Unicredit brand is seen displayed on this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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MILAN, June 8 (Reuters) – UniCredit (CRDI.MI) is well placed to face up to volatility in Italian authorities bonds, the group’s finance chief stated on Wednesday, dismissing considerations concerning the impression of a latest widening in spreads with German debt.
The premium Italian bonds pay over safer German Bunds hit a two-12 months excessive this month, at greater than 2 share factors, because the European Central Bank (ECB) strikes to tighten its extremely-free coverage, which has been a specific enhance for indebted southern European international locations.
As massive holders of home authorities debt, Italian banks are uncovered to falling bond costs, which might deplete their capital buffers.
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However, UniCredit Chief Financial Officer Stefano Porro stated on Wednesday the group had booked greater than 55% of its 41 billion euros ($44 billion) in Italian authorities bonds amongst property “held to collect” (HTC).
The HTC accounting classification of bonds prevents swings of their market costs from consuming into lenders’ capital ratios.
Speaking on the Goldman Sachs’ twenty sixth yearly European Financials Conference in Rome, Porro stated a ten foundation level widening within the asset swap unfold of Italian bonds shaved solely 2 foundation level off UniCredit’s core capital ratio.
“In terms of sensitivity … not an important one,” he stated. “And we’re not expecting to have any meaningful changes in the exposure, neither in the investment portfolio as a whole nor in the Italian government portfolio.”
Porro stated he didn’t anticipate a structural widening in Italian bond spreads, stressing international buyers held solely a fifth of the general debt and the ECB stood prepared to counter unwarranted fragmentation in funding circumstances amongst euro zone international locations.
Asked concerning the impression of upper rates of interest on the financial institution’s asset high quality, the CFO stated that shut to 30% of the financial institution’s company mortgage e book in Italy consisted of state-assured loans.
($1 = 0.9314 euros)
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Reporting by Valentina Za
Editing by Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
UniCredit well placed to weather Italian debt volatility – CFO & More Latest News Update
UniCredit well placed to weather Italian debt volatility – CFO & More Live News
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UniCredit well placed to weather Italian debt volatility – CFO & More News Today
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