Unicredit closes the first quarter with a Net income equal to 1,2 billion euros, up 91,1% on a quarter and 48% on an annual basis (the result does not take into account the activities in Russia). THE Net revenues on the other hand, they stood at 4,7 billion euro, up by 35% on the previous three months and by 7,9% on the year, while the cost/income ratio it reached 47,8%. The interest margin it scored 2,2 billion euros, down 4% on the quarter and up 5,5% on the year. The Bank communicates this in a note, specifying that the quarter "set several records relating to revenues, costs and net profit, continuing with the positive trend achieved in 2021, as proof of the strong commercial momentum of the business areas". Unicredit also has confirmed the repurchase of treasury shares for 1,6 billion euros relating to the 2021 financial year.
The Bank "once again achieved excellent quarterly financial results in all business areas, recording a record on some key financial indicators, demonstrating the intrinsic value and commercial dynamism of the network and people - comments the CEO, Andrea Orcel - The robust organic capital generation has allowed us to maintain a solid CET1 ratio of 14%, even taking into account the buyback of treasury shares for 1,6 billion euros relating to financial year 2021, the dividend accrual and the negative impact of exhibitions in Russia”. During the first quarter of the year, Unicredit also set aside 400 million as part of the dividend for the 2022 financial year.
Loan loss provisions of €1,3 billion, mostly in Russia
During the first quarter of 2022, the group accounted for (prudentially) loan adjustments of €1,3 billion, almost entirely to Russia. “Unicredit is in position di absorb any fallout macroeconomic performance thanks to strong capital strength and asset quality, including sizeable credit adjustment overlays,” reads the note.
Il cost of risk, excluding Russia, between 30 and 35 basis points is confirmed for this year and for the period of the 2022-2024 Strategic Plan. In the first quarter it was close to zero, standing at 5 basis points, with no overlay release.
Second quarter will be important to assess Russia's impact
During the call which followed the publication of the data Orcel, responding to analysts' questions, returned to the topic of Russia. “I think the second quarter it will be important to understand where we are on Russia”. In any case even in a scenario of total zeroing of Russian assets at the end of June, "which we consider extremely unlikely", he added, the impact on CET1 would be limited thanks to the actions already implemented in the first quarter and "from this derives our confidence in the possibility of distributing even the last billion" of buybacks.
Answering a question about the local subsidiary in RussiaOrcel responded, "We will not support our local subsidiary with additional capital or cash."
With Russia, revenues fell by 17,2% year on year
Including Russia and analyzing the group's consolidated results, i Net revenues they were 3,7 billion euros, down 3,3% on a quarter and 17,2% on a year.
Net profit instead it was 247 million euros, down by 62,4% on the previous quarter and by 70,2% on an annual basis. The EPSfinally it was 0,11 euro, -62,1 and -70,3% on a quarterly and trend basis respectively.
CET1 ratio at 14%, above target, including 92 bps from Russian impact
The group CET1 ratio for the first quarter of 2022 stood at 14%, above the 2022-2024 target of 12,5-13%, absorbing 92 basis points of impact already in the first three months of the year on capital linked to Russia (of which 50 linked to the investment and 40 resulting from the application of prudential hedges for around 30% of the net cross-border exposure) and the same buyback of treasury shares for 1,6 billion euro.
UniCredit then confirmed its own for 2022 financial guidance (adjusted for the impact of Russia), and recommitted to the distribution of at least 16 billion euros in the three-year period 2021-2024, considering the base case macroeconomic scenario and the execution of the Strategic Plan.
