UniCredit has reported impressive third-quarter results, surpassing forecasts with a steady quarter-on-quarter (QoQ) and a notable 24% year-on-year (YoY) revenue increase to €5.97 billion ($6.37 billion), against the projected €5.74 billion. The net interest income rose by 2.9% QoQ and 45% YoY to €3.6 billion, outstripping the estimated €3.5 billion.
The bank's net profit also increased marginally from the second quarter but exhibited a substantial 36% YoY growth to €2.32 billion, beating the expected €1.92 billion. This success was attributed to an improved interest-rate environment which UniCredit leveraged effectively.
In light of these results, the bank has raised its 2023 guidance for net interest income and net revenue to at least €13.7 billion and above €22.2 billion respectively. Andrea Lisi of Equita Sim sees UniCredit's 2023 profit target of at least €7.25 billion as conservative, given the bank's net profit of €6.7 billion in the first nine months of 2023.
For 2024, UniCredit predicts a net profit of at least €7.25 billion and a shareholder distribution of at least €6.5 billion. The bank's CET 1 ratio, a key measure of financial strength, increased to 17.19% from last year's 15.41%.
UniCredit has chosen to opt out of the Italian government's 2024 windfall tax by allocating €1.1 billion in a nondistributable reserve. Meanwhile, the bank reported declines in average commercial deposits, gross commercial performing loans, and customer loans and deposits.
According to InvestingPro data, UniCredit has a market cap of $43619.17M and a P/E ratio of 5.27, indicating it's trading at a low earnings multiple. The bank's revenue growth has been accelerating, with a recent 48.23% increase, aligning with the InvestingPro Tip that revenue growth has been accelerating. Furthermore, the bank has raised its dividend for 3 consecutive years, which is reflected in a significant dividend growth of 83.49%.
InvestingPro also points out that UniCredit is a prominent player in the Banks industry, with a high return over the last year of 103.31%. This aligns with the InvestingPro Tip that the company has had a strong return over the last five years. Despite some volatility in the stock price, the company's shares are trading near their 52-week high, with the price at 96.1% of the 52-week high.
For more insights like these, check out InvestingPro which offers additional tips and real-time metrics for companies like UniCredit.
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