Monday March 25th, 2019 8:41AM

Iran sanctions, Turkish write-down hit UniCredit profit

By The Associated Press
Related Articles
  Contact Editor

MILAN (AP) — The Italian bank UniCredit said Thursday that third-quarter profits dropped 99 percent due to one-off provisions to cover any settlement for alleged U.S. sanctions violations in Iran and a write-down on its Turkish unit.

Net profits fell to 29 million euros ($33 million), from 2.8 billion euros in the same period last year. It put aside 741 million euros mostly to cover any potential settlement with the United States, and recorded an 846 million-euro write-down on its Turkish bank, Yapi Kredi.

CEO Jean Pierre Mustier said U.S. settlement talks were still ongoing, but he expected no significant impact beyond the amount provisioned. UniCredit has been under investigation in the United States since 2012 over whether past operations involving Iranian companies were in breach of U.S. sanctions.

Excluding the provision and other charges, net operating profit rose 24 percent to 1.5 billion euros on strong commercial activity. Net interest income rose by 7.2 percent on higher loan volumes to 2.8 billion euros while fees and commission earnings rose 2.5 percent to 1.6 billion euros. Trading profits were down by more than a quarter to 277 million euros as client activity was lower amid an unfavorable market environment.

Mustier said, not taking into account the one-offs, "we would have had a blow-out quarter and the best for the last 20 years of the bank. We use it to adjust, and put everything behind us and move forward."

The bank acknowledged a difficult macroeconomic situation, including pressure on Italian government bonds as the government clashes with the European Union over its big spending plans. UniCredit holds 57.9 billion euros in Italian government bonds, about 48 percent of its total sovereign exposure.

Its core Tier-1 ratio, a key measure of a bank's health, dropped to 12.1 from 13.8 percent last year. The bank lowered its Tier-1 ratio forecast to a range of 11.5 percent to 12 percent, from around 12.5 percent previously. The bank also cut its revenue forecasts to 19.7 billion from 20.1 billion euros.

The bank's shares closed down 3.8 percent, at 11.35 euros, on the Milan Stock Exchange.

In a demonstration of confidence, the bank announced after markets closed that Mustier would invest 600,000 euros in the bank's shares and another 600,000 in capital raising instruments, for a total equivalent of his annual gross salary.

"I think it is important on my side to show confidence not only in Unicredit, but also in Italy," Mustier told investors earlier in the day.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News
© Copyright 2019
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Williams runs wild, Texas A&M routs NC State 52-13 in Gator
Trayveon Williams ran for 236 yards and three touchdowns, smashing a 30-year-old school record and carrying No. 21 Texas A&M to a 52-13 victory against beat North Carolina State in the Gator Bowl
11:09PM ( 4 days ago )
Harden's 43 points, triple-double lead Rockets over Memphis
James Harden had a triple-double of 43 points, 10 rebounds and 13 assists to lead the Houston Rockets to their fifth straight win, 113-101, over the Memphis Grizzlies on Monday night
10:53PM ( 4 days ago )
Deadline passes without Russian turnover of data to WADA
Deadline passes without Russian turnover of data, samples to WADA
10:43PM ( 4 days ago )
Associated Press (AP)
US stocks end dismal, volatile year on a bright note
Wall Street closed out a dismal, turbulent year for stocks on a bright note Monday, but still finished 2018 with the worst showing in a decade.
9:52PM ( 4 days ago )
Animal advocates: Fatal zoo mauling shows need for crackdown
Animal welfare advocates say fatal mauling of intern illustrates need to crack down on unaccredited exhibitors
9:36PM ( 4 days ago )
The Latest: House Dems unveil plan to re-open government
House Democrats have unveiled a package of bills that would re-open the federal government without approving funding for President Donald Trump's border wall with Mexico
9:31PM ( 4 days ago )
AP Business
Court extends detention for Nissan ex-chair Ghosn by 10 days
The Tokyo District Court said Monday that former Nissan chairman Carlos Ghosn will be detained at least through Jan. 11
11:12PM ( 5 days ago )
Gains, growing pains mark California's 1st year of legal pot
California's legal marijuana market remains a work in progress as it enters its second year
9:41PM ( 5 days ago )
California's year of legal pot a mix of gains, growing pains
California's legal marijuana market remains a work in progress as it enters its second year
4:13PM ( 6 days ago )
AP Business - Corporate News
Airports seeing rise in security screeners calling off work
The Transportation Security Administration has acknowledged an increase in the number of employees calling off work during the partial government shutdown.
9:17PM ( 9 minutes ago )
Film critics choose 'The Rider' as best picture of 2018
The National Society of Film Critics has chosen Chloe Zhao's "The Rider" as best picture of 2018
8:24PM ( 1 hour ago )
Iowa State drubs No. 5 Kansas 77-60
Marial Shayok scores 24 points as Iowa State routs No. 5 Kansas 77-60 for its 5th straight win
8:12PM ( 1 hour ago )
Former Defense Secretary Harold Brown dies at 91
Former Defense Secretary Harold Brown, who guided American military during the Carter administration, dies at 91
7:46PM ( 1 hour ago )
Luck has 2 TDs to lead Colts over Texans 21-7 in wild card
Andrew Luck threw for 222 yards and two touchdowns as the Indianapolis Colts raced out to a big lead and cruised to a 21-7 win over the Houston Texans in the wild-card game on Saturday
7:41PM ( 1 hour ago )