Unicredit obtained "'record results for the nine months of 2023,” with “the XNUMXth consecutive quarter of quality growth.” The bank announced this when presenting the results at the end of September. But it is not the only news that emerged today: Unicredit has in fact made it known that will not pay the tax on extra profits, allocating, in accordance with the rules approved by the Meloni Government, the 1,1 billion to the reserve.
“At a time of great uncertainty in Europe, we are not only focused on delivering strong results today, but also on protecting future ones by investing in our product factories, people and technology. This investment will create a solid foundation for continued financial excellence… Our fundamentals are stronger than ever and we are on track to realize our ambition to become the Bank of the Future in Europe,” he said the CEO of Unicredit, Andrea Orcel
Unicredit's results
Unicredit closed the first nine months of 2023 with a Net income accounting amount of 6,7 billion, an increase of 67,7% compared to the same period of 2022. In the third quarter alone, profit rose by 35,9% to 2,3 billion, compared to the 1,9 billion expected from the.
Going back to the nine months, even i revenues recorded strong growth, reaching 8,1% (+24,7%) with interest margin to 4,7 billion (+66,7%) e commissions to 3,1 billion (-6,2%).
Good news also arrives on the front operating costs, down 1,9% to 2,9 billion, per a report cost/income dropped to 39% in the third quarter.
From the point of view of capital solidity, the coefficient Cet 1 it stood at 17,19% "net of the dividend of 2,3 billion accrued in the nine months and the 2022 share repurchase of 3,34 billion, supported by an organic capital generation of 9,9 billion in the nine months ”, explains the bank. In the period the return on tangible capital (Rote) was 21,7%.
“Unicredit has delivered another excellent quarter, generating a net profit of more than 2,3 billion and earnings per share (eps) growth of 54% year-on-year,” commented Andrea Orcel, underlining that the bank continues to differentiate itself “across all key financial metrics, with a strong focus on high-quality risk-adjusted revenues, cost discipline and maintaining high asset quality. Our Cet 1 ratio of 17,2% gives us operational and strategic flexibility that few can match, while our RoTE of 18,3%, or 23,4% based on a Cet1 ratio of 13%, is extremely solid. We are gradually harnessing the full power of our commercial network and all geographies are recording profitable growth".
“We were able to obtain these results thanks to the industrial and cultural transformation of UniCredit. Starting from a diverse collection of thirteen institutions, we have evolved to become a single group working in harmony – and with access to 15 million customers and 13 markets in Europe. We are moving towards the next phase of our transformation, which will allow us to further strengthen our capabilities and make our financial results even more solid,” added the CEO.
Unicredit raises the 2023 target on interest margin, 6,5 billion to shareholders
Unicredit has improved its financial guidance for 2023 again, forecasting net interest margin of at least 13,7 billion (it was 13,2 billion in June), which translates into net revenues above 22,2 billion (from 21,5 billion). The institute has instead confirmed the net profit targets of at least 7,25 billion and a distribution to members of at least 6,5 billion, guidance also reiterated for 2024.
Responding to a question, the bank's CEO Andrea Orcel admitted that perhaps there would be room to adjust the profitability guidance and returns to shareholders, but he considers it "premature" even if "this does not mean that (the guidance, ed.) will remain the itself."
The institute is evaluating further investments to accelerate growth and therefore at the moment it has not yet been decided how much of the further growth in revenues will pass to net profit, which in any case will be "'well above” 7,25 billion, Orcel added.
“Generous distribution of capital” to shareholders
After the Alpha Bank operation, Unicredit confirmed the objective of a "generous distribution of capital to shareholders, recurring and sustainable,” said Orcel, adding that: “We have always said that we are continuing to create excess capital, to be used either to further increase distribution or to buy earnings at multiples that we deem convenient,” he explained: It is exactly what we are doing now with the acquisition of Alpha's Romanian subsidiary. Furthermore, the transaction does not change the focus on the use of excess capital, which continues to 'depend on opportunities'.
Unicredit does not pay the tax on extra profits, 1,1 billion in reserve
UniCredit “has opted to contribute 1,1 billion to the so-called extraordinary tax on banks in 2024, allocating it to own non-distributable reserves”. The institute announced this when presenting the results of the 9 months.
The rules established by the Meloni Government in fact provide that banks can decide whether to pay a rate of 40% on the amount of the interest margin for the 2023 financial year which exceeds the same margin for the 10 financial year by at least 2021%, or to allocate non-distributable reserve an amount equal to two and a half times the tax. The bank in Piazza Gae Aulenti has chosen the second option.
It is, Orcel explained in the conference call, the “more rational” and “coherent” choice with our strategy which has led to the strengthening of the bank's reserves quarter after quarter despite a generous distribution of capital to shareholders".
Unicredit aims for 1,2 billion in additional commissions from product factories
Unicredit's strategy is "aimed at increasing commissions by approximately 1,2 billion at full capacity through the factories produced taking advantage of the next phase of the digitalization plan and strengthening our distribution capacity,” the bank said. During the conference call the CEO highlighted that "our product factories were practically destroyed, now they are solid and among the best".
