Italy’s biggest bank, UniCredit (BIT: UCG), had a disappointing first-quarter as profits fell. Core capital grew to 10.35%, but net profits fell by nearly a third. The net profit on the quarter was 512 million euros, or $576 million. During Q1 of 2014, the company had a net profit of 712 million euros.
Impaired loans dropped by 1.4% on the quarter, down to 83.2 billion euros.
Investors are watching the bank closely, and fears among investors in the Italian bank are evident as the company’s stock dropped 3% on the news.
The CEO of the company, Federico Ghizzoni, states that there are signs of recovery for the bank. Federico states that investment quality and capital position have improved.
Expectations for the company were in-line with the Q1 release. Net operating margins were good, but investors are worried that the bank is weaker than Intesa (BIT: ISP).
Ghizzoni was asked in a conference call with analysts what the company will do to boost revenue and profits. He states that the company is looking into disposals, but will not sell HVB, which is a German unit that the bank acquired in 2005.
Revenues on the quarter reached 5.7 billion euros, with Italy contributing 2.2 billion in revenue.