It was the best quarter ever, beating analyst forecasts. Unicredit closed the first quarter of this year with a Net income of 2,062 billion, almost tenfold compared to 274 million a year ago, when it had to write down the subsidiary in Russia. The political consensus of analysts stopped at 1,308 billion.
I Net revenues grew by 56,5% year-on-year to €5,8 billion, driven “by commercial momentum across all core business lines” says a note from Gae Aulenti's Group, with NII of €3,3 billion and commissions for 2 billion.
“The record first quarter net income was achieved on the back of double-digit growth in net revenues, supported by extremely strong net interest income and further cost reductions, which generated positive operating leverage,” said the CEO Andrea Orcel.
New guidance for 2023: net profit over 6,5 billion
On the basis of these data, the Group led by Orcel has raised the guidance 2023: Net income of over 6,5 billion e distribution greater than or equal to 5,75 billion euros (from the previous 5,25 billion), “which sets a new baseline for 2023 and beyond,” says the Unicredit note. The bank also improved its guidance on margins (NII) of over 12,6 billion.
Operating costs and non-performing loans are down
Operating costs at 2,327 billion were down by 5,8% over the quarter and by 0,6% compared to 2022, against expectations for 2,398 billion, and impaired loans were also down sharply at 12,602 billion (-29,2%) .
Cet 1 at 16,05%, up 2,1% compared to 2022
In terms of capital solidity, the Cet 1 ratio at 16,05% it is 2,1% higher than that of 2022, while expectations were for 15,25%.
After the approval of the buyback of treasury shares for 2022 for 3,34 billion, the first tranche of approximately 2,34 billion was launched, while the second tranche of approximately 1,0 billion is expected for the second half of 2023. As of April 28, 2023 UniCredit has purchased 50,78 million shares, equal to 2,62% of the share capital. “We have continued to organically generate a high amount of capital which has allowed us to be among the leaders in the sector with a Cet 1 ratio of 16,05%, already considering the entire distribution relating to 2022 of 5,25 billion and the cash dividend set aside in the first quarter equal to 0,7 billion”, he said again Orcel.
Orcel: We will maintain a steady growth in profitability. Difficult macro scenario expected
“While remaining vigilant, we are also confident that we can continue to guarantee growth in the near future profitability constant and of high quality, with a structurally reduced cost base and cost of risk”, says the CEO of Unicredit, Andrea Orcel, commenting on the results for the quarter. At UniCredit we have planned one difficult macroeconomic scenario and we have prepared by strengthening our defense lines and taking preventive actions in order to safeguard our future performance.
“We are delivering on our clear commitment to creating value for our shareholders by gradually ramping up cash dividends and share buybacks to further strengthen future shareholder returns,” the statement said.
Scale back activities with Russia
In the last year, the business in Russia have been resized and refocused with a narrowing of the local business and a significantly reduced non-local exposure through a proactive, progressive and orderly de-risking approach which has made it possible to reduce the exposure by 68% since March 20228, equal to 4,2, XNUMX billion at minimal cost.
The At1 bond will be repaid in advance
In recent days Unicredit has announced that will refund in advance the 1 billion euro AT1,25 bond on June 3, after the Credi Suisse case. The At1 bond (Isin XS1619015719) was issued in May 2017 and was of the "perpetual" type, with a coupon of 6,25%.
