UBI Returns to Quarterly Profit After Year-Ago Intesa Writedowns
Net income was 63.2 million euros ($80 million) in the third quarter after a loss of 69 million euros a year earlier, when the Bergamo, Italy-based lender wrote down its stake in Intesa by 109 million euros. Earnings beat the 42.9 million-euro average estimate of 9 analysts in a Bloomberg survey.
Chief Executive Officer Victor Massiah is cutting 1,600 jobs and selling assets to strengthen finances and increase profitability as Italy’s third recession in a decade forces banks to boost provisions against rising bad loans. UBI said it expects “sharply lower” recurring operating costs this year.
Loan-loss provisions increased to 160.3 million euros in the third quarter from 135.1 million euros a year earlier. UBI’s core Tier 1 capital ratio, a measure of financial strength, was at 10.49 percent at the end of September, up from 10.24 percent at the end of June.
The shares fell 1.3 percent to 2.83 euros at 9:17 a.m. in Rome. They’ve declined 10.6 percent this year, giving the company a market value of 2.6 billion euros.
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