Italian bank reveals record loss

<p>UniCredit’s stocks rose six per cent on the back of the news.</p>

The share price of UniCredit rose yesterday (March 11th) despite the bank announcing a record low in its latest financial results.

Italy's largest bank revealed it is going to cut 8,500 jobs in a bid to improve its financial situation, which included the record annual loss of 14 billion euros (£11.7 billion).

With European regulators planning to carry out an industry-wide health-check in the next few months, it will be vital UniCredit can get its house in order and boost its financial position before that takes place later in the year. Some 13.7 billion euros was put aside by the company to cover losses from bad loans in 2013.

Stocks in the company rose by six per cent on the back of the announcement, perhaps as analysts had expected the results for the full year 2013 to be even worse than they were.

Brighter future

UniCredit's chief executive, Federico Ghizzoni, stated that he believes the bank has now "turned the page" and will be able to enjoy a brighter future as a result of climbing away from rock bottom. He said: "We could have staggered the losses over several years. We decided to take them all in one year. I am serene. We have done more than what will be required."

The losses announced by UniCredit are among the worst revealed by any bank in Europe since the start of the global financial crisis, which badly affected institutions around the continent. The knock-on impact of the crash also hit banks hard and many are still struggling with the after-effects of the recessions caused in many European countries.

After yesterday's six per cent rise in its share price, stocks in Italy's biggest bank are up again in the early stages of trading this morning. By 08:09 GMT, the share price in the bank were up by 0.78 per cent and still rising as the session continued. Stocks were at 6.47 and closing in on the company's 52-week high of 6.54.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.