MILAN-- UniCredit SpA Tuesday said its first-quarter net profit fell 21% after it was hit by a one-off charge related to the restructuring of the lender's Austrian and Italian units. Italy's largest bank by assets posted a first-quarter net profit of EUR406 million ($462.6 million) compared with EUR512 million a year earlier. Revenue stood at EUR5.48 billion, down from EUR5.75 billion for the first quarter of last year. Analysts polled by FactSet expected the bank to report a net profit of EUR258 million and EUR5.48 billion in revenue for the quarter. UniCredit's shares accelerated after the results, gaining more than 4% before falling back. Shares were up 0.2% in afternoon trading The bank's shares have lost 40% since the beginning of the year, while Italian banks have shed 35% over the same period amid concerns about the health of the sector, which is burdened by roughly EUR200 billion gross bad loans. Last November the bank doubled down on a strategic plan aimed at averting a new round of capital funding, saying it would cut as many as 18,200 jobs mainly in Italy, Germany and Austria. The bank's common equity Tier 1 ratio--a measure of the bank's capital solidity--declined by nine basis points to 10.85% from the last quarter of last year. Without the one-off restructuring charges net profit for the quarter would have been above EUR640 million, the bank said "The implementation of our strategic plan is on track: we already achieved tangible results in terms of cost reduction and we are progressing well in the digital transformation of the bank," the bank's Chief Executive Federico Ghizzoni said in a statement. However, all revenue streams posted lower results in comparison with the corresponding quarter of last year. These were offset by lower costs, especially provisions for bad loans--one of the main problems afflicting Italy's largest lender by assets. Net interest income dropped 3% to EUR2.88 billion from the same quarter last year. Fees and commission were down 3.4% from the same period of 2015. The bank is pushing to generate higher fees and commissions to compensate for dropping proceeds from its lending activity, which has been severely hit by low and negative interest rates. Net trading income declined by 42% to EUR362 million for the quarter, as market turbulence took a tool on most local banks' first-quarter earnings. The decline in revenue was compensated by lower provisions for bad loans, which dropped by 23% to EUR755 million, from the same quarter of last year. This decline mirrors an improvement in the bank's bad loans exposure, with net impaired loans standing at EUR38.1 billion, down 7% from the first three months of last year. Operating costs declined by 4% to EUR3.29 billion, largely as a result of branch closures and personnel cuts. Write to Giovanni Legorano at giovanni.legorano@wsj.com
Unicredit - 1Q16 net profit of €406m ($462m), down from €512m ($583m) YoY, due mainly to restructuring costs in Italy and Austria which were €259m ($295m); however, it beat forecasts due to lower costs and falling loan loss charges. The results may provide welcome relief for its CEO Federico Ghizzoni who is facing investor discontent and talk of possible management changes due to a weak share performance and lower earnings than Intesa Sanpaolo.