By Andrea Mandala
MILAN (Reuters) -Italian financial group Unipol aims to generate 1 billion euros ($1.1 billion) in capital over the next three years to boost its finances and have money for investments.
Unveiling its “Stronger/Faster/Better” plan for 2025-2027, Italy’s second biggest insurer said on Friday it would target a total net profit of 3.8 billion euros ($4.1 billion).
That compares with 2.3 billion euros under the previous three-year plan, a goal that Unipol surpassed.
It also pledged to pay out up to 2.2 billion euros in dividends over the period, versus the previous goal of 960 million euros, which it also exceeded.
Unipol’s shares were down 0.8% at 0930 GMT, with analysts saying the profit and dividend targets were broadly in line with expectations.
“We believe that the additional capital generation across the plan after dividend payments comes as a positive surprise, which we could think might be deployed for growth or additional capital return”, Barclays analysts said in a note.
In-house or ‘organic’ capital generation is a strategy adopted, for example, by UniCredit under CEO Andrea Orcel, who has focused the bank on activities that maximise profits relative to capital tied up to cover risks.
Unipol said it would strengthen its profitability and distribution network, which relies in part on BPER Banca and Banca Popolare di Sondrio, banks in which Unipol owns nearly 20% each.
The banking distribution channel will be expanded through more products that require less capital, Unipol said.
Unipol has backed a 4.3 billion euro takeover bid that BPER launched last month for Popolare di Sondrio, saying a merger would positively impact its partnerships with the two lenders.
In the final year of the plan, Unipol aims to achieve total insurance revenues of 18 billion euros, with 10.6 billion from its non-life business, and the remaining 7.4 billion from life.
($1 = 0.9271 euros)
(Reporting by Andrea Mandalà. Editing by Mark Potter and Valentina Za)
