UniCredit SpA, Italy's largest bank, said Wednesday that second-quarter net profit more than tripled even though its earnings were hit by its exposure to Greek debt.
The Milan-based group said Wednesday that net profit soared to euro511 million ($731 million) from euro148 million a year ago. The rise came despite losses stemming from its holdings of Greek government bonds. Without those losses, UniCredit said it would have posted net profit of euro616 million.
Unicredit took a euro105 million writedown on Greek debt last month.
"We are living in very challenging conditions," CEO Federeico Ghizzoni told a conference call.
A more detailed breakdown of the figures shows that UniCredit's net trading income during the quarter rose fivefold to euro290 million from euro58 million a year earlier. And loan loss provisions dropped 31 percent to euro1.18 billion in the quarter from a year earlier.
Offsetting those gains were a 3.4 fall in net fees and commission to euro2.1 billion and a 1.3 percent decline in net interest dropped to euro3.9 billion.
The bank's Core Tier 1 ratio _ a key measure of capital strength _ rose to 9.12 percent. The bank passed a stress test last month, showing its Core Tier 1 ration would remain above the 6 percent threshold in the worst case scenario.
Unicredit shares rose 3.5 percent to euro1.16 after the results were released. They had dropped earlier in the day by as much as 4.6 percent, to euro1.13, on fears that the debt crisis would spread to Italy.