UniCredit feels the prolonged recession: profit down 50%

UniCredit Tiriac, a top ten player controlled by one of the most powerful European groups, has seen its first-quarter net profit cut in half, to almost 16 million euros, because of the 150% increase in loan-loss provisions, amid the extension of recession.
"The market context was difficult for the banking system, with Romania remaining in recession in the first quarter. The credit risk continued to rise, fuelled by the large number of cases of non-payment among companies," says Rasvan Radu, chief executive of the bank. Calculated in line with local accounting standards, the net profit amounted to 61 million RON (almost 15 million euros), compared with 64 million RON according to IFRS.
In the first quarter of 2009, the bank set up 23 million euros in loan-loss provisions, compared with 9 million euros in the same period of 2009.
This is the largest quarterly volume of provisions set up by the bank.
The bank's operating profit fell by 9% to 41 million euros amid constant operating costs - 34 million euros, but amid a 5% revenue decline, to 75 million euros, especially due to the fall in earnings from treasury operations, which fetched a lot of money last year because of market volatility.