Italy's UniCredit guides 2025 revenue slowdown after fourth-quarter profit beat

cnbc.com:

Italy's second-largest lender UniCredit on Tuesday posted a fourth-quarter profit beat, but guided a slight slowdown in 2025 revenues amid expected declines in net interest income.

Net profit attributable to the group came in at 1.969 billion euros ($2.03 billion) in the fourth quarter, compared with an analyst forecast of 1.803 billion euros, according to a LSEG-compiled consensus.

Revenues reached 6 billion euros over the period, versus analyst expectations of 5.898 billion euros.

Other fourth-quarter highlights included:

The lender, whose full-year net profit added an annual 8.1% to 9.31 billion euros, pledged bolstered shareholder returns in 2025, upping its cash dividend pay-out guidance to 50% of net profit, from 40% in 2024. UniCredit also said it targets a RoTE performance above 17% over 2025-27, compared with the 17.7% of 2024.

In a statement accompanying the results, CEO Andrea Orcel said UniCredit was progressing onto the next phase of its strategy and will accelerate its «growth, aspiring to further widen the gap with our competitors, close our valuation gap, and cementing UniCredit as the bank of Europe's future and benchmark for banking.»

Despite this, the bank guided for full-year revenues of above 23 billion euros in 2025, below the 24.8 billion euros achieved last year, reflecting the «further compression» of UniCredit's business in Russia and «moderate decline» in expected net interest income, or the difference between lender earnings on loans and costs on deposits. The European Central Bank has been calling on UniCredit to pare down its Russian operations following the war in Ukraine.

Amid these downside pressures, UniCredit says it expects full-year 2025 fees to be up a «mid-single digit percentage