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Unicredit Q4 2023 Earnings

Unicredit Q4 2023 Earnings

The Banking Group's Shares Soared by 10% on account of Stellar Earnings

Unicredit reported its earnings on 5th February with stellar 2023 profits, which the bank intends to distribute fully to shareholders. The bank also committed to aiming for a similar level of profit for 2024 despite increasingly challenging conditions. Unicredit announced that they would return €8.6 billion to investors including dividends and share buybacks. This represents an increase of €3.35 billion compared with 2022 distributions. (Source: Unicredit)

UniCredit announced its intention to implement a 90% payout policy, increasing the cash portion to 40% of income from the previous year's 35% in 2023. Additionally, the bank plans to introduce an interim dividend.

The Group reported a stated net profit of €9.5 billion for FY23, marking a significant increase of over 50% compared to the previous year's €8.6 billion net profit. This resulted in a return on tangible equity (RoTE) of 16.6%. (Source: Unicredit)

Unicredit's Earnings per share (EPS) saw significant increase by 74% to €4.71 and dividends per share (DPS) rose by 80% to €1.78 for FY23.

Unicredit reported Total revenue of €23.8 billion up by 26% YoY, primarily supported by net interest income (NII) of €14.0 billion and resilient fees totaling €7.5 billion, despite facing macroeconomic headwinds.

FY24 net profit guidance of broadly in line with prior year and RoTE of circa 16.5% demonstrating our ability to defend profitability across the cycle. (Source: Unicredit)

Q4 FY23 Earnings:

In the fourth quarter of 2023, the stated net profit was €2.8 billion, or a net profit of €1.9 billion. These robust returns were supported by net revenues of €5.7 billion, consisting of €3.6 billion of net interest income (NII), marking a 5.7% increase YoY primarily due to higher rates and effective management of deposit pass-through. Fees totaled €1.8 billion, experiencing a slight decline of 0.6% year on year, largely influenced by reduced current account fees in Italy and increased securitization costs. However, excluding these factors, fees increased by 3.5% YoY, showcasing their resilience despite macroeconomic challenges. (Source: Unicredit)

Loan loss provisions (LLPs) amounted to €300 million, resulting in a cost of risk (CoR) of 28 basis points in the fourth quarter of 2023. The Group's asset quality remained strong, evident through consistently low expected loss, minimal non-performing exposures (NPEs) with high coverage, and existing overlays of €1.8 billion on the performing portfolio. (Source: Unicredit)

Operational costs in the fourth quarter were €2.5 billion, up 6.9% quarter on quarter or 0.8% year on year, primarily driven by salary adjustments related to the new collective salary agreement in Italy and increased performance bonuses. However, for the full year 2023, total costs decreased by 1% compared to the prior year, amounting to €9.5 billion, highlighting the Group's ability to maintain cost discipline despite inflationary pressures while fostering revenue growth. This was also reflected in a favorable cost-income ratio (C/I) of 39.7%. (Source: Unicredit)

Key recent events in the fourth quarter of 2023 and January 2024 include: Launch of the first tranche of the FY23 share buyback program, with UniCredit purchasing a total of 58.2 million shares or 4.5% of share capital since the program's launch as of January 30, 2024. Apart from that Unicredit's successful issuance of a €750 million Senior Preferred Green bond and issuance of a €1.0 billion Tier 2 callable bond. Additionally The company got an upgrade of Moody's deposit outlook to stable, reflecting an improved Financial Profile. (Source: Unicredit)

Italy's second-largest bank saw its shares surge by 10% to reach a nine-year high following the release of its results. The positive momentum was further fueled by the bank's upgraded outlook for the year, particularly as interest rates are anticipated to begin decreasing. (Source: CNBC)

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