Thanks to the solid capital position Unicredit has decided to advance almost a third of the buyback scheduled for 2023.
The institute in Piazza Gae Aulenti announced in a note this morning “its intention to launch a slice of the program buyback of own shares 2023 for a maximum of 2,5 billion".
He explains: “The company benefits from high levels of capital and best-in-class organic capital generation, supported by consistently high financial performance, solid asset quality and a structurally lower cost of risk.”
“This – continues the note – has positioned the company in an optimal way to face periods of macroeconomic uncertainty and allows it to to anticipate part of the share buyback planned for 2023." The stock on the stock exchange reacts positively: before 10 am it was trading at 22,65 euros, up by 2,70%.
Planned buyback of 2023 billion in 6,5
UniCredit recalls that “the objective of distribution total for 2023 is at least 6,5 billion against 5,25 billion in 2022, which translates into a total return of over 16%“. This “underlines UniCredit's commitment to achieving attractive and sustainable returns for shareholders, while preserving capital strength”.
Il Cet coefficient 1 of the bank, considering this buyback tranche, is equal to 15,8 % to the second quarter of 2023. The start of the tranche is obviously "subject to approval by the company's shareholders at the extraordinary shareholders' meeting which will be called for 27 October 2023 with a specific notice which will be published shortly, as well as approval of the supervisory authority,” says the institute.
Orcel: I hope we can do small M&A, but no conditions today
Meanwhile today the CEO of UniCredit, Andrea Orcel, speaking at the 28th Bank of America financials CEO conference, clarified the institution's position regarding possible M&A. “There's a lot of noise about acquisitions and it's reasonable because we actually look at a lot of things, but if the terms aren't right we won't move,” he said. “Between an M&A operation with execution risk and the distribution of capital to shareholders at the moment, unfortunately or fortunately, the choice is obvious,” in favor of the distribution, he added. “I hope that with the uncertainties and the trend of the economic cycle at a certain point the opportunity will open up to make small additional acquisitions (“bolt-on M&A”) in the core markets, in particular in Central and Eastern Europe,” he concluded.
