The distribution to shareholders of at least 16 billion euros, between cash dividends and share buybacks for the period 2021/24, thanks to revenue growth, cost savings and investments. It is with this business card that he presented himself to the analysts this morning Andrew Orcel. And the market's response certainly didn't disappoint the manager who at the time was renamed the "Cristiano Ronaldo of bankers": at 11 and 5 minutes, just after the presentation of "Unicredit unlocked” the stock was trading on the Stock Exchange after various stops at 12,80 euros with an increase of almost 11% around the end of the morning, confirming his charisma towards the operators to whom he promised “a strong organic generation of capital, capable of guaranteeing a significantly higher and progressively growing shareholder remuneration over the period of the plan while maintaining or exceeding a robust Tier One ratio of 12,5-13%”.
“I am happy to present our new plan which sets the strategic imperatives and financial objectives of our journey towards a new season of growth and value creation – began the company head – Our pan-European network of 13 leading banks and the plurality of talents within the Group will be united by a common raison d'être: to give our communities the levers for progress”. To achieve the goal Unicredit will rely on technology and an organizational model in which all key competencies will be brought back to the centre.
“We are investing – he underlined – in the digital and data sector and in our business, putting customers back at the center, defining a new way of working for our employees and pursuing a low-capital-intensive model with sustainability integrated at all levels”. “With this strategy – he added – we will achieve significantly higher and progressively growing returns for our shareholders, growing our business and maintaining a solid capital position”. 'This plan – he concluded – is not limited to the short term, but also prepares us for long-term success and stability, beyond 2024. I am proud to guide UniCredit through the next phase of growth and value creation for all our stakeholders and I know that we will win, in the right way, together'.
But here it is the action plan starting from the focus on the geographical areas on which the group's efforts will be concentrated by connecting 15 million customers and 87.000 employees of 13 banks and 4 geographical macro-areas in Europe – Italy, Germany, Central Europe and Eastern Europe.
The main role in the strategies of the manager, at the helm of Unicredit since last April XNUMXst, will be covered by digital transformation with 2,8 billion euros employed in Digital & Data and 2.100 net hires in addition to 1.500 hires (900 in Italy) in the business, according to a note, for a total of 3.600 net new hires. To those who asked him for more details on the outgoing staff, since the rumors speak of 3.000 cuts, he replied: “I cannot give details on the cuts, because we are in discussions with the unions. Obviously there will be a reduction in staff, but also hiring” which, however, will be concentrated on new types of professional figures to make the bank more efficient with these new skills.
In this regard, the plan includes the increase in the use of qualified internal personnel for activities hitherto entrusted to external partnerships with the aim of bringing back key skills and professionalism within the company, with a lower unit cost and greater productivity, reducing by two thirds the UniCredit's recourse to high-cost external companies between now and 2024. Orcel stressed at the press conference that the banking group has a complicated network of insurance arrangements and is therefore rationalizing and selecting two-three main partners.
The goal for 2021 is the distribution of 3,7 billion to shareholders with a cash dividend equal to 30% of the underlying net profit and buyback for the remainder. The cash dividend for 2022 is expected at 35% of net profit, while for the following years it will be "at least 35%" with the remainder in buyback. The net profit will exceed 4,5 billion euros at the end of the plan, for one expected annual growth over the period of the plan is 10%. To those who asked him about the generous distribution to shareholders, the source of a more contained increase in revenues, Orcel pointed out that he had "never been in agreement with a distribution solely linked to net profit" and that savings and investments over the period of the plan to achieve greater capital generation. “I have no problem distributing the capital generated each year,” he added.
Lastly, the plan is based solely on organic growth, even if Orcel, having filed the failure of the negotiations for the purchase of Mps, has carefully avoided excluding any M&A. “I can't rule it out and I can't plan it – he said in the press conference – We have a plan that can generate a lot of organic value, this is the starting point and on which we are focused. It's my job explore opportunities, if they emerge, but I want to be very clear: we will evaluate opportunities that respect three parameters. The first is it strategic fit, the second is strengthening our franchise and the third is sustaining or growing our distributions to shareholders, throughout the plan and beyond. These will be the criteria both for potential acquisitions in Italy and in any other part of Europe”.
In the meantime, the market is applauding: at 13 pm Unicredit deals at 38 euros, +12,79%.
