UniCredit rambles payout aim of nearly 40% following the record earnings

February 1, 2023: On Tuesday, UniCredit pledged to return 5.25 billion euros to investors based on its 2022 results, hiking one of the ambitious payout targets from European banks after publishing its best profit in over a decade.

The Italian bank stated that the net profit started at 2.46 billion euros in the three months from December, over twice an average forecast of 1.10 billion euros from analysts polled by the bank.

“The year has gone very well,” CEO Andrea Orcel told on Tuesday following the results.

“Particularly given that we began the year on the back foot with the envision of Ukraine. We made the position correct, and we refocussed, and then little by little, clawing back all the reach we got in Q1, and we finished the year on a high.”

The lender is paying out 3.75 billion euros to investors in 2021, resulting in dividends and share buybacks.   

UniCredit said it anticipated posting a net profit in 2023 broadly in line with 2022, which includes its Russian business after it had excluded this from its profit goal in the previous year after Russia invaded Ukraine.

It aims for a profit distribution aim for 2023 in line with 2022.

Shares in the lender were 7.7% increased by 8.45 a.m. London time following the results.

UniCredit still needs to extricate itself from Russia, where it owns a top 15 lender.

The bank said its core capital increased 16% in the last quarter from 15.41% at the September-end.

When considering its latest distribution plans, which are subject to shareholder approval and supervisory approval for the buyback area, pro-formal core capital was 14.9%, still well over its target of 12.5-13.0%.

UniCredit stated that income from its core lending activity bounced 38% from the prior quarter and 43% from almost a year, as tighter monetary policy widened the gap amid rates banks charge on loans and those they pay to advance funds.

That drove quarterly revenues to 5.72 billion euros, above a 5.12-billion-euro average forecast.

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