Milan (AFP) - Italy's UniCredit bank said Thursday it was back in the black in the second quarter with a net profit of 420 million euros ($500 million), a better-than-expected result that nonetheless was down considerably from last year due to the coronavirus pandemic.
A consensus forecast of 19 analysts provided by the bank had expected a net profit of 347 million euros for the April-June period, following a net loss of 2.7 billion euros in the first quarter of the year.
For the first half of the year, the bank logged a net loss of 2.28 billion euros dragged down by the first quarter when the bank already braced for higher losses on loans, as Italy's economy -- its main market -- was one of the first in Europe to shut down to contain the coronavirus pandemic.
The bank also took huge charges during the first quarter as part of a restructuring plan that will see it lower its headcount and the sale of its stake in a Turkish bank.
Net banking income slid by 7.7 percent in the second quarter to 4.17 billion euros, narrowly besting the analyst consensus forecast.
The bank also managed to boost its capital buffer, or CET1 ratio, to 13.85 percent. The ratio is closely watched by investors and regulators as it is an indication of a bank's capacity to deal with losses during a crisis.
UniCredit is no longer providing earnings guidance for this year due to the coronavirus pandemic, but confirmed its 2021 target of between 3.0 and 3.5 billion euros in underlying net profit.
"We saw the first signs of a commercial recovery at the end of (the second quarter) as economies began to open up across most of our core markets," the bank's chief executive Jean Pierre Mustier said in a statement.