(Adds earnings details, targets, CEO comments)

   By Pietro Lombardi 
 

UniCredit SpA's (UCG.MI) fourth-quarter net profit rose far above expectations as the bank reported an extraordinary positive tax effect.

Net profit for the period was 1.73 billion euros ($1.97 billion) compared with EUR801 million a year earlier, UniCredit said Thursday.

Even excluding the one-time, non-cash tax effects of EUR887 million related to the adoption of the IFRS9 accounting standards, the lender's net profit stood at EUR840 million, exceeding expectations of a net profit of EUR719 million, according to a consensus forecast provided by the bank.

On an adjusted basis, net profit grew 20% on year for the quarter and 7.7% for the year.

"UniCredit has delivered a record performance in 2018, with the best results in a decade," Chief Executive Jean Pierre Mustier said.

The 2018 results include large additional provisions for U.S. sanctions, the bank said, but in a call with journalists Mr. Mustier declined to quantify these provisions.

Net operating profit for the year rose 13% and was the best since 2018, the bank said.

In the final quarter of last year, revenue fell 1% on year to EUR4.86 billion. Operating costs declined 2.7% and loan-loss provisions rose 11%.

The results comes as the bank enters the final stretch of its strategic plan, with the bank set to present its new strategy in December. On Wednesday, it announced a reshuffle of its senior-management team in preparation for the new plan.

The bank said it will propose a dividend of EUR0.27 per share, down from EUR0.32 in 2017.

The bank confirmed its 2019 revenue target of EUR19.8 billion and net profit target of EUR4.7 billion and said it expects 2019 operating costs of EUR10.4 billion.

Mr. Mustier said the bank's plan was well ahead of schedule.

 

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

 

(END) Dow Jones Newswires

February 07, 2019 02:59 ET (07:59 GMT)

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