UniCredit reports better-than-expected Q1 results

UniCredit has released its results for the first three months of 2023, noting its net operating profit in Germany jumped nearly 80% between quarters.

The Italian banking giant revealed earlier this week its net operating profit within Europe’s largest economy jumped from €481m in Q4 2022 to €864m in Q1 2023, an increase of 79.8%. Year on year, the firm said its German net operating profit had risen by 32.3%.

Overall, the bank reported a 29.2% increase in net operating profit between the quarters. Its Italian division saw a 11.4% increase between quarters, with central Europe up 42.1% and eastern Europe up 78.5%. Russia, however, slid 32%.

A ‘transformed bank’

In the statement, UniCredit declared itself to be a “transformed bank with a stepped up, consistent and sustainable profitability run rate”. It also declared it was “entering the second phase of the industrial plan, with further untapped potential”.

“The group has delivered superior revenue growth driven by a favourable interest rate environment combined with well managed deposit beta and strong commercial momentum,” the bank added. “This has resulted in €5.8bn of net revenues in Q1 2023, an increase of 56.5% year on year.”

Reuters highlighted that the firm had upped its profit forecast, adding: “UniCredit said it would return at least €5.75bn to shareholders through dividends and buybacks – up from the €5.25bn it is paying out over 2022 results, which in turn represents a 40% increase from 2021.” UniCredit made no mention, however, of the 10% of jobs it has axed over the last two years.

As Bloomberg wrote this week: “The Milan-based bank’s full-time equivalent employees stood at 74,322 at the end of March, down about 7,700, or roughly 10%, from the level at the end of the first quarter in 2021, according to filings published Wednesday. The lender had never set a public target for the cuts.”

UniCredit group CEO Andrea Orcel meanwhile took time to warn that some regional lenders within the US were facing rescue by the government. Orcel told CNBC: “In the US, it is about distressed banks being rescued, I don’t see any distressed bank being rescued in Europe.”

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

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