Third quarter data outperformed forecasts Unicredit, denoted as a quarter from record in all sectors. Year-ago comparisons are all clearly positive, but compared to the quarter ending in June, the litmus test of the impact caused by tensions related to conflict and the energy crisis, data are mostly down.
However the group raises the guidance for 2022 and indicates the distribution of a dividend equal to or higher than last year.
Approved yesterday by the Board, the consolidated results of the Unicredit Group for the third quarter of 2022 showed a net profit of 1,7 billion, up 61,6% compared to a year ago including the Russia, or 1,3 billion (+31,1% over the year) excluding Russia, exceeding expectations by around one billion euro. Instead, the quarterly comparison shows net income excluding the impact of Russia down by 9,9 percent. For the first 9 months of the year theNet income is 4,0 billion, excluding Russia, thus exceeding the result for the full year 2021
Revenues up 6,8% year over year, down 2,4% from the previous quarter
Excluding the impact of Russia, the Group recorded Net revenues totaled €4,2 billion, down 2,4 pct QoQ and up 6,8 pct Y/Y, “with client-related business and interest rate dynamics more than offsetting the impact one-time negative related to TLtro III and the impact of market volatility on commissions” said a note from the bank. Excluding the one-time negative impact of TLtroIII i Net revenues amounted to €4,6 billion, up 14,6 per cent on the year with net interest income at €2,2 billion (up 4,8 pct on the year and down 3,2 per cent on the quarter ). Fees at €1,6 billion were down 4,4 percent on a quarter and 1,8 percent on a year.
2022 guidance improves, net profit above 4,8 billion
As promised by the CEO Andrea Orcell, the data allow an improvement of the guidance 2022, with net income exceeding $4,8 billion for the year, excluding Russia, versus $4 billion reported earlier. “2022 earnings momentum, above-plan capital generation and continued strengthening of our balance sheet create a strong foundation for a distribution at least equal to that of 2021, pending the dynamics of the fourth quarter and the approval of Supervisory Authorities and shareholders", he said Orcelduring a conference call. “UniCredit has once again achieved outstanding financial results. This is our seventh consecutive quarter of growth and the best first nine months of the year in at least a decade. We are well ahead of the objectives of the plan, despite the prudent consolidation of the lines of defense” underlines Orcel. “UniCredit Unlocked is paying off: our industrial transformation is in full swing, our results consistently positive and we are further improving our full-year 2022 guidance,” he adds.
According to expectations, the bank in Piazza Gae Aulenti shows an acceleration even greater than that expected for the other major national bank, Intesa Sanpaolo, which will present its accounts in about ten days with forecasts of a net profit of around 820 million.
Cet1 ratio at 15,41 pct, 2022 dividend in line with or better than 2021
The data relating to asset position place Unicredit among the leaders in the sector with CET1 ratio to 15,41 per cent in the third quarter, the second tranche already deducted buyback of own shares of 2021, equal to one billion, net of distribution to shareholders of 3,75 billion relating to the 2021 financial year and of the accrual of dividends equal to 1,4 billion for 2022. “The continued financial momentum lays the foundations for a distribution related to FY 2022 in line or better than 3,75 bn in FY 2021, maintaining a solid CET1 ratio. The Group is ahead of its targets UniCredit Unlocked, with loans for the climate and the environment standing at 8,2 billion and social lending at 3,3 billion in the first nine months of 2022
Exposure to Russia reduced by 50% to €3,1 billion
Unicredit's 'cross border' exhibition towards Russia it was reduced "at minimum costs, overall by 50% to around 3,1 billion euros through proactive and disciplined actions". Thus the group in a note, in which it adds that the bank "is committed to maintaining a progressive derisking approach".
Le net non-performing exposures of the Group amounted to 6,8 billion, down up 1,8 pct on a quarter and 22,8 pct on a year with a relationship between net impaired loans and total Group net loans equal to 1,5 pct, unchanged on quarter and down by 0,5 pp on year. The coverage report on non-performing exposures is equal to 50,4 pct, up by 0,4 pps on a quarter and down by 6,8 pps on a year. The Group's gross non-performing loans thus fell to €3,3 bn, down by 2,6 pct on a quarter and by 51,2 pct on a year.
Unicredit, what to do with respect to Mps?
“The priority in which the whole organization is concentrated e' the execution of the Plan“. So Orcel, during an interview with Bloomberg TV, replied on the hypothesis of reopening talks with Ps once the capital increase of Rocca Salimbeni has been completed. The execution of the industrial plan "is creating billions of value - Orcel reiterates several times - much more than any acquisition and this is what we continue to focus on". Pressed on the M&A front, the CEO of piazza Gae Aulenti clarifies on a general level: "We will not be involved in an acquisition that does not achieve our objectives".
