Italy’s biggest bank, UniCredit, has posted a much bigger-than-expected fall in net profit for last year – down 22 percent.
However much of that was due to losses from its business in Kazakhstan and the underlying results were better than the profit figure implied. Costs were also lower.
The bank, which is the biggest lender in central and eastern Europe, reported net profit of 1.3 billion euros down from 1.7 billion euros the year before. UniCredit’s shares rose.
The result included a goodwill impairment of 362 million euros, almost entirely due to Kazakhstan, with 199 million euros in the fourth quarter alone.
UniCredit bought Kazakhstan’s ATF bank in late 2007 at the height of the credit boom for $2.1 billion. It had to write off more than 500 million euros from the Kazakh bank’s value in less than a year as the credit crunch hit the central Asian country.
UniCredit gave no results for individual countries but third-quarter revenues in Kazakhstan were 32.2 million euros. The bank has said it has no plans to sell its Kazakh operations.