MILAN: Italy’s No.2 bank UniCredit on Wednesday raised its 2022 profit goal above 4.8 billion euros ($4.8 billion), helped by higher interest rates and lower loan loss provisions which also drove earnings above expectations in the third quarter.

UniCredit posted a profit for the July-September period of 1.71 billion euros, well above an average forecast of 1.00 billion euros in an analyst consensus provided by the bank.

With the Italian economy heading towards a recession due to Europe’s energy crisis, analysts had expected more than five times the 84 million euros in loan loss provisions UniCredit booked in the quarter.

UniCredit, which under Chief Executive Andrea Orcel is pursuing a strategy focused on capital generation, said its core capital stood at 15.41% of assets at the end of September, compared with 15.73% three months earlier.

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UniCredit, which has failed to extricate itself from Russia where it runs a top-15 lender, had already improved its 2022 guidance in July, indicating a net profit target of around 4 billion euros for the year.