Shares of UniCredit, the Italian bank, soared after the company revealed its intentions to enhance capital distributions to shareholders and raise its 2024 profit forecast.
Impressive Stock Performance
As of 0906 GMT on Monday, UniCredit shares traded 9.8% higher at EUR29.30. This surge contributed to a remarkable year-long gain of nearly 63%, surpassing the 5.9% increase of the Stoxx Europe 600 Banks index in the same period.
Increased Distributions to Shareholders
UniCredit unveiled plans to distribute EUR8.6 billion ($9.28 billion) to shareholders in 2023, including dividends and share buybacks. This figure represents a notable EUR3.35 billion increase compared to the previous year’s distributions.
Furthermore, UniCredit anticipates shareholder returns for 2024 to reach EUR10 billion, surpassing its initial projection of at least EUR6.5 billion.
Elevated Profit Outlook
The bank now expects its profit for 2024 to align with the previous year’s reported amount of EUR8.6 billion, exceeding the previous forecast of at least EUR7.25 billion.
According to consensus figures provided by the bank, analysts had predicted UniCredit’s 2024 profit and revenue to be EUR7.74 billion and EUR22.61 billion, respectively.
Strong Financial Performance
UniCredit’s fourth-quarter net profit rose to EUR2.81 billion from EUR2.46 billion during the same period in the previous year. This growth was driven by a 4.6% increase in revenue to EUR5.98 billion, attributed to higher interest rates. The bank’s results surpassed consensus estimates.
Analysts’ Positive Outlook
Barclays analysts Paola Sabbione and Dibin Meledath Koruthu noted in a research note that UniCredit’s impressive financial results, along with its distribution plans for 2023 and 2024, send promising signals.