UniCredit boasts record Q1 results, upgrades outlook By Investing.com

UniCredit SpA (UCG.MI) has announced its best first quarter in history, with significant year-over-year growth marking its 13th consecutive quarter of profitability.

The bank’s net revenues rose to €6.3 billion, a 7.5% increase compared to the same period last year. Earnings per share (EPS) surged by 42%, with a dividend per share (DPS) hike of 64% and tangible book value per share up by 25%.

UniCredit’s robust performance was reflected across its various regions, including Italy, Germany, Central Europe, and Eastern Europe. The bank also upgraded its net profit guidance for the year to over €8.5 billion and anticipates a total distribution of approximately €8.6 billion for 2024.

Key Takeaways

• UniCredit reported a 7.5% increase in net revenues to €6.3 billion for Q1 2024.
• The bank experienced a 42% rise in EPS and a 64% increase in DPS.
• Net interest income (NII) grew by 14%, and fees were up by 11%.
• The cost to income ratio improved, dropping below 34%.
• UniCredit announced an upgraded net profit guidance of over €8.5 billion for 2024.
• The expected total distribution for 2024 is set at approximately €8.6 billion.
• UniCredit has made significant strides in reducing its exposure to Russia.

Company Outlook

• UniCredit is committed to completing its UniCredit Unlocked transformation within the next three years.
• The bank aims to achieve client growth, expand its fee base, and maintain operational and capital efficiency.
• UniCredit’s net profit guidance has been positively revised to over €8.5 billion for 2024.
• The bank is focused on strategic investments that generate returns above the cost of equity.

Bearish Highlights

• The bank’s CFO, Stefano Porro, anticipates a decline in rates in the second half of the year, which could impact NII.
• UniCredit is working on reducing its exposure in Russia further by the end of 2025.

Bullish Highlights

• UniCredit’s regions all contributed positively to the bank’s strong performance.
• The bank was named the top employer in Europe for the eighth consecutive year.
• UniCredit’s Client Solution business saw gross revenues increase by 6% to €2.9 billion.

Misses

• There are challenges posed by the expected decline in rates affecting NII in the latter half of the year.

Q&A Highlights

• CEO Andrea Orcel discussed exceeding the distribution target of €8.6 billion by at least 2027.
• UniCredit is focused on reducing risk-weighted assets and increasing…