UniCredit lifts its profit goal after a 24 per cent quarterly earnings rise
Italy’s UniCredit reported third-quarter net profit of 3.3 billion euros, a 24 per cent increase from a year earlier, as revenue rose and costs declined. The bank raised its full-year profit ambition to well above 11.5 billion euros before extraordinary charges. Its board also approved a 4.5 billion euro interim dividend, with payment planned for November.
Economics & Markets··Evening
Profit reaches 3.3 billion euros
Italy’s UniCredit posted third-quarter net profit of 3.3 billion euros, up 24 per cent from a year earlier and 12 per cent from the previous quarter. The bank increased its full-year profit ambition to well above 11.5 billion euros before extraordinary charges. The earnings increase and higher annual goal accompany its preparations for the Commerzbank transaction.[1], [2]
Quarterly revenue rose 12 per cent year on year to 6.9 billion euros. Core revenues accounted for 90 per cent of the total. Net interest income grew 8 per cent from a year earlier and 5 per cent from the preceding quarter, while fees and net insurance income rose 11 per cent annually.[1]
Lower costs accompany stronger revenue
Costs fell 1 per cent year on year, bringing the cost-to-income ratio to 32.8 per cent. Quarterly return on tangible equity reached 25.5 per cent. Together, the revenue and expense figures show how the bank generated more earnings while reducing the share of income absorbed by its operating cost base.[1]
Net profit for the first nine months totalled 9.4 billion euros. The financial review put annual growth for that period at 7.3 per cent; UniCredit said the increase was 16 per cent after excluding the previous year’s positive one-off. Loan loss provisions for the nine months came to 587 million euros. The cost of risk was 17 basis points, and the net non-performing exposure ratio stood at 1.4 per cent.[1]
Board approves an interim dividend
The board approved a 4.5 billion euro interim dividend on 8 November. Payment of 3.0034 euros per share is planned for 25 November. UniCredit’s core capital ratio, a measure of its core capital position, was 15.0 per cent after deducting a 4.75 billion euro share buyback relating to the previous financial year and 7.3 billion euros in accrued nine-month shareholder distributions.[1]
The bank expects the remaining permissions for the Commerzbank transaction by late November. The transaction timetable depends on receiving all necessary regulatory approvals and meeting the offer conditions. The raised profit ambition is stated before extraordinary charges, preserving the bank’s qualification on the annual goal.[1]
