Unicredit, fintech shopping and 5.2 billion in profits

by Paolo Algisi (ANSA) - MILAN, 25 LUG - Unicredit closes the quarter with a profit of €2.7 billion, up 16 percent on 2023 and higher than the €2.3 billion expected by analysts, while archiving the first six months of 2024 with €5.2 billion in profits, 20 percent higher than last year, and generating €6.7 billion in capital, evenly split between the two quarters. "Record" results, stresses CEO, Andrea Orcel, who revises 2024 guidance on revenues, up from 22.5 billion to over 23 billion, and that on capital generation, expected to be above 350 basis points, while for now not touching the target of profits above 8.5 billion."Our underlying performance significantly exceeds" this target but for now, Orcel explained, 'we have decided not to update' the guidance to maintain some 'flexibility' and protect "our future performance." Unicredit will decide between the third and fourth quarters whether to raise targets or put some hay on the table. "The size" of profit 'could depend on integration charges' booked in the second half, Morgan Stanley points out. On the shareholder remuneration front, the distribution of 10 billion during 2024, including 3.1 billion on account of 2024 results between buybacks (1.7 billion) and coupons (1.4 billion), as well as the distribution policy from 2024 results, with at least 90% of profits returning to shareholders. On this front, the target of 8.6 billion was 60 percent achieved with the provision of all 5.2 billion in profits for the six-month period.The accounts were accompanied by the announcement of the €370 million purchase of Aion Bank, a Belgian digital bank with branches in Poland, Germany, and Sweden, and Vodeno, a Polish fintech that owns a cloud platform that enables financial and non-financial companies-from banks to retailers, marketplaces, e-commerce, and fintechs-to offer their customers a full range of banking services even without owning a license.Orcel intends to "further enhance" Vodeno's "proprietary technology," "using it as a sandbox (a circumscribed environment, ed.) to develop, test and innovate for the benefit of our entire group," including through its own team of 200 "talented" engineers, while Aion Bank, which has implemented Vodeno's technology, "gives us the ability to enter specific customer segments and entire markets across Europe, offering additional opportunities to efficiently deploy our excess capital" due to the expectation of a "return of more than 15 percent."Among the markets to look at Orcel points to Poland, left "reluctantly" with the sale of Pekao and where Vodeno is based and has operated "successfully." On the large acquisition front, Unicredit remains "constructive but disciplined" even though at the moment there are "no conditions" to sink the punch due to inflated stock market valuations that make buybacks more convenient. In Russia, where it has set aside 200 million euros after the seizure of 463 million assets, Orcel confirms that it is committed to "phasing out" its activities, without giving Moscow the opportunity to seize them."We want to have clarity on what we can do within the rules," he says, commenting on the appeal to the EU court on the compatibility of the ECB impositions with the current legal framework.Whatever the court's decision, Unicredit will consider it a "win-win" by finally having certainty on how to act.On the stock market, the stock closed up 0.21 percent at 39.10 euros. (ANSA).