By Elena Vardon
UniCredit lifted earnings and shareholder-distributions guidance after reporting better-than-expected profit for the second quarter, as the Italian bank looks to turn the page on its aborted takeover bid for smaller peer Banco BPM.
The company now expects to make around 10.5 billion euros ($12.34 billion) in net profit in 2025, up from more than 9.3 billion euros previously, it said Wednesday. Revenue is anticipated to come in above 23.5 billion euros, compared with around that figure previously, though still lower than its 24.84 billion-euro result last year.
For the three months ended June 30, net profit climbed 25% to 3.34 billion euros on several one-offs linked to investments, surpassing a 2.54 billion-euro estimate taken from a consensus compiled by the bank. The jump was driven by a revaluation of UniCredit's holdings in Italian life insurance joint ventures as well as accounting benefits from its equity stake in Germany's Commerzbank, factors that compensated for a softer-than-expected top line.
Revenue for the quarter edged down 3% to 6.13 billion euros, missing consensus' 6.19 billion euros, as net interest income--the difference between what lenders earn from loans and pay for deposits--and fees slipped.
UniCredit has been at the forefront of dealmaking and an active player in European banking consolidation, a trend that has gained momentum as lenders seek to grow and enhance competitiveness amid normalizing interest rates. Chief Executive Andrea Orcel in November launched a 10 billion-euro all-stock bid for Banco BPM to reinforce its position as Italy's second-largest bank by assets and gain scale in the wealthy Lombardy region.
Following a drawn-out battle, the bank withdrew its offer late Tuesday citing opposition from the Italian government, with conditions that Rome sought to impose triggering a legal dispute. "The derailed offer process and continued uncertainty has made this situation untenable," said Chair Pietro Carlo Padoan. The bank described the outcome as a missed opportunity for shareholders as well as for Italy's businesses and economy.
"We have decided to draw a line under this transaction and move on," Orcel told analysts in a results call. The value that the deal was going to provide the lender and its shareholders had gradually faded, he said. "Our Italian business can now fully invest, deploy, and aggressively go after for market share because we're not sitting there waiting for what might be," he added.
Banco BPM said the bid was ultimately unsuccessful because it was inadequate, undervalued the bank and added risks and uncertainty.
In parallel with its pursuit of Banco BPM at home, UniCredit has strategically built stakes abroad. The bank is amassing a 29% position in Commerzbank and raised its holding in Greece's Alpha Bank to 20% in recent months. It expects the consolidation of these stakes to further boost the group's results from 2026 onwards, with net profit expected above 11 billion euros in 2027, up from a previous view of 10 billion euros.
In terms of shareholder payouts, UniCredit now intends to return at least 9.5 billion euros for 2025--half of which will be paid out as a cash dividend. This builds on previous commitments, including a 3.6 billion-euro buyback program which is set to start shortly and an interim cash dividend of 2.1 billion euros which will be paid in November, it said.
UniCredit shares closed 3.6% higher, while Banco BPM shed 2.5%.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
July 23, 2025 12:53 ET (16:53 GMT)
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