UniCredit Opts Against Paying Italian Bank Tax After Net Interest Income Drives Earnings -- Update
By Pierre Bertrand
UniCredit opted not to pay an Italian windfall tax, after it
reported a forecast-beating rise in third-quarter earnings driven
by net interest income and raised its guidance.
The bank said Tuesday that it has opted to put 1.1 billion euros
($1.17 billion) to its nondistributable reserve rather than
contribute to an Italian windfall tax, which was approved by the
country's parliament earlier this month.
Banks in Italy were given the option to pay taxes on their
excess profits relative to 2021, or to allocate two and a half
times what they would have paid in tax into a reserve that can't be
distributed to shareholders.
The Italian bank said it made EUR2.32 billion in net profit for
the period, compared with EUR1.71 billion a year prior, on revenue
that grew 24% on year to EUR5.97 billion.
Net interest income, a key revenue metric, rose in the quarter
by 2.9% compared with the second quarter and by 45% on year to
EUR3.6 billion, UniCredit said.
The result compares with expectations of EUR1.92 billion in net
profit, EUR3.5 billion in net interest income and EUR5.74 billion
in revenue, according to a bank-provided consensus of analysts'
UniCredit said that its operational costs in the quarter were
flat in 3Q compared with 2Q and had declined 2.3% on year.
It said that its result reflected consistent growth across all
It also added that it saw its average gross commercial
performing loans as of Sept. 30 decline 1.3% relative to the second
quarter, and by 4.2% compared to a year prior, while average
commercial deposits also fell by 1.6% and by 5.6% compared with
second quarter and on year respectively.
UniCredit raised its 2023 guidance for net interest income to at
least EUR13.7 billion from at least EUR13.2 billion. It said it
sees 2023 net revenue at above EUR22.2 billion from above EUR21.5
It added that it guides for net profit of at least EUR7.25
billion and a shareholder distribution of at least EUR6.5 billion
Write to Pierre Bertrand at firstname.lastname@example.org
(END) Dow Jones Newswires
October 24, 2023 04:52 ET (08:52 GMT)
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