UniCredit, the Italian bank, has announced its decision not to pay the Italian windfall tax following better-than-expected third-quarter earnings. The bank has chosen to allocate 1.1 billion euros ($1.17 billion) to its nondistributable reserve rather than contributing to the windfall tax, which was recently approved by the country’s parliament.
In the third quarter, UniCredit reported a net profit of EUR2.32 billion, a significant increase from EUR1.71 billion in the same period last year. The bank also saw a 24% year-on-year growth in revenue, amounting to EUR5.97 billion. Net interest income, a key revenue metric for the bank, rose by 2.9% compared to the previous quarter and by 45% compared to the same period last year, reaching EUR3.6 billion.
UniCredit’s financial performance exceeded expectations, with analysts predicting EUR1.92 billion in net profit, EUR3.5 billion in net interest income, and EUR5.74 billion in revenue.
The bank highlighted consistent growth across all regions and emphasized cost management, as operational costs remained flat compared to the previous quarter and declined 2.3% year-on-year.
Despite facing a slight decrease in average gross commercial performing loans and average commercial deposits, UniCredit remains optimistic about its future prospects. The bank raised its 2023 guidance for net interest income to at least EUR13.7 billion and expects 2023 net revenue to exceed EUR22.2 billion. Furthermore, UniCredit aims for a net profit of at least EUR7.25 billion and plans to distribute at least EUR6.5 billion to shareholders in 2024.
UniCredit’s strong performance in Q3 solidifies its position as a leading player in the Italian banking sector and demonstrates its commitment to maximizing value for its shareholders.