UniCredit SpA (UCG), Italy’s biggest bank, said first-quarter profit rose 59 percent after costs declined and it set aside less money for bad loans.

Net income increased to 712 million euros ($980 million) from 449 million euros a year earlier, UniCredit said in a statement to the Milan stock exchange today. Earnings beat the 509.3 million-euro average estimate of seven analysts surveyed by Bloomberg.

Chief Executive Officer Federico Ghizzoni, 58, is cutting costs and reducing riskier assets at UniCredit as the European Central Bank reviews lenders across the continent before taking over banking supervision in November. The bank posted a record 15 billion-euro loss in the fourth quarter as it increased provisions for non-performing loans and revalued companies it acquired.

“We remain positive on UniCredit given the group restructuring potential, the clearer capital situation and the lower level of balance sheet risk,” Azzurra Guelfi, an analyst at Citigroup Inc., wrote in a May 9 report.

UniCredit rose 1.8 percent to 6.34 euros at 2:08 p.m. in Milan trading. The stock has advanced 54 percent over the past 12 months.

(Source: Bloomberg)