UniCredit, Italy's biggest lender, posted a 2011 net loss of €9.21 billion after having written down the value of its holdings.
The bank saw its net profit slump 64.5% in the final quarter of 2011 to €114m but this still beat forecasts of €70m.
The company had made a net profit of €1.32 billion in 2010.
Its revenues also fell 3.4% from 2010 to €25.2 billion last year and its gross operating profit dropped 9.4% to €9.7 billion.
However, the results satisfied investors, with UniCredit's share price jumping 3% on the Italian stock market. UniCredit said in a statement that its earnings were "resilient" considering "a very challenging economic and global environment."
UniCredit surprised the markets in November 2011 by unveiling a massive net loss of €10.64 billion for the third quarter due to the writedowns.
Italy entered recession in the second half of 2011 and Prime Minister Mario Monti has launched several reform efforts aimed at boosting growth.
