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FINANCIALS: Unicredit: Results Underpin Recent Tightening

FINANCIALS

Unicredit (UCGIM: Baa3/BBB-/BBB-) results look good with a big revenue beat, upgraded guidance (consensus is ahead already) and solid credit stats. Spreads have tightened into these results but there’s little here to derail that performance, we feel. Italy was solid, not spectacular, but still a reasonable lateral for Intesa (reports 30-Jul).

  • Credit stats: loan losses were just 1bp (well below consensus) and non-performers ticked down 9bp (to 2.63%, cons: 2.75%); only Italy and Russia saw the ratio move up, so a good performance across CEE. CET1 is 16.2% (fully loaded), broadly in line.
  • Revenues are a significant (5%) beat, including an NII beat. Only Italy looked more muted within this. Costs were marginally better, and that loan loss performance drove a 13% pre-tax beat.
  • Guidance: revenues are upgraded (to EUR23bn for FY24, from 22.5bn) – consensus is already at EUR23.5bn but an upgrade never hurts. Other guidance (including loan losses at <20bp) are confirmed. The churlish may point out this could imply quite a loan loss downturn in 2H24 after the 5bp reported for 1H24 but Russian write-backs do skew this analysis.

Conf call is 0900 (London time) at: https://multimedia.unicredit.eu/view/24072024-2Q24-1H24-Group-Results-Presentation

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