By Valentina Za
MILAN (Reuters) -UniCredit on Wednesday reported a higher than expected quarterly profit and raised its 2025 outlook, a day after ditching a takeover bid for rival Banco BPM which had led Italy’s second biggest bank to clash with the government.
UniCredit late on Tuesday said it was withdrawing the offer, blaming government intervention in the process, which it said deprived Banco BPM shareholders, as well as Italy’s economy, of a good opportunity.
“We’ve drawn a line on this transaction,” CEO Andrea Orcel told CNBC television. “At some point you need to cut your losses, eliminate your drag and focus on what you control.”
UniCredit’s tussle with the Rome administration over Banco BPM highlights a wider European trend of governments getting involved in banking consolidation.
Net profit in the three months through June totalled 2.9 billion euros ($3.4 billion) excluding one-off items, and 3.3 billion euros when including those. That is above a 2.5 billion euro forecast for the unadjusted figure in a company-gathered analyst consensus, and up from 2.7 billion euros a year ago.
UniCredit forecast a net profit in the full year of around 10.5 billion euros, above a previous guidance of more than 9.3 billion euros, helped by a smaller than anticipated decline in the income from the gap in deposit and lending rates and further cost cuts.
Overall revenues are still set to decline to 23.5 billion euros this year from 24.8 billion in 2025.
It said it would pay out to shareholders at least 30 billion euros in 2025-2027, of which at least half in cash dividends and the rest through share buybacks, depending on potential acquisitions.
Orcel has boosted UniCredit’s profits in recent years by slashing costs as it took advantage of higher rates, to generously reward investors and drive up the share price.
However, his ambitious expansion strategy has faced several setbacks. In 2021 he walked away from a deal with Italy’s government to buy Monte dei Paschi and in recent months clashed with Germany over plans to buy Commerzbank.
Its bid for Banco BPM in November derailed government plans to combine BPM with Monte dei Paschi, prompting Rome to use its special powers to intervene in corporate deals, and triggering a legal dispute.
UniCredit said it had consolidated a 9.9% equity stake in Commerzbank, with a 335 million euro hit in the second quarter due mainly to hedging costs related to that, one of the one-off items of the period.
They also include a positive accounting impact from the Commerzbank holding and the revaluation of UniCredit’s stakes in life insurance ventures in which it has bought out its partners.
UniCredit, which also plans to consolidate this quarter a stake in Greece’s Alpha Bank, said both Commerzbank and Alpha would boost its profits from 2026.
By consolidating the full 29% Commerzbank stake it owns, still partly as derivatives it will convert into shares, UniCredit now expects a 2027 profit of more than 11 billion euros, up from 10 billion previously.
“We’re rooting for the success of Commerzbank because their success is our success,” Orcel said as UniCredit forecast a contribution to 2026 earnings from both banks’ stakes.
($1 = 0.8522 euros)
(Reporting by Valentina Za, editing by Alvise Armellini and Tomasz Janowski)
