No capital increase in sight for Ubi Banca, but a net profit of 730 million euros in 2019 and 870 million in 2020. In the meantime, this year's dividend will be at least equal to last year's, while in terms of cuts in 2017 there will be 2.750 redundancies. Within the next four years, 280 branches will be closed, but 1.100 new workers will also join. Furthermore, within a year the Single Bank should see the light of day. These are the main innovations that emerged today from the presentation of the new business plan for 2019-2020.
"We don't need a capital increase”, said the managing director Victor Massiah, specifying that among the objectives there is also the passage of the fully loaded Cet1 from 11,6% at the end of 2015, to over 12% in 2019 and to 12,8% at the end of 2020. end of XNUMX, "essentially thanks to the generation of profits over the period of the plan".
The new plan estimates a growth of operating income from approximately €3,4 billion in 2015 to €3,6 billion in 2019 and €3,8 billion in 2020, “largely attributable to the different funding mix” of further containment of operating costs, from €2,3 billion in 20153 to approximately 1,98 billion euros, and the strong generational turnover.
The latter provides the exit of around 2.750 resources and the entry of around 1.100 over the period of the plan, with strong training program and increased flexibility. Without forgetting the “rationalization of the distribution model, which will see the closure of 280 branches over the period of the plan” and the progressive reduction in the cost of credit.
Consequently, the net profit in 2019 will be around 730 million with a Rote of 9,4%, while in 2020 profit should amount to over 870 million with a Rote of 10,6%.
On the front coupon, Ubi Banca expects the payment of a dividend in 2016 at least in line with that of 2015 given that the Cet1 will remain well above the Srep requirement. At the same time, in anticipation of earnings growth, the new industrial plan includes the distribution of dividends with a pay-out constantly higher than 40% on the profit for each financial year and a unit dividend in constant growth throughout the plan period.
As for the creation of the Single Bank, with the merger by incorporation of 7 network banks into UBI Banca, should take place within the first half of 2017. Once fully operational, gross savings will be over 80 million euro, to which must be added the tax benefits on the transfer of intra-group dividends. The repurchase of the minority shareholdings in the network banks was agreed with the Foundations to be carried out mainly through the exchange of the shares held by them with newly issued shares of UBI Banca, with a benefit in terms of fully loaded CET1 of approximately 30 basis points.
"We are happy with the past, but it is time to move on to the Single Bank", said Massiah, highlighting that "the Bank is solid, it has created value among the best in the five years of the previous plan which raised the level of mass productivity, but there are also spaces to improve profitability”.
Meanwhile, in Piazza Affari the title of Ubi is targeted by sales, like the entire banking sector. At the beginning of the afternoon, the institute's shares collapsed by 6,89%, to 2,406 euros. The reduction of Citigroup's target price from 4,9 to 3,3 euro also weighs on the stock, despite the fact that the new target price is also well above the current prices.
