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UniCredit shares rose on Monday after the Milanese lender said it expected to lift its net profit forecast to €11bn this year as stakes in European rivals Commerzbank and Alpha Bank boosted earnings.
The lender said it now planned to return about €50bn in capital to investors over the next five years as “exceptional” growth was expected to continue at an annual pace of 7 per cent over the next three years.
Chief executive Andrea Orcel said UniCredit delivered record growth and profitability last year, with a 14 per cent rise in net profit to €10.6bn and a return on tangible equity of 19.2 per cent.
UniCredit, which is Italy’s second-largest bank, had previously said it expected to hit the €10bn profit mark in 2027, and now expects to post profits of €13bn in 2028.
The five-year payouts represent 80 per cent of the total expected profit, which will be paid in a mix of cash dividends and share buybacks. The bank will consider additional returns on a yearly basis depending on its levels of excess capital, it said in a statement.
Orcel said the results marked “20 consecutive quarters of disciplined profitable capital generating growth and beating our own expectations”.
Under Orcel’s leadership the lender has taken stakes in rival European lenders while also making what the chief executive has called mere financial investments in Italian institutions such as insurer Generali.
However, the lender is yet to complete a full-blown takeover with the governments of Germany and Italy last year opposing its bids to buy Commerzbank and Banco BPM respectively.
The bank also has large operations in Germany, Austria and eastern Europe.
Shares rose 5.3 per cent in Milan to €77.89, valuing UniCredit at just over €121bn.
