It was a record quarter for Unicreditfrom different points of view. The group saw in the second quarter a accounting net profit in the second quarter amounted to 2,0 billion, double the expectations of analysts questioned by the same bank for 996 million. They had been 274 million at the end of the first quarter, due to the write-downs on the stake in Russia, which instead contributed about 500 million of net profits this quarter thanks to the strength of the rouble. L'exposure to Russia was reduced by approximately €2,7 billion, while Russia's Risk Weighted Assets (“RWA”) were reduced by approximately €2,7 billion.
“Unicredit rests on solid foundation, which put us in a good position to navigate whatever macroeconomic juncture awaits us. Making sure we remain resilient and resilient will enable us to fulfill our responsibilities to customers, communities and all stakeholders, supporting them through the challenging times ahead,” he said Andrea Orcell, CEO of Unicredit.
Il CET1, which indicates the capital position, is at 15,73 per cent in the second quarter, with 67 basis points of organic capital generation, up 173 bps Q/Q and up 22 bps Y/Y. Profitability is above the cost of capital with high risk-adjusted returns in all geographies and a Group RoTE at 13,0 per cent excluding Russia, up 2,6 pp Q/Q and up 5,3 pp Y/Y. The first six months of this year recorded a total profit of 2,28 billion, says a note from the banking institute, noting that it is the sixth consecutive quarter of profitability growth and the best first half for at least ten years.
Confirmed distribution of dividends for 16 billion in the three-year period 2022-2024
Orcel during the conference call presentation of the quarterly accounts confirmed the objective of distributing to shareholders at least 16 billion in the period 2022-2024. “We are confident that we can distribute an amount equal to or greater than that of 2022 for 2021,” she said. THE accrued dividends during the first quarter they amounted to 900 million.
During the call Orcel also paused to comment on the current political situation, after the resignation of Mario Draghi and the dissolution of the chambers. “The strong one Draghi's credibility and his charisma they certainly helped both Italy and Europe to present a united front in the face of war. That said, I don't think these responsibilities rest with just one man and I hope that Italy will continue to have a leadership role in shaping European politics”. Orcel then said he was "confident, despite the fact that it is a difficult time for our country, that the new government will ensure stability and that no government will take responsibility for derailing the Pnrr". The CEO then said that he is convinced that the next budget law will be "consistent with the past" also given the tight deadlines to approve it after the September 25 elections. “Italy has very solid fundamentals and at Unicredit we are confident in our task of supporting a strong economy and helping families and businesses”.
Assembly convened on 14 September, ECB asked ok for new buyback
Closed on July 14th first tranche of the 2021 buyback of treasury shares, for a value of 1,6 billion, equivalent to 7,4 per cent of the share capital, the Board of Directors requested authorization from the ECB to start the second tranche of the buyback for a billion. He therefore announced the convening of the Ordinary and Extraordinary Shareholders' Meeting for the next one September 14th.
Net income, including Russia, grew over 100% QoQ, 94,5% YoY
In detail, the Group excluding the impact of Russia, the Piazza Gae Aulenti institution recorded a net profit of €1,5 billion, up 24,4 per cent Q/Q and up 66,6 per cent a/a. The Group's net book income, also excluding Russia, amounted to 1,7 billion, up by 39,8 percent on the quarter and by 73,9 percent on the year. If instead we include Russia - which includes the bank and local legal entities, plus the cross-border exposures accounted for in Unicredit - the Group's net book income in the second quarter amounted to 2,0 billion, with growth exceeding at 100 percent on a quarter and 94,5 percent on a year, the note said.
“Unicredit continued to deliver strong second quarter results, delivering its best first half performance in 10 years, driven by growing profitability, solid organic capital generation and cost base reduction despite the impact of inflation. Our CET1 ratio strengthened further to 15,73 per cent, reflecting the excellent quality of assets, with a cost of risk of only 10 basis points, excluding Russia. On the back of our excellent performance and a more favorable interest rate environment, we have improved our guidance for 2022, an important step in the implementation of the three-year plan. Orcel.
Unicredit raises guidance (excluding Russia): net profit to 4 billion
La new guidance of Unicredit, excluding Russia, predicts Net revenues over 16,7 billion in 2022 (it was around 16 billion in the March guidance), a interest margin of 9,2 billion, Costs for 9,5 billion, a relationship between costs and revenues of 55%, a Net income of 4 billion (there were over 3,3 billion in the previous guidance), a cost of risk below 30 basis points (was 30-35 basis points) e a Cet 1 ratio above 13% (was between 12,5 and 13%).
Revenues down on quarter, fee reduction weighs
I Net revenues of the Group, excluding Russia, amounted to 4,4 billion in the second quarter of this year down 8,1 percent Q/Q and up 12,5 per cent year over year, while i total revenue, amounting to 4,5 billion, they saw a 6,8 percent decline over the quarter with on the one hand an increase in net interest income (+6,6 per cent Q/Q) and on the other hand a decrease in fees of 6,7 per cent Q/Q, while they increased by 4,9 per cent Y/Q a, with strong performance in net interest income (+11,0 per cent y/y) and positive performance in fees (+1,2 per cent y/y).
Commissions amounted to 1,7 billion (-6,7% on quarter) "mainly due to the effect of investment services and financing commissions, partly offset by higher commissions relating to transactional services" says the note, while they are up by 1,2 percent over the year “thanks to transactional services, especially in Italy.
Instead i operating costs they remained stable at 2,3 billion on a quarter and fell by 4,4 per cent on a year,” as a result of lower personnel costs, above all in Germany and Italy”. The interest margin (NII) stood at €2,3 billion, up 6,6 per cent Q/Q thanks to the “positive contribution of funding, of the favorable trend of treasury and markets, plus days effect” and up 11,0 per cent y/y “as a result of financing, term funding, treasury and markets”. In this way the cost/income ratio, equal to 51,3 percent, it turns out raised by 3,5 pp Q/Q and down 5,0 pp Y/Y.
Unicredit able to absorb any negative macroeconomic effects
La asset quality has improved, with the ratio of gross non-performing loans to total gross loans to 2,8 per cent and the ratio between net non-performing exposures and total net loans to 1,5 per cent. The cost of risk it remains well below guidance at 10 bps, reflecting solid asset quality and historically conservative approach to classification and provisioning. The total overlays remained overall unchanged at around €1,0 billion in 2Q22, “maintaining the Group's ability to absorb any negative macroeconomic spillovers”. The credit adjustments (“LLP”) accounted for at Group level in 2Q22 are substantially close to zero, and negative by €108 million, excluding Russia.
UniCredit sells 49% of CNP Vita Assicura and increases its stake in CNP Unicredit Vita to 45,3%
UniCredit announced today that it has signed a share purchase agreement for the sale
of its total shareholding a CNP Assurances, equal to 49% of the share capital,
held in CNP Vita Assicura SpA (formerly Aviva SpA), an Italian insurance company, for a
price equal to 500 million euros.
UniCredit has also signed a according to contract of sale with CNP Assurances
to increase your own shareholding in CNP Unicredit Vita SpA, i.e. from 38,8%
to 45,3% of the share capital, for a price of 70 million euros, says a statement from the company.
CNP Assurances will maintain in CNP Unicredit Via SpA a stake of majority equal to 51%. The completion of the two transactions, approved today by the Unicredit Board of Directors and subject to the authorization of the authorities, is expected within the end of the year.
It is estimated that operations will have a impact positive of about 10 basis points on capital e
approximately 200 million euros on net profit based on data for the first half of 2022. The decision adopted by the Board of Directors is in line with the strategic plan “UniCredit Unlocked” “aimed at simplifying the current structure of bancassurance activities and increasing strategic flexibility”.
As announced in 2017, the partnership agreement between Unicredit and CNP Assurances
in relation to CNP Unicredit Vita SpA it has a duration of seven years and, therefore, from the end of 2024
both sides will have margins of strategic flexibility in relation to each other
holdings.
