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The biggest Italian bank, UniCredit, posted on Friday a 2012 net profit of 865 million euros ($1.13 billion), as it bounced back from a loss of 9.2 billion euros one year earlier.
Figures for the fourth quarter told a different story however, as UniCredit reported a loss of 553 million euros in the last three months of 2012 owing to a high level of provisions against risky loans, compared with a profit of 114 million euros in the fourth quarter of 2011.
Analysts polled by Dow Jones Newswires had pencilled in a much smaller 2012 fourth quarter loss of around 193 million euros.
A UniCredit statement said that for 2013, "due to the unprecedented difficult macroeconomic environment, financial projections will be revised," without giving details.
It did say however that because interest rates were expected to remain low, "a yearly downward trend in net interest income is expected in comparison to 2012."
The bank also expected to slightly reduce its provisions against possible loan losses however, following "conservative coverage enhancement done in the fourth quarter of 2012," when it booked 9.6 billion euros in provisions.
UniCredit said that it has raised its core Tier 1 ratio - a widely watched measure of a bank's ability to resist unexpected financial shocks - to 10.84 percent, and said its board would propose a dividend of .09 euros/share.