UniCredit BoD Approved Consolidated Results for First Quarter 2011
OREANDA-NEWS. May 16, 2011. The Board of Directors of UniCredit approved the consolidated results for first quarter 2011 which show the Group’s portion of net profit at €810 million, increasing both QoQ (plus152.5%) and YoY (plus55.7%) and reaching the highest level since the second quarter of 2008, thanks mainly to the good trend of operating income and to a strong decline in net write-downs of loans.
In first quarter 2011 operating income rises 7% QoQ to €6,928 million, with all the main components posting a solid performance. With respect to the same quarter of 2010 there is also an increase of 2.7% YoY.
Net interest amounts to €3,884 million in first quarter
Net commissions continue to strengthen gradually in first quarter 2011, rising both QoQ (plus0.6%) and YoY (plus1.5%) to €2,168 million. Commissions from both financing and investment services record an increase QoQ (plus3.7% and plus1.8% respectively), while commissions from transaction services show a decline, linked to seasonality, of 2.9% QoQ.
Net trading, hedging and fair value income amounts to €700 million in first quarter
Other net income amounts to €59 million, compared to €139 million in fourth quarter 2010 and €99 million in the same period of the prior year.
Operating costs in first quarter 2011 amount to €3,858 million versus €3,720 million in fourth quarter 2010 and €3,842 million in first quarter 2010. The increase of plus3.7% QoQ reaches plus1% net of non-recurring items which were particularly high in fourth quarter 2010
In first quarter 2011 payroll costs amount to €2,333 million compared to €2,196 million in the prior quarter and to €2,322 million in the same period of 2010. The quarterly trend, plus6.2% QoQ, is largely explained by non-recurring and variable components, net of which the rise QoQ is marginal.
Other administrative expenses, net of recovery of expenses, in first quarter 2011 are basically stable (-0.1% QoQ) coming in at €1,241 million (compared to €1,243 million in fourth quarter 2010 and €1,240 million in first quarter 2010). Net of non-recurring items, however, there is a marked decline (-5.2% QoQ).
Amortization, depreciation and impairment losses on intangible and tangible assets amount to €284 million in first quarter 2011, compared to €282 million in fourth quarter 2010 and €281 million in first quarter 2010.
The cost/income ratio drops both QoQ (-1.8 p.p.) and YoY (-1.3 p.p.) in first quarter 2011, coming in at 55.7%.
Net write-downs of loans and provisions for guarantees and commitments amount to €1,504 million in first quarter 2011, -14.1% QoQ and -16.0% y/y, with the improvement coming mainly from
Gross impaired loans at the end of March 2011 total €69 billion, showing a moderate increase, of 1.1% QoQ. Gross NPLs rise by 2.1% QoQ, while lower risk categories are substantially stable (-0.1% QoQ).
The coverage ratio of total gross impaired loans at March 2011 is 44.7% (an increase with respect to the 43.9% recorded at December 2010) which reflects a 58.8% coverage of the NPLs (57.5% at December 2010) and a 25.9% coverage of the other impaired loans (26.3% at December 2010).
Net operating profit in the first quarter of 2011 amounts to €1,566 million, a decided increase with respect to both fourth quarter 2010 (plus56.2%) and first quarter 2010 (plus40.8%) thanks above all to the positive trend in operating income and net write-downs of loans.
The provisions for risks and charges total €161 million, in line with the €156 million recorded in first quarter 2010.
Integration costs amount to €3 million in first quarter 2011, compared to €254 million in the previous quarter (related to the One4C plan) and €6 million in the same period in 2010.
Net investment income turned positive in first quarter 2011 (at €84 million).
Income tax for the period amounts to €555 million in first quarter 2011, compared to a positive tax effect in the prior quarter of €509 million (linked to the recognition of a sizeable amount of deferred tax assets) and to €393 million in the same period of the prior year. The tax rate in first quarter 2011 is 37.3%, compared with 38.5% in the same period of the prior year.
Minorities total €107 million in first quarter 2011, up with respect to both the prior quarter and the €63 million reported in first quarter 2010.
The impact of the Purchase Price Allocation continues its gradual decline, coming in at -€15 million, compared to -€30 million in fourth quarter 2010 and -€44 million in first quarter 2010.
In first quarter 2011 the Group’s portion of net profit amounts to €810 million, a significant increase both QoQ (plus152.5% with respect to the €321 million recorded in fourth quarter 2010) and YoY (plus55.7% with respect to the €520 million recorded in first quarter 2010).
The Group’s customer loans reach €559 billion in first quarter 2011, plus0.6% QoQ, with the Corporate Centre posting growth (stemming from the business with Cassa di Compensazione e Garanzia), along with the commercial business in Italy. The Group’s customer deposits are stable QoQ (-0.1%) at €402 billion, as growth in Western Europe is offset by a reduction in CEE, driven by the expiration of a few large short-term positions in fourth quarter 2010.
Securities issued is also stable with respect to December 2010 (-€0.5 billion QoQ to €180 billion). The net negative interbank position in March 2011 rises from the €42 billion recorded in December 2010 to €46 billion. Financial assets held for trading amount to €106 billion in March 2011, less than the €123 billion recorded in December 2010, due primarily to a strong decline in derivatives.
Total assets amount to €911.0 billion at March 2011 (€925.5 billion at December 2010), -2% QoQ but substantially stable net of the mark-to-market valuation of derivatives. The Group’s leverage ratio[2] shows further improvement in first quarter 2011, reaching 20.7 (-0.8 with respect to the 21.5 recorded on 31 December 2010), a level which is more than adequate to support renewed growth in the Group’s core markets.
The Core Tier 1 ratio reaches 9.06% in March 2011, up by 49 bp versus the 8.58% recorded in December 2010, with a positive contribution from the profit generated in the period, net of accrued dividends, and from the decrease of risk weighted assets. The risk weighted assets return to show a decline (-2.4% QoQ to €443.7 billion), due primarily to a reduction of credit risk weighted assets. Market risk weighted assets and operational risk weighted assets also show a decline QoQ.
At the end of March 2011 the Group’s structure consists of a staff of 160,679[3], a further reduction of 1,330 compared to December 2010 and of 1,700 compared to March 2010. The decrease in the quarter is primarily attributable to a decrease in
The Group’s network at the end of March 2011 consists of 9,607 branches (9,617 at December 2010 and 9,637 at March 2010).
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