Yahoo Finance

• Net Revenue Growth: Increased by 3.2% year-on-year and 14.6% quarter-on-quarter.

• Net Profit: Increased by 8.3% to EUR 2.8 billion.

• Return on Tangible Equity (RoTE): Achieved 22%, with an adjusted RoTE of 26% at 13% CET1.

• Cost-to-Income Ratio: Reduced to 35.4%.

• Net Interest Income (NII) Return on Allocated Capital (RoAC): Increased to 20%.

• Fee Income Growth: Grew 8.2% year-on-year and 16.5% quarter-on-quarter.

• Cost of Risk: Remained low at 8 basis points.

• CET1 Ratio: Increased to 16.1%, or 16.6% excluding the accrued share buyback.

• EPS Growth: Increased by 18%.

• Dividend Per Share Growth: Increased by 46%.

• Organic Capital Generation: Generated EUR 3.1 billion organically and EUR 5.3 billion overall.

• Fee to Revenue Ratio: Climbed to 36%.

• Loan-to-Deposit Ratio: Stands at 87%.

• Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR): Above 140% and 125%, respectively.

• Warning! GuruFocus has detected 5 Warning Sign with UNCFF.

Release Date: May 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UniCredit SpA (UNCFF) reported its best quarter in history, with record results across all key performance indicators (KPIs).

• Net profit increased by 8.3% to EUR 2.8 billion, achieving a 22% return on tangible equity.

• The company upgraded its 2025 guidance, expecting to exceed 2024 net income and return on tangible equity, with distributions above last year.

• Fee income reached a new record, growing 8.2% year-on-year, with strong performance across various categories and regions.

• UniCredit SpA (UNCFF) maintained a strong capital position, with a CET1 ratio of 16.1%, and a buffer of EUR 8.5 billion to EUR 10 billion.

Negative Points

• Net interest income (NII) showed a decline, although it was offset by strong fee generation.

• The macroeconomic environment remains challenging, with expectations of softer net operating profit due to normalizing rates and cost of risk.

• The company faces potential volatility in trading revenues, which may not repeat the significant overperformance seen in Q1.

• There is uncertainty surrounding M&A opportunities, with political hostilities and strategic considerations impacting potential deals.

• The company has a significant amount of excess capital, which it aims to address by 2027, but this may be impacted by market conditions and strategic decisions.

Q & A Highlights

Q: How much of the potential upward revision of guidance on net revenues is from provisions and trading, and how much from fees and costs? Also, can you clarify your stance on M&A, particularly regarding Commerzbank and strategic objectives? A: Andrea Orcel, CEO: The significant beat on core revenues is due to better-than-expected fees and expected NII. Trading was benign, driven by client risk management and treasury performance. Costs and provisions were better than expected. We may increase guidance further if trends continue. On M&A, we evaluate opportunities in every market but will only pursue those that enhance shareholder value. We prioritize new market entry, strengthening factories, and share buybacks, depending on returns.