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UniCredit said it planned to distribute about €10bn to investors this year after beating earnings expectations in the three months to March and strengthening its capital levels.
The Milan-based lender said on Tuesday that its net revenue climbed to €6.3bn in the first quarter, driven by income from higher interest rates — up 10.9 per cent compared with the previous quarter.
Net profit over the period hit €2.6bn, above the €2bn consensus provided by the company and an increase of 24 per cent year on year.
UniCredit now expects full-year profit to be above €8.5bn — an improvement on a previous forecast of a result “broadly in line” with the previous year, of €8.6bn. The bank also said its distribution guidance for 2024 of about €10bn would be in line with last year’s, when it paid out its full net profit to investors. The lender had previously planned to distribute up to 90 per cent.
The distribution, subject to regulatory approvals, will be a mix of cash dividends, including the €3bn paid in April, and share buybacks, including the €1.1bn executed last month.
Its core tier equity capital — a key measure of a bank’s financial strength — also beat expectations, rising to 16.2 per cent of risk-weighted assets. At the end of last year it stood at 15.9 per cent.
UniCredit said it would either “deploy or return its excess capital to shareholders by 2027”.
Chief executive Andrea Orcel, who secured another three-year term at the helm of Italy’s second-largest lender last month, said UniCredit “started the year on [an] extremely strong footing . . . with a resounding beat [of estimates] across all key lines”.
Orcel also underlined the bank’s improvement in fee revenue. Fees climbed by 15.8 per cent over the period, rising to €2.1bn.
UniCredit’s Russian business also posted a net profit of €213mn over the quarter, up from €99mn in the first quarter last year.
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