italian bank, which is in the last months of its three-year
strategic plan, said Wednesday that it now sees revenue at 18.7
billion euros ($20.9 billion) this year, down from a previous
target of EUR19 billion that included the effects of the
deconsolidation of FinecoBank SpA (FBK.MI).
"In the prevailing environment with rates expected to be lower
for much longer, we adjust our FY19 revenue guidance," Chief
Executive Jean Pierre Mustier said.
The bank confirmed its cost and profit targets.
Net profit for the period was EUR1.85 billion compared with
EUR1.02 billion a year earlier. On an adjusted basis, which
excludes one-offs, net profit grew 0.4% to EUR1.03 billion. Revenue
fell 4.6% on year to EUR4.52 billion.
These results compare with analysts' expectations of a net
profit of EUR2.23 billion on revenue of EUR4.62 billion, according
to a consensus forecast provided by the bank.
The results "showed softer core revenues, but ongoing delivery
on cost reduction and NPLs de-risking," Citi analysts said.
UniCredit shares were down 2.5% at 0740 GMT, while Italy's
benchmark FTSE MIB index was up 0.3%.
Net interest income--the difference between what lenders earn
from loans and pay for deposits, and a key profit driver for retail
banks--fell 2.1%. Net fees and commissions were down 3% while
trading income plunged 19%.
"We delivered another solid set of results in the first half of
2019 in what was a tough macroeconomic environment," Mr. Mustier
said.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
August 07, 2019 04:09 ET (08:09 GMT)
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