UniCredit reported a notable fourth-quarter profit beat, marking an essential milestone as it raised shareholder returns amidst heightened attention on its merger and acquisition (M&A) activities. This Italian banking giant saw a full-year net profit increase of 8.1%, totaling 9.31 billion euros. Alongside this financial success, UniCredit pledged to enhance shareholder returns in 2025, elevating its cash dividend payout guidance to 50% of net profit from the previous 40% set for 2024.
The bank aims for a Return on Tangible Equity (RoTE) exceeding 17% over the years 2025-27, following a 17.7% performance in 2024. Despite a slight dip in its Common Equity Tier 1 (CET 1) capital ratio—recording 15.9% from the prior quarter's 16.1%—UniCredit remains at the forefront of Italy's burgeoning consolidation endeavors since last year. Holding a stake in Germany's Commerzbank and extending a takeover proposal to domestic competitor Banco BPM underscores its strategic positioning in the market.
UniCredit's operating costs rose by 9.5% quarter-on-quarter, reaching 2.5 billion euros. Despite this increase, the bank guided for full-year revenues surpassing 23 billion euros by 2025. Over the recent period, revenues reached 6 billion euros, outpacing analyst forecasts of 5.898 billion euros. The group's net profit for the fourth quarter stood at 1.969 billion euros ($2.03 billion).
In a statement reflecting on UniCredit's strategic trajectory, CEO Andrea Orcel asserted their commitment to advancing into the next phase of growth.
"Accelerate our growth, aspiring to further widen the gap with our competitors." – Andrea Orcel
Despite a focus on expansion, Orcel emphasized that any inorganic growth must align with and enhance their standalone case.
"Any inorganic growth must improve our standalone case and meet our strict financial and strategic requirements." – Andrea Orcel
While UniCredit continues to explore new opportunities, it maintains clarity on its strategic priorities, as highlighted by its stance on ventures with Generali Group.
"No strategic interest." – UniCredit
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