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UniCredit reported record profits for 2024, bolstering the Italian lender as it snaps up stakes in rivals, with insurer Generali forming its latest target.
Full-year profits rose 2 per cent to a record €9.7bn, and chief executive Andrea Orcel offered a sweetener to shareholders with a pledge to increase shareholder distributions, with half in cash. UniCredit said it planned to pay out €9bn to shareholders off the back of last year’s results.
However, fourth-quarter earnings on Tuesday were hit by provisions for a lawsuit filed by a Gazprom subsidiary and integration costs in Romania — partially offset by a gain of about €400mn related to deferred tax assets.
UniCredit reported net profits of €1.97bn for the final three months of last year, better than analysts had expected but down 30 per cent on the same period a year earlier.
The bank said it would aim to keep profits stable this year in spite of falling interest rates, targeting net profits of €10bn by 2027.
Shares in the lender were trading 3 per cent lower by early afternoon in Milan.
UniCredit’s results come as Orcel is entangled in a series of potential M&A transactions.
On Tuesday the bank disclosed that it had built its stake in insurer Generali to more than 5 per cent, adding to uncertainty in Italy’s financial sector while UniCredit simultaneously pursues crosstown rival Banco BPM and German lender Commerzbank.
Industry insiders see the Generali stakebuilding as a bargaining chip in a growing power struggle over Italy’s biggest banks and asset managers, because of the web of crossholdings.
Orcel said on Tuesday that he was not planning a full blown takeover of Generali and that he remained focused on the two pending deals. “We don’t engage in adventures,” he said, adding that UniCredit held part of its Generali stake on behalf of clients.
According to Orcel, UniCredit would be able to close the BPM and the Commerzbank transactions — which were both rejected by the targets and unnerved both countries’ governments — “sequentially” with a takeover of the German lender potentially completing in 2026.
“A deal requires further discussions with the new German government [after the upcoming general election] so for the time being, it is just an investment,” Orcel said.
He said Commerzbank “would benefit from being part of a larger group”, adding that the German lender’s new strategic plan was “unrealistic” and its corporate structure “opaque”.
Analysts expect UniCredit to sweeten its €10bn offer for Banco BPM, which represents a narrow 0.5 per cent premium to the bank’s closing price on the day before the bid. Analysts have questioned whether an improved offer would jeopardise UniCredit’s generous shareholder distribution strategy.
“There is no way we will risk derailing the [business] plan or the distribution by doing M&A on the wrong terms,” Orcel said, adding “if we were to do M&A . . . nothing would happen to the [2025] distribution”.
