Investing.com -- UniCredit (ETR:CRIG) on Tuesday reported strong FY24 results, achieving a stated net profit of €9.7 billion, up 2% YoY.
Excluding deferred tax assets (DTA), net profit stood at €9.3 billion, an 8% increase, while underlying net profit, excluding €1.3 billion in extraordinary charges, was €10.3 billion.
The bank maintained a strong RoTE of 17.7%, rising to 20.9% on a 13% CET1 ratio, and EPS surged by 22% to €5.74.
Total (EPA:TTEF) net revenue grew 4% YoY to €24.2 billion, driven by fees up 8% to €8.1 billion on strong client activity and product expansion. Net interest income (NII) rose 3% to €14.4 billion, showing resilience despite a challenging rate environment.
Costs were €9.4 billion, down 1% YoY, keeping UniCredit’s cost/income ratio at an industry-leading 37.9%, even after absorbing inflation and strategic investments.
"The macroeconomic and geopolitical backdrop remains complicated and unpredictable. We are however well positioned to absorb a normalization of interest rates and cost of risk and cost inflation," said Andrea Orcel, chief executive at UniCredit in a statement.
Net revenue for the quarter was €5.6 billion, including €2.0 billion in fees (up 8.9% YoY) and €3.7 billion in NII.
The cost of risk (CoR) increased by 34 basis points, resulting in LLPs of €357 million in the fourth quarter. Overlays totaled €1.7 billion, supporting CoR at 15 basis points for the whole year.
UniCredit maintained a strong capital position, with a CET1 ratio of 15.9%, unchanged from FY23 despite higher distributions and investments.
The bank generated €12.6 billion in organic capital and improved capital efficiency by reducing risk-weighted assets (RWAs) to €277.1 billion, down €750 million QoQ.
Shareholder returns increased, with €9.0 billion in total distributions, including €3.7 billion in cash dividends (DPS of €2.40, up 33% YoY) and €5.3 billion in share buybacks. For FY25, UniCredit expects distributions to exceed FY24, increasing the cash dividend payout to 50% of net profit.
While economic headwinds persist, net profit and RoTE are expected to remain consistent with FY24.
FY25 net revenue is forecasted above €23 billion, with fees growing mid-single digits, though NII is expected to decline due to a lower interest rate environment and Russia-related impacts.
RWAs are projected to rise to about €300 billion due to regulatory changes under Basel IV. By 2027, UniCredit aims for €10 billion in net profit and a RoTE above 17%, maintaining strong capital generation and efficiency.
Inorganic expansion remains selective, with the €10.1 billion public exchange offer for Banco BPM and an increased Commerzbank (ETR:CBKG) stake (about 28%).