Italy's UBI Banca saw net profit fall 75 percent in the first half as revenues fell, the bank said on Saturday.
Consolidated net profit was 125.9 million euros ($180.8 million), also penalised by fiscal treatment of adjustments to loans, UBI Banca said in a statement. Normalised net profit was 130.4 million euros, down 68 percent.
The Core tier 1 ratio was 7.24 percent versus 7.09 percent in December. For the second quarter, net profit was 101.592 million euros compared with 299.916 million euros a year ago.
The unfavourable economic context is expected to continue and it will have repercussions on both income generation and the valuation of risk for the banking sector as a whole, the bank said. (For UBI Banca), net interest income will continue to be offset by the evolution of market interest rates.
At the operating cost level, staff costs were expected to rise slightly compared to the first half but continue to reduce on an annual basis.
First-half operating income fell 10.9 percent to 2 billion euros, as a result of the performance of net interest income and commissions and lower dividends received due to the tough climate -- partially offset by trading and hedging activity.
Net interest income fell 7.9 percent to 1.348 billion euros, while net commissions fell 19.1 percent to 507.4 million euros.
Net impairment losses on loans amounted to 395.2 million euros, up from about 153 million euros a year ago.
(Editing by Mike Peacock)