UniCredit estimates its capital shortfall at 7-8 billion euros ($8-$9 billion) and is looking to plug that gap in coming months through a share issue and asset sales, two sources close to the matter said before the results announcement.
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UniCredit SpA, a globally important bank under pressure to raise capital, said second-quarter profit rose 75 percent on lower operating costs and one-time gains from an asset sale.
Revenues for the quarter grew 7.1 percent year-over-year to 6.1 billion euros.
UniCredit was among the worst performers in European bank tests of the ability of lenders to withstand crisis. But the measure of its financial health was still the fourth-weakest.
Aug 3 Italy’s UniCredit posted a surprise fall in its core capital in the second quarter, hitting its shares and highlighting the challenge facing new Chief Executive Jean-Pierre Mustier as he seeks to bolster the bank’s balance sheet.
The bank said its CET1 fully loaded capital ratio – the benchmark followed by regulators for the amount of funds a bank has available to absorb losses – slid to 10.33 percent at the end of June from 10.85 percent at the end of March.
Even assets considered strategic, namely German subsidiary HVB, its central and eastern Europe operations and corporate investment banking, will be closely reviewed “to ensure an intensified focus on efficiency and asset optimization”.
UniCredit Group (UCG, UNCFF.PK) announced Wednesday that its global services company, UniCredit Business Integrated Solutions or UBIS, and SIA have signed a framework agreement for the sale of UBIS’s card processing activities in Italy, Germany and Austria.
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On Wednesday, its shares plunged by more than 10 cents after the results were announced, but later recovered to a drop of 1.5 percent at 1.82 euros.
