UniCredit runs ahead of forecasts: 9-month profit at EUR 7.7 billion

Unicredit posts record results. In the nine months, net profit was EUR 7.7 billion, up 16% compared to the same period last year. In the third quarter, profit was EUR 2.5bn, up 8% and above estimates of EUR 2.2bn. This is the 15th consecutive quarter of growth. Net revenue growth was 2.6% year-on-year in the third quarter, supported by fees of 1.9 billion, up 8.5% year-on-year thanks to customer activity, and a resilient net interest margin of 3.6 billion.

In light of the sustainability of its performance, UniCredit improved its financial guidance for 2024. The net revenue guidance was increased to around EUR 24 billion from above EUR 23 billion, while the net profit guidance was increased to above EUR 9 billion from the previous guidance of 'above EUR 8.5 billion'.

In light of these results, and against the ambition of an annual net profit in excess of EUR 9 billion in 2025, the bank aims to increase the cash dividend from 40 per cent to 50 per cent of net profit from 2025 results. "It is clear that we have rebuilt our ability to transform, adapt and excel, underpinned by a clear, consistent and essential strategic vision," explained ceo Andrea Orcel in a note. "Demonstrating our confidence in our sustainable and quality growth, we will increase our dividend to 50 per cent of net profit from 2025, up from 40 per cent currently, given the strength of our earnings and organic capital generation. Over the cycle, we will continue to demonstrate solid profitability and excellent distributions."

Free hands on Commerzbank as well. "During the quarter, we deployed some of our excess capital and made an investment in Commerzbank that may or may not eventually lead to a full combination," adds Orcel. "This is in line with our disciplined approach towards inorganic options, which we continue to evaluate according to strict financial criteria, while maintaining optionality for the future. However, our priority on a day-to-day basis remains our commitment to accelerate our undisputed leadership in the industry and to achieve our ambitions of organic growth'.

With respect to the timing of the transaction, the banker cools down any speculation. 'I think there is a lot of speculation about what will happen,' the banker explained in an interview, 'because the road will be long: there is a long regulatory period,' and Commerzbank 'has to realise what it wants to do, plus there are elections in Germany. In fact, 'there are factors that lead us to fear that the road will be long and we will not see a conclusion very soon'. And on the subject of the defensive moves by Commerbank, which has announced its willingness to proceed with a buyback, UniCredit's number one emphasises that if 'the investors (of Commerzbank, ed.) want to accept, it will be fine, if not, we have already shown that we will be able to withdraw'.