Italy's biggest bank UniCredit today reported its highest fourth-quarter profit in a decade, topping forecasts thanks to a robust increase in fee and interest income.
Net profit came in at €801m, compared with analysts' average forecast of €523m, according to a consensus provided by the bank.
For the whole of 2017, the bank made a net profit of €3.7 billion before one-off items and its chief executive said this year's figure would be higher as the bank's turnaround progressed following the financial crisis and a deep recession.
Returning to a cash dividend for the first time in five years, UniCredit plans to pay investors 32 cents per share.
UniCredit lost €11.8 billion in 2016 due to a balance-sheet clean-up under new CEO Jean Pierre Mustier, paving the way for the bank to rid itself of €16 billion of bad loans.
To offset the hit, it raised €13 billion euros in capital early last year.
After one-offs, including the sales of asset manager Pioneer and Polish unit Bank Pekao, 2017 net profit was €5.5 billion, ahead of analysts' mean forecast of €5.2 billion.
Mustier said this year's net profit would be between the 2017 adjusted figure of €3.7 billion and the €4.7 billion the bank is targeting in 2019.
The bank said its core capital stood at 13.02% after taking into account the boost from completing the bad loan disposal and the hit from writedowns it plans to book to take advantage of the introduction of the IFRS9 accounting rule.
The rule allows lenders to avoid booking losses stemming from its first-time adoption in their income statement.
