Reuters: Financial Services and Real Estate: UniCredit's Bank Austria 2011 net falls 71 pct

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UniCredit's Bank Austria 2011 net falls 71 pct Mar 28th 2012, 08:00 Wed Mar 28, 2012 4:00am EDT * FY net down 71 pct at 209 mln euros * Net op profit up 13 pct to 1.73 bln * Net writdowns and provisions 1.35 bln VIENNA, March 28 (Reuters) - Net profit at UniCredit unit Bank Austria fell 71 percent in 2011 as impairments in eastern Europe, writedowns on Greek debt and bank levies eclipsed higher operating profit, emerging Europe's biggest lender said. It released results a day after its Italian parent eked out a fourth-quarter net profit as it sought to turn the corner after a massive clean-up of its balance sheet. Bank Austria generated a net profit after minorities of 209 million euros ($278.4 million), even though net operating profit rose 13 percent to 1.73 billion as lending volume advanced 3.7 percent and deposits grew 4.4 percent. Net loan writedowns and provisions fell by more than a quarter to 1.35 billion. But it booked goodwill impairment charges of 737 million euros, mainly on banking subsidiaries in Kazakhstan and Ukraine, and wrote down Greek government debt by 396 million. Bank levies in Austria and some other countries in central and eastern Europe cost it 148 million. Its core Tier 1 capital ratio rose to 10.55 percent of risk-weighted assets at year's end from just over 10 percent a year earlier. Chief Executive Willibald Cernko described the year as divided into a good first half, driven by economic recovery, and a second six months, hit by the European debt crisis, Greece's financial woes and the start of an economic slowdown. It gave no outlook in a statement ahead of a news conference. After the 2011 writedowns - including a 47 million hit for CJSC Securities Russia that reduced to zero the goodwill for this unit - Bank Austria values its equity investments at a conservative 1.2 times book value on average, it said. "The impairment test recently completed shows that the current value of the entire portfolio of equity investments in central and eastern Europe is significantly higher than the total carrying amount," it added. ($1 = 0.7506 euros) (Reporting by Michael Shields) Link this Share this Digg this Email Reprints

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