UniCredit Strengthened Capital in Better-Than-Expected 4Q -- Earnings Review
February 06 2020 - 5:44AM
Dow Jones News
By Pietro Lombardi
UniCredit SpA (UCG.MI) reported better-than-expected results
four the fourth quarter on Thursday. Here is what you need to
know:
NET LOSS: The Italian bank posted a loss of 835 million euros
($920 million) for the period, better than the EUR1.10 billion loss
analysts had forecast, according to a consensus provided by the
bank.
REVENUE: The top line also beat expectations. Revenue rose 3.4%
to EUR4.85 billion, boosted by fees-and-trading income, surpassing
expectations of EUR4.66 billion.
WHAT WE WATCHED:
-RETURNS TO SHAREHOLDERS: The bank said it would pay a dividend
of EUR0.63 a share for 2019 and proposed a share buyback of EUR467
million. The payout ratio could increase to 50% of underlying
earnings starting this year and extraordinary capital distribution
in 2021 and/or 2022 will also be considered. The plan presented in
December guided for capital distribution of 40% through 2022.
-CAPITAL: UniCredit significantly strengthened its capital
position in the quarter. The core tier 1 ratio--a key measure of
capital strength--rose to 13.09% at the end of December, including
the buyback, from 12.60% in September.
-ONE-OFFS: The results for the quarter were hit by a number of
one-offs, including restructuring costs in Germany and Austria,
costs related to the sale of a stake in Turkish bank Yapi Kredi,
and provisions for bad loans.
-REVENUE STREAMS: Fees rose 5.1% while trading income more than
doubled. This offset a 7.3% fall in net interest income--the
difference between what lenders earn from loans and pay for
deposits--a key profit driver for retail banks.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
February 06, 2020 05:29 ET (10:29 GMT)
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