In the 9 months Unicredit recorded a Net income of 7,7 billion euros, up 16% compared to the same period last year and the board of directors has resolved a interim dividend 2025 for a total cash amount of 1,44 billion euros. In addition, the bank has revised upwards the target 2024: net revenues estimated at 24 billion and profits over 9 billion, reads the note from the bank in Piazza Gae Aulenti.
Fifteenth consecutive quarter of growth
Just in third quarter the useful is 2,5 billion, up 8% and above estimates of 2,2 billion: this is the fifteenth consecutive quarter of growth.
The group led by Andrea Orcell also has raised the guidance for 2024 net profit, increasing it to over 9 billion euros, or approximately 10 billion adjusted. The distribution for 2024 is confirmed in line with 2023.
I Net revenues grew 2,6% year-on-year in the third quarter, supported by commissions for 1,9 billion, up 8,5% compared to the previous year thanks to the'customer activity, and from a interest margin resilient equal to 3,6 billion euros. The Costs have further reduced, bringing the ratio costs/revenues below 37% in the nine months. The quality of the active with a cost of risk of 15 basis points in the third quarter and approximately 1,7 billion of overlay. The coefficient Cet1 remains solid at 16,1% despite the impact of strategic investments, supported by a record organic capital generation of 3,5 billion.
Improves 2024 guidance: net profit above 9 billion
Unicredit has also improved the Financial guidance for 2024: the one on net revenues was increased to approximately 24 billion, from above 23 billion, while the one for theNet income has been increased to over $9 billion from previous guidance of “over $8,5 billion.”
Dividend Policy: Interim Payment in 2025 and then Increase to 50% of Profit
The bank has set aside 7,7 billion for distribution in the nine months, or 100% of net profita cash dividend advance of approximately 1,4 billion, in addition to the buyback of own shares of 1,7 billion already underway. Theinterim dividend 2025 (relative to the 2024 financial year) is 0,9261 euros per share. Comparing the unit amount to the reference price of the share at the closing of last November 5 (42,84 euros), the result is a yield (dividend yield) equal to 2,16%The dividend will be detached on Monday 18 November 2024 and paid from 20 November.
Starting from the 2025 results, the bank aims to increase the 40% cash dividend 50% of net profit. “It is clear that we have rebuilt our ability to transform, adapt and excel, supported by a clear, coherent and essential strategic vision – explains the CEO Andrea Orcell in a note. “As a demonstration of our confidence in our sustainable and quality growth, we will increase our dividend to 50% of net income from 2025 onwards, up from 40% currently, given the strength of our earnings and organic capital generation. Over the cycle, we will continue to demonstrate solid profitability and excellent distributions.”
Unicredit denies Commerz's fears, Orcel: "All options open"
UniCredit CEO is prepared for any eventuality regarding the Commerzank dossier. “During the quarter, we used part of our excess capital and made an investment in Commerzbank which might or might not lead to a complete combination” explained Orcel. “This is in line with our disciplined approach to inorganic options, which we continue to evaluate according to stringent financial criteria, while maintaining optionality for the future. Our daily priority remains our commitment to accelerate our undisputed leadership in the sector and to achieve our organic growth ambitions.”
During the presentation of the results as of September 30th to analysts, Unicredit also dedicated space to the strategy in Germany, describing the situation of Unicredit and Commerzbank and responding to the fears about a possible acquisition of the German bank. The institute in Piazza Gae Aulenti has underlined “the'high geographical complementarity” with Commerzbank, which sees the two customer bases “reinforcing each other across all key segments and regions with minimal overlap.” The bank then cited nine “concerns raised” and denied them all, recalling the greater solidity of the balance sheet compared to Commerzbank and the low exposure to Italian government bonds. As for the fears for theoccupation, the bank stressed that “although industry trends imply that some difficult decisions will be required, UniCredit is known for managing them constructively with employee representatives, both in Germany and across the group”. A merger, therefore, would not put any of Commerzbank's key stakeholders at risk, especially since “all the relevant decisions of Unicredit Germany are taken in Germany".
In any case, the two options for the future of the share are those already announced: "Increase the investment maximizing the value for shareholders", or "sell the stake, hopefully with a significant capital gain".
On the Commerz operation, the CEO of Unicredit also gave an interview to CNBC, stating that "If Commerzbank or any other acquisition adds value it is a great thing, if not we will move on to something else, but everyone will have to take their responsibilities for what happens next,” he said, adding that he was “confident that what happens next will be a positive thing for us,” he noted.
“This is going to be a long road. There is a lot of speculation about what will happen tomorrow, but it is going to be a long road because there is a long regulatory period, because Commerzbank has to go through the process of realizing what it wants to do, and 'for the time being they believe they can go it alone,'” Orcel concluded.
Orlopp's response
UniCredit's approach to Commerzbank "is not what you would normally expect if you really wanted to do it in a friendly way," Commerzbank CEO Bettina Orlopp said in an interview with Bloomberg TV. The manager explained that she will "focus on our strategy, which is very successful," while waiting for UniCredit to decide whether to launch a takeover bid.
“We have a new shareholder and that has created a lot of attention,” Orlopp added during the conference call following the financial statements. “I would like to emphasize that everything we do, we do in the interest of our shareholders, our customers and our employees” and “looking at the nine-month figures, I think it is fair to say that we have delivered what we promised.”
Commerzbank accounts
Commerzbank also published its third quarter accounts, closed with a Net income of 642 million euros, down 6,1% compared to the figure of 684 million euros of the previous year. The result beat expectations, which predicted a profit of 529 million euros. Looking at the nine months, the revenues increased slightly to 8,2 billion euros (from 8,1 billion), with net commissions up 4% to 2,7 billion euros and the interest margin to 6,3 billion (+0,1%).
Il Cet1 ratio stands at 14,8% and is estimated at around 15% at the end of the year. As for the outlook for the entire financial year, Commerz confirmed the target of a net result of around 2,4 billion euros but raised the target for net commissions ('over +5%') and interest margin to 8,2 billion euros (from the previous 8,1 billion).
