Banks

UniCredit, record quarter: profit at 2.8 billion. "Ops Bpm? No hurry"

Profits up 8.3%: 'Best three months ever'. Orcel: 'Inorganic possibilities, but only if they improve us'

by L.D.

12 May 2025

4' min read

Key points

Numbers
The waits
Extraordinary transactions
The agreement with Google

4' min read

Unicredit accelerates on profitability, posting the best quarter in history (exceeding estimates), and confirms caution on extraordinary operations, to be carried out only if under the right conditions and only if they improve on the stand-alone growth scenario. And on Banco Bpm on which an Ops is underway, says CEO Andrea Orcel, 'we are reviewing it' in the light of 'Anima and Golden Power but we have not yet made a decision, there is no hurry'.

The numbers

In terms of numbers, the group led by Andrea Orcel ended the quarter above analysts' forecasts, thanks to a net profit up 8.3% to EUR 2.8 billion. Revenues are up 2.8% to EUR 6.5 billion. Behind these numbers is above all the performance of commissions, up 8.2% to EUR 2.3 billion, which more than offset the reduction in net interest income, down 4.8% on March 2024, to EUR 3.5 billion.

"UniCredit posted an outstanding set of results in the first quarter, exceeding expectations in all financial metrics and widening the positive gap to competitors. We delivered the best results in UniCredit's history and the 17th consecutive quarter of profitable growth," said CEO Andrea Orcel commenting on the quarterly results. "Such premises make us both confident in raising our guidance for net profit and distribution in 2025 and convinced of our ambition for 2027," he added.

In detail, RoTE increased to 22%, the highest in the industry, with excess capital reaching EUR 10 billion. Cost control remained among the best in the industry, resulting in an expense ratio of 35.4%. Asset quality was solid, with cost of risk at 8 basis points and overlays unchanged. 'Our lines of defence have been strengthened and best position us for a broad spectrum of macroeconomic scenarios,' Orcel recalls in the group's financial results note.

The Expectations

Thanks to better-than-expected quarterly results, Unicredit thus updates its guidance for the financial year 2025, with possible upside: net profit to exceed EUR 9.3bn, with RoTE 17% higher. Distributions to shareholders will be higher than in financial year 2024, due to higher net profit growth. Net revenues for 2025 are expected to be around EUR 23.5bn, better than initially anticipated due to a stronger first quarter and a lower cost of risk. UniCredit confirms ambitions for a net profit of around EUR 10bn in 2027, for a RoTE above 17% and for higher annual distributions than in 2024 in the period 2025-27, including a dividend equal to 50% of net profit and additional distributions inclusive of capital in excess of a CET1 ratio of 12.5-13%. Last February, Orcel had emphasised his 'ambition' for a net profit in 2027 of around 10 billion. At the same time, he had promised 'along with the distribution of excess capital' the goal of 'an annual distribution greater than that on 2024 in the period 2025-2027'.

Extraordinary transactions

With respect to the issue of extraordinary transactions, the bank in Piazza Gae Aulenti is not changing its line: any transaction by external lines will only be done on condition that it is not dilutive to shareholders. 'We are positioned for a number of inorganic possibilities in our markets but will only pursue those that can enhance our strong and resilient standalone investment case,' Orcel adds in the note on the quarterly accounts. The institution, as is well known, is engaged in the Ops on Banco Bpm and is at the same time engaged in the takeover of Commerzbank, of which it holds 28%.

BankBpm

Entering into the specifics of the transactions on the table, Unicredit reiterates that all options remain open, but none can prevail over the stand-alone route, if this were to affect profitability and the return of value for shareholders. On the BancoBpm front, in particular, 'no decision' has yet been taken. "We are evaluating it: when we have more clarity" on Anima and on golden power "we will make a decision, but there is no hurry," he says. On the subject, Piazza Gae Aulenti states that "there is still room to create value, but we are also addressing the requests related to the Golden Power regime, on which we are in dialogue with the government".

Generals

But the Generali and Commerbank dossiers are also in the news. On the subject of the 6.5% stake in the Leone di Trieste, that shareholding is "financial for us, we want to do good for the company and that is what inspires our choices," says Orcel. And on the Commerzbank dossier, the banker states that 'we are exactly where we said we would be; we announced a stake of almost 10%, which we acquired largely from the German government in a transparent and competitive process. We also made that clear to Commerzbank before we acquired the stake. From that point we said that we would go up to 30 per cent and ask for all authorisations. We went up to 30 per cent and asked for the authorisations and almost got them all. We were clear: we are patient, we can wait until 2027 and we will evaluate three things. The exchanges of views with the German government, which is new and with whom we have not yet had the opportunity to speak, the fact whether Commerzbank wants to have constructive, bilateral exchanges of views rather than asking us to make an offer in the dark, Commerzbank's results,' says Unicredit CEO Andrea Orcel, video-interviewed by Cnbc.

The agreement with Google

Also today, UniCredit and Google Cloud announced the signing of a Memorandum of Understanding outlining a 10-year agreement to accelerate the bank's digital transformation. This partnership will see UniCredit take advantage of Google Cloud's 'best-in-class infrastructure, AI and data analytics solutions to simplify its digital architecture and improve products and services across the 13 markets in which the bank operates'.