UniCredit by Andrea Orcel in the spotlight of the markets with exposure to Russia, M&A options, buybacks and dividends to reward shareholders and much more. There are various information to the markets that the CEO Orcel has released in the last few hours, including today, on the occasion of the 27th Financials Ceo Conference annuale di Bank of America Merrill Lynch.
The protagonist is Orcel’s announcement regarding the guidance for 2022 and 2023, which will be substantially improved with the presentation of the third quarter accounts. (which will take place at the end of October).
Orcel said UniCredit will catch up “All targets even in the event of a slight recession”, adding that, if there were to be “A severe recession, we would be ready to face any shock and to perform better than the average of our competitors “.
UniCredit, Orcel launches a dig at the stock exchange
The CEO, however, took a pebble from his shoe, throwing a dig at the bag which, in his opinion, would have “Ignored the journey of transformation made”, which gave birth to the UniCredit of today.
“After 18 months, Unicredit is already a very different bank, the Unicredit Unlocked of today is not the Unicredit of the past, it’s a new bank “. In reality, the UniCredit stock, listed on the Ftse Mibhas been highlighted several times recently with its positive performances.
Today, in the wake of the CEO’s words, the shares have jumped to more than + 6%, traveling to the record of the last 7 months.
UniCredit: title -17% YTD, Bank BPM +12.50%
The table drawn up by FOL (Finanzaonline) highlights that, compared to the jump of more than + 16% in the last month, and always more than + 16% in the last six months, since the beginning of the year the prices of Piazza Gae Aulenti fell by 17.33%. Negative YTD trend also for Intesa SanPaolo (-17.49%) and Bper (-4.71%), while Banco BPM has collected 12.50% since the beginning of 2022.
Of course, in the last six months the UCG stock has been confirmed as the best among the banks listed on the Ftse Mib. In the last month, it has been head to head instead between UniCredit and Banco BPM.
UniCredit in Russia, Orcel: ‘exit is not a gift’
UniCredit CEO Andrea Orcel today also addressed other crucial issues concerning Piazza Gae Aulenti: that of M&A, or of any mergers & acquisitions (mergers and acquisitions) with any other banks and that, in times of war between Russia and Ukraine, of its exposure to Russia. An issue that remains very topical, given that, unlike many other banks that, globally, have fled, UniCredit has not yet completely severed the link with the Russian subsidiary (while reducing exposure).
The CEO went back to explaining the reasons behind his strategy, noting that a hasty exit from Russia “It would have been a reaction emotional and even immoral, in that “It would have been a gift to the people you’re trying to oppose.”
There is also the employee factor:
“We are trying to contain in an orderly way what we have in Russia and possibly an exit, but it does not have to be a gift”, Orcel remarked, adding that UniCredit also wishes to think about the future of its 4,000 employees in the country, and that “They have been with us for more than 15 years”.
UniCredit, Orcel on M&A: only if it is advantageous
On the M&A issue, Orcel recalled UniCredit’s focus, which he had also done yesterday, in response to the article published a few days ago in Handelsblatt, according to which the bank is watching with interest to an acquisition in Germany (the article also spoke of the negotiations entered into with the German bank Commerzbank).
So Orcel yesterday, on the sidelines of the presentation event of a new collaboration with Teach For All to support the education of children and young people in seven key countries in which UniCredit is active:
“I said something obvious: under the right conditions, M&A can accelerate growth or make it possible to achieve certain objectives ”.
UniCredit is “Focused much more on internal delivery” – the CEO specified – and aim to be the best in class, “best in class” in each country where it is present.
“I have said that every M&A transaction must be an opportunity. That if in one of the countries we are in it does not derail our position but accelerates it, we would do it ”. This “It does not mean that we will do it tomorrow”.
Orcel reiterated his view on M&A again today:
“Why should I focus on M&A, unless it is a very profitable deal, risking to derail the growth in value achieved organically by UniCredit? By the way, in the current phase of the markets, it is “Difficult to establish an exchange for a merger”.
UniCredit dividends, Orcel: ‘reserves in the backpack’
What about, last but not least, dividends?
“This year UniCredit will achieve the plan’s objectives, regardless of the war – Andrea Orcel said yesterday – We will therefore be in a position to distribute. At the end of the year, however, there will be a certain economic perspective: if I am about to enter the abyss, I cannot distribute everything ”.
But the CEO reassured the stakeholders:
“As we are entering strong and generating capital, we made 110 basis points in the first quarter, as we have a positive interest rate impact, when we evaluate what we can afford. we will have all these reserves in our backpack to make a balanced decision “. Orcel pointed out that “Our covers are good”.
UniCredit: Buyback kicks off this week
UniCredit announced yesterday in a note that the second tranche of the 2021 Buyback plan will be launched this week, with the bank’s own share purchases.
The tranche, the note states, concerns a maximum amount of 999,954,005.15 euros for a number of UniCredit ordinary shares not exceeding 200,000,000.
The Italian bank reached a new milestone a few days ago, cashing in the approval of the shareholders’ meeting to the second tranche of 1 billion of the buyback of 2.6 billion in total.
He voted in favor of the resolution 99.3361% of the share capital present at the meeting, equal to 63.99% of the total capital.
Orcel that day commented on the ok arrived at the floor, aimed at increase dividends and profits.
“The cancellation entails a decrease in the shares on the market, in this case by about 7% of the capital, which in turn means that when the transaction is carried out, of these two buyback tranches, the number of shares on the market would fall by 11-12%. Which between profits and dividends will lead shareholders to receive this figure of 11-12% more than the current one, which should lead to investor appreciation of the program ”.
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