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UniCredit profit rises 22.6% YOY in best Q1 since 2007

UniCredit SpA posted a 22.6% year-over-year increase in profits for the first three months of the year, which the Italian lender said was its best first quarter since 2007.

On the back of lower write-downs on loans and provisions, the bank's net profit attributable to the group rose to €1.11 billion in the first quarter from €907 million a year earlier. Adjusted return on tangible equity stood at 8.9% in the period, compared to 7.0% a year earlier.

Net interest income amounted to €2.64 billion in the period, compared to €2.66 billion in the first quarter of 2017. Net fees and commissions reached €1.75 billion, compared to the year-ago €1.70 billion. Net trading, hedging and fair value income fell 19.0% on a yearly basis to €478 million.

Net write-downs on loans and provisions narrowed year over year to €496 million from €766 million, while other charges and provisions widened to €519 million from €463 million.

UniCredit's fully loaded common equity Tier 1 ratio stood at 13.06% at March-end, compared to 13.60% at the end of 2017 and 11.45% at the end of March 2017. The lender aims to achieve a CET1 ratio of between 12.3% and 12.6% by 2018-end. The transitional CET1 ratio was 13.13% as of March-end, which the bank said is well above the capital requirement.

The bank said it will accelerate the full rundown of its noncore portfolio to 2021 from 2025 previously, adding that the implementation of its "Transform 2019" plan is fully on track.

"At the start of its second year, Transform 2019 is ahead of schedule and yielding tangible results, such as 78% of the agreed branch closures and 75% of [full-time equivalent job] reductions already having been achieved, with costs decreasing as planned," CEO Jean Pierre Mustier said.