The Commerzbank AG headquarters, in the financial district of Frankfurt, Germany, on Thursday, Sept. 12, 2024.
Emanuele Cremaschi | Getty Images News | Getty Images
Italy’s second-largest lender UniCredit on Tuesday posted a fourth-quarter profit beat, raising shareholder returns amid market focus on the bank’s M&A overtures.
Net profit attributable to the group came in at 1.969 billion euros ($2.03 billion) in the fourth quarter, compared with an analyst forecast of 1.803 billion euros, according to a LSEG-compiled consensus.
Revenues reached 6 billion euros over the period, versus analyst expectations of 5.898 billion euros.
Other fourth-quarter highlights included:
- Return on tangible equity of 11.5%, compared with 19.7% in the third quarter.
- CET 1 capital ratio, a measure of bank solvency, was 15.9% from 16.1% in the previous three-month stretch.
The lender, whose full-year net profit added an annual 8.1% to 9.31 billion euros, pledged bolstered shareholder returns in 2025, upping its cash dividend pay-out guidance to 50% of net profit, from 40% in 2024. UniCredit also said it targets a RoTE performance above 17% this year, compared with the 17.7% of 2024.
In a statement accompanying the results, CEO Andrea Orcel said UniCredit was progressing onto the next phase of its strategy and will accelerate its “growth, aspiring to further widen the gap with our competitors, close our valuation gap, and cementing UniCredit as the bank of Europe’s future and benchmark for banking.”
UniCredit has been at the epicenter of Italy’s nascent push for consolidation since the second half of last year, following its surprise build — and later increase — of a stake in Germany’s Commerzbank, and its takeover offer for domestic peer Banco BPM at the end of 2024. The Italian lender has so far rejected UniCredit’s opening play, but CEO Andrea Orcel told Bloomberg his opening bid for Banco BPM was only a “fair starting point.”
The German administration has decried UniCredit’s “very aggressive, very opaque, untransparent” bid for Commerzbank, with Rome likewise resistant on the domestic front, amid broader government plans to form a third Italian banking titan alongside Intesa Saopaolo and UniCredit. Complicating the landscape of Italian dealmaking, UniCredit on Feb. 2 unveiled a 4.1% stake build in Italy’s top insurer Generali Group, but has stressed that “no strategic interest” motivates the venture.
Critically, Italy operates under so-called golden powers legislation which permits Rome to intercede or set conditions on foreign and domestic corporate takeovers in key sectors such as defense, energy, communications and banking.
Market participants are watching which of its twin-pronged suits UniCredit will commit to, or whether it will ambitiously keep both targets in sight.
This breaking news story is being updated.
