How Unicredit will move

How Unicredit will move

All the details on the Unicredit half-year, the next steps of the group and the words of the head of the Mustier company

Unicredit confirms the guidance to 2021 with an underlying net profit for the next year confirmed at 3-3.5 billion euros and underlying RoTE between 6 and 7 percent. In addition, the bank indicates a good position to strengthen the customer base and provide continuous support to stakeholders.

This is what we read among other things in the half-yearly report presented today by Unicredit. Here are all the details and words of the head of the company Jean-Pierre Mustier.


Unicredit closes the first half with a loss of 2.28 billion. The second quarter ended instead with a profit of 420 million, down 77% but above the consensus which indicated a profit of 347 million.


In detail, the underlying net profit of Unicredit is 500 million (1 billion second quarter 2019), with all divisions returning to profitability, except for Commercial Banking Austria.


Revenues amounted to 4.2 billion, down 4.8% quarter on quarter and 7.7% year on year, with the lockdown in core markets for most of the quarter which caused a decrease in commercial commissions.


Net interest income: € 2.4 billion, down 4% quarter over quarter, due to the cut in rates in Central Eastern Europe and the change in the business mix, with the focus on customers with higher ratings.


Commissions amounted to 1.4 billion, down 11.8% year on year, with a recovery started in June 2020, when total commissions were higher year on year for Italy (+6 percent), for Germany ( +11 percent) and for Austria (+2 percent).


As for capital and liquidity, the fully loaded CET1 ratio is 13.85% and the high liquidity coverage ratio is 173%. In relation to state-guaranteed and moratorium loans, Unicredit supported the economy with 35 billion moratorium loans and 7 billion state guarantee loans while maintaining a disciplined approach to risk.


The group is "firmly committed to its disciplined concession", reads the note on the accounts, credit and proactive management of impaired exposures.


The reduction in the Non Core portfolio, scheduled for 2021, continues in line with the expected times, with sales of 0.9 billion in the second quarter despite Covid-19.


As for the distribution of capital, as announced on 29 July, Unicredit confirms that it will comply with the recommendations of the ECB and will not pay dividends, nor will it buy back shares during 2020.


The bank will reinstate the capital distribution policy envisaged in Team 23 starting from 2021, distributing 50 percent of the underlying net profit to shareholders, divided between a cash dividend target of 30 percent of the underlying net profit and repurchases 20% of treasury shares.


There are no m & as planned, Mustier confirmed. The CEO of Unicredit, in the call with analysts, says he is "confident that the ECB will lift the ban on paying dividends next year". Mustier then reiterated that it is the bank's commitment "to restore our capital distribution policy" of the Team 23 business plan "in 2021 starting from the year 2020, including the gradual return of excess capital to the shareholders". The institute is committed to distributing 50% of the underlying net profit to shareholders, divided between a cash dividend target of 30% of the underlying net profit and repurchases of treasury shares for 20%.

Unicredit will give "an update of the Team23 plan by the first quarter of 2021". "Only a few numbers will be updated," explained the CEO in the call with the agencies. The manager then added that "the plan is confirmed".

Finally, a comment on the outcome of Intesa's Opas on Ubi: “Italy needs to have strong banks. The Antitrust Authority asked for our opinion and we said that perhaps it would have been better to have three strong banks rather than two, "Mustier replied to a press conference when asked about the bank's position to the Antitrust Authority on the Intesa Sanpaolo-Ubi merger.

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Thu, 06 Aug 2020 05:57:07 +0000.