UBI Quarterly Net Rises 82% Beating Estimate on Higher Revenue

Unione di Banche Italiane SCPA, Italy’s fifth-largest bank, said second-quarter profit almost doubled on higher income from lending and trading.

Net income rose to 48.1 million euros ($64 million) from 26.5 million euros a year ago, the Bergamo-based bank said in a statement today. That beat of the 34.1 million-euro average estimate of eight analysts surveyed by Bloomberg News.

Chief Executive Officer Victor Massiah is reducing costs and steering clients toward more lucrative products as stricter measures of bank-health and record-low interest rates squeeze margins. UBI is one of the 15 Italian lenders included in the European Central Bank’s region-wide review of bank balance sheets. The regulator is looking at how banks value their assets and whether they can withstand shocks to the industry, part of an effort to prevent another financial crisis.

Revenue rose 3.5 percent from a year earlier to 882.5 million euros boosted by a 6 percent increase in net interest income, a 4 percent gain in fees and 10 percent increase of income from trading.

UBI’s common equity Tier 1 phased-in ratio, a measure of financial strength, rose to 12.7 percent as of June 30 from 12.2 percent at the end of March. Loan-loss provisions rose to 230.5 million euros from 226.2 million euros.

UBI shares rose as much as 4.6 percent and were 1.6 percent higher at 5.59 euros as of 11:28 a.m. in Milan trading, giving the lender a market value of about 5 billion euros. The shares are up 13 percent this year, compared with a 5.2 percent decline in the benchmark Bloomberg Europe Banks and Financial Services Index in the same period.