UniCredit profit beat analyst estimates across the board, allowing the bank to boost shareholder returns on 2023 profit to 8.6 billion euros (S$12.46 billion). 

Italy’s second-biggest lender posted a stated net income of about 2.81 billion euros in the final quarter of last year, almost tripling analyst forecasts, on higher-than-expected revenue and lower provisions for bad loans. The bank is distributing 100 per cent of adjusted net profit for the year.

Chief executive officer Andrea Orcel has enjoyed a tailwind from rising European interest rates and the effects of an efficiency drive that he’s pushed through since taking the helm of the bank in 2021. While the lender has cheered investors with the best returns in the region, like its peers, UniCredit is now facing a weakening economy and an end to rate hikes. 

UniCredit expects an adjusted full year profit this year broadly in line with 2023. Analysts estimates point to full year profit in 2024 of 7.6 billion euros.

The Milan-based lender has distributed almost 18 billion euros in a mix of cash dividends and share buybacks since 2021, meeting its end-2024 goal a year ahead of schedule. Starting this year, the lender will introduce an interim dividend and plans to distribute at least 90 per cent of its net adjusted profit, it said in the statement, adding that the total distribution for the calendar 2024 year will be about 10 billion euros. BLOOMBERG