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Unicredit SpA (BIT:UCG) announced its earnings for the first quarter of 2012 earlier today giving the shares a boost in afternoon trading. Net income at the firm was up 12% year on year to $1.2 nillion in the first three months of the fiscal year. The results left the company up almost 7% on the Italian exchange when it closed earlier today.

Despite the positive reception most of the gains came from the company’s buy back of its own debt. The company, like many of its European rivals is going to great lengths to get its balance sheet in order. The firm bought $3 billion of its own debt in the period at half of its face value. That deal is responsible for almost half of the total earnings in the quarter.

With the buy back removed from the figure income was actually down at the bank for the first quarter by 45% compared to last year. The market is still impressed by the company’s restructuring however and that shows blatantly in the rise it underwent on the market today.

Compared to other European financial institutions the firm places somewhere in the middle though it is smaller than many of the others. UBS (NYSE:UBS), Credit Suisse Group (NYSE:CS) and Deutsche  Bank (NYSE:DB) posted earnings that disappointed their investors. The fall in the investment banking sector was blamed for much of the woes at those banks.

In contrast Barclays plc (NYSE:BCS) and HSBC (LON:HSBA) posted surprisingly high returns and increased their profits in the first quarter by double digits. Those firms managed to do alright in investment banking demonstrating that the effect of the changes in the sector are not causing trouble equally across institutions.

The changes in UniCredit’s balance sheet have put it in line with new regulatory requirements in the European Union and saved the firm’s shareholders a great deal of pain down the road. The firm needs to do more than just restructure itself in order to compete in Europe. Though problems are mounting there are still opportunities for growth.

In the earnings statement the bank said it will be concentrating efforts on central and eastern European markets in order to increase growth and maintain a healthy business. The firm plans to focus on the emerging countries like Russia and Turkey in order to take advantage of their higher growth rate in the sector compared to the financially saturated and stagnant Western European countries.