(Alliance News) - UniCredit Spa reported Tuesday that it closed the first quarter with a net profit of EUR2.6 billion, up about 24% from EUR2.1 billion as of March 31, 2023.

Net revenues stood at EUR6.4 billion, up 7.0 percent from the first quarter of 2023, when they were EUR5.9 billion. This performance was supported by an interest margin of EUR3.6 billion from one of EUR3.3 billion and fees of EUR2.1 billion from EUR2.0 billion.

EBITDA stood at EUR4.1 billion from EUR3.6 billion in the first quarter of last year.

Regarding capital ratios, the CET1 ratio stands at 16.23 percent from 16.05 percent last year, while RoTE stands at 19.5 percent from 16.8 percent as of March 31, 2023.

Looking ahead, the company announced that the net income guidance for 2024 has been increased to over EUR8.5 billion, while the distribution guidance for 2024 has been improved and brought in line with 2023.

In a note, the company explained that the recovery in private consumption will play a crucial role in supporting growth in the face of an even faster than expected disinflation process.

"A gradual recovery in world trade will support exports and fixed investment, with the latter also benefiting from the impulse linked to the National Recovery and Resilience Plan. In the euro area, inflation is expected to fall to 2 percent in the second half of 2024 and below the ECB's target in 2025."

"The first interest rate cut by the ECB is likely in June, while the path thereafter remains uncertain. We expect three interest rate cuts of 25 basis points this year, one per quarter, followed by further cuts next year, until monetary policy neutrality is reached, probably in the 2 percent area."

Andrea Orcel, chief executive officer of UniCredit, commented, "We started the year on an extremely solid footing with net income of EUR2.6 billion, up 24 percent year-on-year, fully exceeding expectations across all key lines, with RoTE of 19.5 percent."

"This result was supported by a markedly improved environment for commissions and AuM, our focus on customers and our product factories translated into exceptional commercial momentum, and a resilient net interest margin. While continuing to invest, we remain vigilant on costs and reap the benefits of the initiatives we have taken on previously with an industry-leading cost-to-revenue ratio at 36.2 percent."

"As a direct result of our investments to increase our diversified fee streams and strengthen our defense lines, and with the flexibility provided by our excess capital, we will continue to demonstrate sustainably high structural profitability and shareholder returns that are among the best in the industry in changing macroeconomic environments. We are unwaveringly focused on building the future and achieving our ambitions for all stakeholders."

UniCredit on Monday closed in the green by 1.9 percent at EUR34.84 per share.

By Claudia Cavaliere, Alliance News reporter

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