Its revenue has stagnated year-on-year, but its profit rose 13% to €8.7bn over the first three quarters, while its cost structure remains one of the lowest in Europe—thanks to the predominant share of demand deposits in its financing—and its first-class profitability is combined with highy satisfactory capitalization ratios.
There is one caveat, however: this record nine-month result is largely due to exceptional gains linked to changes in the scope of insurance activities and the consolidation of the stake in Commerzbank in the previous quarter. Adjusted for these items, profit would be €7.9bn, compared with €7.7bn for the first nine months of 2024.
Like other major European banking groups, UniCredit has offset the significant drop in interest rates—which have halved in two years—through a hedging program rather than growth in its loan portfolio, which remains sluggish amid stagnation in the European economy. However, this momentum cannot be sustained next year.
To compensate for this, CEO Andrea Orcel has launched an all-out external growth strategy. His grand ambitions are currently being thwarted in Germany, where the government is opposed to a full takeover of Commerzbank, in which UniCredit already holds a 29% stake. Meanwhile, in Italy, the group was forced to abandon its bid to acquire BPM this summer following a veto from the Meloni government.
Some see this as a sign of things to come: UniCredit's market capitalization has returned to the peak it reached just before the subprime crisis, at one and a half times its equity value. During the decade that followed, from 2009 to 2019, this market capitalization averaged around half the value of shareholders' equity. This shows how much market perception has changed.
Its dividend is one of the main reasons why the bank continues to be approached by large institutional investors. In this respect too, UniCredit ranks as one of the sector's big favorites in Europe.
