Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

UniCredit ups 2022 profit goal after Q3 earnings beat

Economy Oct 26, 2022 03:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Unicredit logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration

By Valentina Za

MILAN (Reuters) -Italy's No.2 bank UniCredit on Wednesday raised its 2022 profit goal above 4.8 billion euros ($4.8 billion), helped by higher interest rates and lower loan loss provisions that also drove quarterly earnings above forecasts.

UniCredit's business model, less geared towards fee-yielding businesses after it sold its crown jewels in the past to raise cash, is less affected than that of Italian rival Intesa Sanpaolo (OTC:ISNPY) by the current market turmoil, while it stands to benefit more from the higher rates.

UniCredit posted a profit for July-September of 1.71 billion euros, well above analysts' consensus forecast of 1.00 billion euros provided by the bank.

UniCredit had already improved its 2022 guidance in July, indicating a net profit target of around 4 billion euros.

The bank, which has failed to extricate itself from Russia where it runs a top-15 lender, said it had reduced its cross-border exposure to the country to 3.1 billion euros in the quarter.

Quarterly earnings were also boosted by much higher than expected trading income, which UniCredit said had been helped by companies' demand for hedging products.

With the Italian economy heading towards a recession amid Europe's energy crisis, analysts had expected more than five times the 84 million euros in loan loss provisions UniCredit booked in the quarter.

Chief Executive Andrea Orcel, however, said that writebacks had helped the bank to offset a 30% increase in generic provisions it booked in the quarter to account for credit risks from higher rates, inflation and energy prices.

The default rate had remained very low in the period at 0.8%, finance chief Stefano Porro said.

UniCredit, which under former UBS investment banking chief Orcel is pursuing a strategy focused on capital generation, said its core capital ratio stood at 15.41% at the end of September, compared with 15.73% in June.

The erosion reflects a second share buyback UniCredit is carrying out as it hits a goal of returning 3.75 billion euros of last year's earnings to shareholders.

"The momentum in our 2022 results ... creates a solid base for a distribution of at least the same as for 2021, pending fourth quarter dynamics, supervisory and shareholder approval, Orcel told a media call.

($1 = 1.0047 euros)

UniCredit ups 2022 profit goal after Q3 earnings beat
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email