Intesa Sanpaolo, UniCredit profits hit by increase in loan provisions
Net profit at Italy’s Intesa Sanpaolo fell more than 40% in the second quarter, following lower trading gains and and an increase in provisions for domestic loans.
Net income decreased to €470m from €741m the previous year.
During the quarter, loan-loss provisions set aside by Italy’s biggest bank increased to €1.08bn from €823m, following a deterioration in borrowers’ ability to repay loans.
Assets under management stood at €222bn at the end of June, up by 0.3% from the end of 2011 and down by 4.4% from the previous year.
Assets under administration and in custody amounted to €184bn, down by 0
5.7% from June 2011.
“In the light of the positive revenue performance in the first half of the year, operating performance for 2012 is expected to remain broadly stable, net of last year’s non- recurring items,” the bank said in the statement.
Meanwhile, Italy’s second bank UniCredit posted today a 67% decrease in second-quarter net profit, mainly caused by provisions on loan-loss provisions set aside for the worsening economic situation in the country.
UniCredit reported a €169m net profit at the end of June, compared to a net profit of €511m a year ago.
Loan-loss provisions stood at €1.90bn, compared to €1.18bn in the same quarter of last year.