UniCredit stock still up: UniCredit posts larger net loss despite rising earnings

The bank, Italy’s second largest by assets, reported a net loss of 1.44 billion euros, after a loss of 1.18 billion euros a year earlier and compared to an expected loss of 1.32 billion euros, according to a median forecast provided by the company consensus estimate.

Quarterly revenue rose 4.7 percent to 4.44 billion euros, beating analyst estimates of 4.20 billion euros. For 2021, UniCredit reported revenues of 17.95 billion euros versus a forecast of 17.5 billion euros.

Net interest income – the difference between what lenders make on loans and pay for deposits, a key metric for retail banks – rose 6.9 percent in the fourth quarter.

At its shareholders’ meeting on April 8, the company will propose a cash dividend totaling EUR 1.17 billion and a share buyback of around EUR 2.58 billion.

UniCredit cancels plans for Russia due to political tensions

UniCredit SpA has scrapped plans to merge its Russian business with that of Moscow-based Otkritie Bank. The reason is the current geopolitical situation and the increasing tensions in the region, as CEO Andrea Orcel said in a conference call.

The Italian bank was at an early stage of the due diligence process for the Russian otkritie. UniCredit considered merging its Russian operations – which account for about 5 percent of the group’s business – with Otkritie in exchange for a stake in the combined company, Orcel said. The Russian bank, which was bailed out and nationalized in 2017, is planning an IPO.

The deal would not have significantly changed the Italian bank’s commitment to the country, Orcel said, stressing that this plan has now been canceled due to the current situation in the region.

The US has announced it will impose sanctions on Russia’s economy if Russian President Vladimir Putin orders an invasion of Ukraine, while Russian forces are ramping up near the border between the two countries.

The list of possible sanctions is long and could result in certain Russian banks being banned from Swift, a global intermediary of bank-to-bank financial transactions, analysts at JP Morgan said in a note this week.

Although UniCredit has withdrawn from the potential Otkritie deal, the Italian bank is maintaining its presence in Russia, Orcel said on Friday.

In Milan, UniCredit paper is temporarily up 0.92 percent to EUR 13.898.

By Cristina Roca

FRANKFURT (Dow Jones)

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