STOCK MARKET WATCH -- Wednesday, 12 November 2014

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12. TOP ITALIAN BANKS HEALTHIER AFTER EU TEST

http://hosted.ap.org/dynamic/stories/E/EU_ITALY_BANKS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-11-11-14-35-19

MILAN (AP) -- The recent Europe-wide health check on banks is producing results for Italy, whose top two lenders on Tuesday posted a strong rise in quarterly profits after cleaning up their finances in anticipation of the test.

While nine smaller Italian banks failed the test, putting a negative spotlight on Italy's failure to generate economic growth, UniCredit and Intesa SanPaolo, the country's two biggest banks, passed with strong marks.

Before the test, the two banks cleaned out their books by writing off bad loans, a painful process that seems to be paying dividends. On Tuesday, both reported profits in the three months ending Sept. 30 more than doubling, early signs of recovery in the banking sector.

UniCredit CEO Federico Ghizzoni told an analyst conference call that the test had rewarded `'the strong effort UniCredit has made in the last year to strengthen our balance sheet."