Unicredit ‘flies’ after the new Plan to 2024, strong increase in profits and more dividends to shareholders

Unicredit flies to the stock exchange – where it was suspended due to excess volatility – after the presentation of the new strategic plan 2022-2024, significantly renamed ‘Unicredit Unlocked’ because it has the ambition to ‘unlock’ the growth potential of the group. A project that aims at “greater cost efficiency, optimal capital allocation and net revenue growth of around 2 percent per year”. The Plan – explains the group – “optimizes the current structure of the Group and defines a clear long-term program for tomorrow” with a “new business model for a strong organic generation of capital, capable of guaranteeing shareholder remuneration significantly higher and gradually growing over the plan period, amounting to at least 16 billion for 2021-2024. The distribution will take place through the combination of cash dividends and share buybacks, maintaining or exceeding a robust CET1 ratio of 12.5- 13 hundred “. Unicredit estimates a positive operating leverage of around 4 percent in 2021-2024 with a cost / income ratio of around 50 percent in 2024 and a 10 percent RoTE in 2024. 2024 a reduction in costs of 0.5 billion euros in absolute value, while for net revenues it aims at an increase of 1.1 billion “to bring profitability above the cost of capital, mainly thanks to commissions and a recovery in the market share “. On the cost front, the group aims to achieve a cost reduction of 0.5 billion euro in absolute value by 2024, while for net revenues it aims at an increase of 1.1 billion” to bring profitability above the cost of capital, mainly thanks to commissions and a recovery in market share “. The financial targets announced in the Plan therefore foresee a net profit of more than 4.5 billion euros in 2024 (3.3 billion expected this year) and net revenues i in growth from over 16 billion in 2021 to over 17 billion. On the dividend front for 2022, Unicredit expects a distribution of 3.7 billion (relating to FY2021), consisting of a cash dividend equal to approximately 30 percent of the underlying net profit and share buybacks for the remainder: a total distribution ” in line with or above that for FY2021, with a progressive increase starting from FY2023 “. In fact, the annual cash dividend for the year 2022 is expected at 35 per cent of the net profit and for the following years at least 35 per cent of the net profit with the remainder in share repurchases. On the organizational front, the plan focuses on the four regional macro-areas that “will have the support of two centralized product factories, Corporate Solutions and Individual Solutions, which will leverage the scale of the Group to offer a complete range of best-in-class products to all our clients”. The estimate is that Corporate Solutions will generate more than 5 billion in revenues in 2021, aiming for a CAGR of 4 percent in 2021-2024, and a RoAC up to 17 percent in 2024 from 13 percent in 2021, thanks to a Low-capital-absorbing growth. As for Individual Solutions, it is projected to generate just over $ 3 billion in revenue this year in 2021, with a CAGR target of 5 percent in 2021-2024 and very high returns on allocated capital. In Italy, the business will focus on the areas with the highest growth and the most profitable, while optimizing capital and achieving the highest ratios in our regions for the level of fees / revenues, expected to be around 55 per cent, and for net revenues / RWA. , expected to be around 6 per cent in 2024, with RoAC above 12 per cent. As for Germany, a commission / revenue ratio is estimated at around 30 percent and net revenue / RWA at around 5 percent in 2024, with RoAC above 10 percent. Unicredit then announces the hiring of 1,500 people over the plan in all our geographical macro-areas, of which 900 in Italy, 300 in Central and Eastern Europe, 200 in Germany and 100 in control functions. commitment on the sustainability front with a Net Zero goal of greenhouse gas emissions by 2030, a target of 79% of renewable energy use in offices with the elimination of single-use plastics by the end of 2022.