Higher interest rates helped UniCredit (CRDI.MI) strongly beat earnings expectations in the second quarter. Germany's financial regulator BaFin has been calling on banks to raise the amount of money they set aside for bad loans. Deutsche Bank on Wednesday said provisions for bad loans nearly doubled in the second quarter from a year earlier to 401 million euros. Santander's financial chief said bad loans in Brazil may have already peaked. This sent the bank's shares up around 2% on Wednesday, with Jefferies saying that it sees upside potential to net interest income.

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Persons: Ralph Orlowski, Lloyd's, Andrea Orcel, BaFin, James von Moltke, UniCredit, Jefferies, Tom Sims, Jane Merriman Organizations: Germany's Deutsche Bank, REUTERS, Deutsche Bank, Lloyds Banking Group, Lloyds, JPMorgan, Monetary Fund, European Central Bank, Union, Thomson Locations: Frankfurt, Germany, MILAN, MADRID, Europe, Spain, Santander, Brazil