UniCredit announced Tuesday what it called its best half-year results in a decade although heightened political risks in Italy could hamper efforts to reinforce a key indicator of the bank's ability to withstand a crisis.
In the period from April through June the bank's net profit climbed by 8.3 percent to 1.02 billion euros ($1.2 billion), a figure which beat analyst expectations by nearly 50 million euros.
But revenue slid 4.3 percent to 4.95 billion, a figure which nonetheless also beat analyst expectations.
Chief executive Jean Pierre Mustier said the first half results, which saw net profit jump 15.3 percent to 2.1 billion euros, were the best since 2008. Investors welcomed the results, with shares in the bank rising 2.8 percent in midday trading while the Milan stock exchange's main index was up 1.1 percent overall.
"The UniCredit team has delivered another very solid set of results in the first half of 2018 despite a more challenging market and geopolitical context," Mustier said in the earnings statement.
He also said: "We remain confident in the European and Italian economy and their strong underlying fundamentals."
However the greater spread between Italian and benchmark German government bonds, the risk premium investors demand to hold Italian debt, did dent a key ratio of UniCredit's capital to its risk-weighted assets.
UniCredit said it planned to keep the ratio between 12.3 and 12.6 percent at the end of this year, and above 12.5 percent at the end of 2015, but added this was at the current risk spread. The bank made progress in reducing its risky assets in the second quarter, with the level declining by 2 billion euros to 42.6 billion.