UniCredit Exceeds Expectations With Strong Second Quarter Results

UniCredit, the Italian bank, has exceeded expectations with its second-quarter results. Here are the key details:

Revenue

UniCredit reported revenue of 5.97 billion euros ($6.60 billion) for the second quarter, surpassing analysts' expectations of EUR5.62 billion. This represents a significant increase from the 4.78 billion euros achieved in the second quarter of 2022.

Net Income

The lender also reported a quarterly net profit of EUR2.31 billion, surpassing analysts' expectations of EUR1.66 billion. This is an improvement from the EUR2.01 billion recorded in the same period last year.

Guidance

UniCredit has raised its guidance for 2023 due to an improved interest-rate environment and lower cost of risk. The bank now expects a net profit of at least EUR7.25 billion, net interest income of at least EUR13.2 billion, and revenue above EUR21.5 billion. Additionally, it plans to distribute at least EUR6.5 billion to shareholders. UniCredit has indicated that its 2024 guidance will be broadly in line with 2023. Analysts believe there is potential for further upside in net interest income, with Jefferies suggesting capital returns of up to EUR20 billion between 2021-2024.

Net Interest Income and Costs

UniCredit's net interest income (NII) saw a small 2% beat to consensus and continued to rise quarter-on-quarter, primarily due to rising interest rates. Operating costs also came in lower than expected at EUR2.33 billion, contributing to an excellent cost-to-income ratio of 39%.

These strong results are a testament to UniCredit's solid performance and strategic positioning in the current market.

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