Arab Today, arab today italy\s unicredit hit by huge losses
Last Updated : GMT 21:53:08
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Italy\'s UniCredit hit by huge losses

Arab Today, arab today

Arab Today, arab today Italy\'s UniCredit hit by huge losses

Milan - AFP

Italy\'s top bank UniCredit announced massive losses of 10.64 billion euros ($14.5 billion) for the third quarter on Monday, triggering a plunge in shares for one of Europe\'s leading lenders. UniCredit blamed the losses on 10.17 billion euros in write-downs \"due to the negative impact of the new macroeconomic and regulatory scenario.\" Excluding the write-down, it said the loss was 474 million euros, still down from a net profit of 334 million euros in the same quarter last year. It also approved a 7.5-billion-euro capital increase and said that by 2015 it would cut 5,200 jobs in Italy -- around 12 percent of its workforce. The recapitalisation will be UniCredit\'s third since the start of the global financial crisis in 2008 after it had to raise fresh funds in 2009 and 2010. The announcement was widely expected as UniCredit was the last big bank in Italy not to announce it would raise capital this year. Following a European Union summit last month, the European Banking Authority estimated that UniCredit needed 7.4 billion euros in new core capital to reach the nine-percent threshold fixed by regulators as the minimum the big banks must have in reserve. UniCredit employs 160,000 worldwide and is a key player in Eastern Europe. It said it had been negatively impacted by \"the effects of the overall slowdown in the global economic environment, coupled with the European sovereign debt crisis and continued significant market volatility.\" UniCredit shares plunged nearly 8.0 percent after the announcement but then recovered some lost ground and were down 4.73 percent in afternoon trade -- one of the worst performers on the Milan stock exchange. \"The group\'s quarterly financial performance was significantly hurt by market volatility, which led to a trading loss and an increase in net write-downs of loans,\" it said. UniCredit said it would not be paying any dividends to shareholders this year and was now expecting a net profit of 6.5 billion euros, also by 2015, compared to 1.32 billion euros in 2010. UniCredit chief executive Federico Ghizzoni told analysts that he was confident Italy would recover after a wave of a market panic over fears that the heavily indebted country could drag down the rest of the eurozone. He said financial market movements did not reflect \"Italy\'s fundamentals\" but rather the political situation, which he said would stabilise with an incoming government led by former EU commissioner Mario Monti. \"Italy is a rich country. It has all the resources to get out of this situation. Doing that depends on us,\" he said.  

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