Crises in Greece and Dubai Could Affect Revenues

The revenues of the Italian bank UniCredit could be impacted by the financial crises in Greece and Dubai, the largest Italian bank announced in a document on its website, as reported by Bloomberg.

Recent developments in these markets "could negatively affect revenues arising from trading activities and transactions of the Italian banking group in the capital markets sector," states the prospectus dated January 8, in which UniCredit announces a capital increase of four billion euros. Revenue forecasts were not provided. UniCredit is increasing capital at a time when Europe is slowly emerging from the most severe recession since World War II. To increase capital, the bank’s CEO Alessandro Profumo is also implementing cost-cutting measures and selling non-strategic assets. In the prospectus, UniCredit also announces a capital increase for its branch in Ukraine, which has been decided by other foreign banks due to the significant deterioration of the economic situation in that country, which has led to a sharp decline in gross domestic product and a severe devaluation of the local currency.

In this context, the possibility that UniCredit will implement further capital increases in branches in other non-EU countries in Central and Eastern Europe is not excluded, the document further states. The Libyan Investment Authority and the Central Bank of Libya, which hold a 4.9 percent stake in UniCredit, are among the investors looking to exercise their right to purchase new shares that the bank offered for sale on January 8, UniCredit further announced. The purchase of new shares has also been announced by Fondazione Cassa di Risparmio di Torino, Fondazione Cassa di Risparmio di Modena, Carimonte Holding, and the German Allianz, it is further stated in the document. UniCredit investors in Italy and Germany can exercise their rights to purchase new shares until January 29. UniCredit shares are being sold at an individual price of 1.589 euros and are offered at three shares for every existing 20. (H)