UniCredit , Italy's biggest bank by assets, returned to profit in the first quarter of 2014 thanks to lower loan loss charges after last year's massive balance-sheet clean up, it said on Monday.
UniCredit, the first top Italian retail bank to give results for the first quarter, said its net profit came in at 712 million euros ($979 million), well above an analyst consensus forecast of 550 million euros. Net profit in the same period of last year stood at 449 million euros.
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The bank had posted a shock 14 billion-euro annual loss in 2013, the biggest ever for an Italian lender, after sweeping clean its balance sheet in preparation for a sector-wide health check by European regulators.
That strategy appeared to pay off in the first quarter, with bad loans falling for the first time since 2008, by 1.3 percent quarter-on-quarter.
Loan loss charges - which are in any case seasonally weaker at the beginning of the year - fell 28.5 percent from a year earlier.
The bank said its Common equity Tier 1 ratio, a measure of financial strength, stood at 9.5 percent compared with 9.3 percent at the end of December.
(Reporting by Silvia Aloisi; Editing by Lisa Jucca)