Unicredit closes the quarter with better-than-expected results thanks to higher commissions, solid trading results and a still very low cost of risk, while increasing guidance. But it will only move on the banking risk table if it is advantageous for the institution.
Unicredit's first quarter
Unicredit set another record in the quarter ending in March and once again surprised analysts with results above expectations in all financial areas.Net income is up 8,3% to 2,8 billion, with a earning per share rose 18,2% to 1,79 euros and a dividend per share up 46,3% to 0,89 euros. Rote was among the best in the sector at 22%, or 26% on a CeT1 ratio of 13%, also above expectations.
I revenues rose 2,8% to 6,5 billion, driven by commissions up 8,2% to 2,3 billion which more than offset the reduction in interest margin at 3,5 billion (-2,9%). Trading income, mainly from client activity, provided further support. The cost/income ratio is at 35,4%, down almost one percentage point year-on-year with costs still declining on a like-for-like basis as we continue to invest and grow.
The numbers seem to please the market, with the title that gained 4% at midday at 55,92 euro.
Orcel: We will only carry out the most convenient operations for the bank
The banking risk game remains open, but keeping our eyes wide open, said the CEO of Unicredit, Andrew Orcel, when he commented on the results. “We are positioned for a number of inorganic possibilities in our markets, but will only pursue those that enhance our strong and resilient standalone investment case,” he said, thus implicitly confirming the extraordinary operations on the track, namely the takeover of Commerzbank and the oops on Bpm bank, denying the hypotheses circulating in recent days about a possible step back by the bank. "Inorganic growth offers interesting opportunities pursued only if able to improve Unicredit's exceptional standalone investment case for the benefit of all stakeholders", says the note from Piazza Gae Aulenti.
The number one of Unicredit also referred to a third match, the one on the Lion, reiterating in an interview with Class Cnbc and the participation in Generali "for us is financial, we want to do good for society and this is what inspires our choices."
Orcel on Banco Bpm: “We await clarifications on Golden Power”
Speaking about the offer on Banco Bpm, Orcel stressed: “We are not under pressure to close mergers and acquisitions because our standalone trajectory is already well above” direct competitors. “It is our job to identify M&A opportunities in every market we operate in. We know what they are. Why don’t we close them? When they are in the interest of shareholders, we will close them, otherwise we will not. We are not under pressure on M&A. I am very patient and calm,” Orcel added, “and the board is completely aligned.”
In particular, during the conference call with analysts, the manager mentioned among other things the uncertainties and changes in the'acquisition of Soul by Banco Bpm itself, which led to a “destruction of value between 1 and 1,7 billion” and the “erosion of excess capital”, as well as the need to make provisions of 800 million “to align the quality of Banco Bpm's assets with ours in Italy”: all factors that lead the banker to identify in UniCredit's takeover bid “a premium of between 40% and 50% compared to where they were before the offer”
To further complicate the situation, the government decision on Golden Power. “We have the right to have time to evaluate. There are some elements of the Golden Power that, in our opinion, they are not clear and unwanted, we are trying to clarify them. We need to examine them before making a final decision. If we do not get a clarification, we will have to give our interpretation. When we have all this, we will make a decision. But for the moment - he concluded - we are not under pressure. We are patient and we will wait". The issue was also addressed today by Ue, with spokesman Olof Gill, answering a question from journalists, saying: In general, “the restrizioni fundamental freedoms are permitted only if proportionate and based on a legitimate public interest and, above all, to the extent that they do not violate EU law”. “We have asked Italy for additional information, through the EU Pilot procedure. It is up to the Member States to provide this additional information. And then we need to carry out an assessment to verify whether European law has been correctly applied by the Member States”.
During the conference call, Orcel also referred to the'exit from Russia, on which one of the main conditions imposed by the Executive weighs: Unicredit "continues to implement a clear and disciplined strategy" to exit Russia, he explained. In the presentation slides to analysts, the bank in Piazza Gae Aulenti confirmed a cross-border exposure almost zero, in Russia, at the end of March, and a retail reduced by about 60%, on the verge of exit in an orderly manner by the first half of 2026.
Improved guidance and higher dividend
Unicredit also raised guidance for 2025 (with possible upside): l'Net income is estimated to be higher than 9,3 billion with a RoTE higher than 17%. A distribution of dividends higher than those for 2024 thanks to higher growth in net profit, a note explains. Net revenues for 2025 are expected to be around 23,5 billion, better than initially anticipated thanks to a stronger first quarter and a lower cost of risk. UniCredit also confirms its ambitions for a net profit of around 10 billion in 2027.
"We may raise our guidance further. If we haven't already done so, it's because of the high volatility and uncertainty" present on the market, UniCredit CEO Andrea Orcel said during a conference call on the first-quarter results. "If some of the trends we saw" in the first quarter "are maintained, we will do better" than expected, he added.
Despite the uncertain climate, positive and safe investments
Orcel celebrates with today's data the "best results in UniCredit's history and the seventeenth consecutive quarter of profitable growth," he said. In addition, the institution has posted an extraordinary series of results in the first quarter, beating expectations in all financial metrics and widening the positive gap with competitors.
And it is not too worrying about a “macroeconomic scenario, which has become more complex and uncertain” because even in this context “we present a positively differentiated and resilient investment case, with a high degree of visibility on earnings and distribution, for the benefit of our shareholders and for their safety” underlines Orcel. “These premises make us both confident in increasing our guidance for net income and distribution in 2025, and convinced of our ambition for 2027. We are committed to achieving sustainable and high-quality performance, and focused on supporting our customers and our communities in particular in challenging times”, concluded the CEO.
