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UniCredit S.p.A. has kicked off the European banking earnings season with a stellar performance, surpassing analyst expectations and raising its full-year guidance, buoyed by robust core revenues and pristine asset quality.
The Milan-based lender posted a record net profit of €3.3 billion in the second quarter of 2025, lifting its first-half earnings to €6.1 billion.
Earnings per share surged to €2.16, up 34% year-on-year and well ahead of the €1.55 forecast.
Core revenue rose 1.3% annually to €5.9 billion in the quarter.
According to the bank, these results are transforming what was meant to be a “transitional year into the best year ever.”
“UniCredit has achieved outstanding financial results, with a record-breaking Q2 contributing to the best H1 in the bank’s history,” said Chief Executive Officer Andrea Orcel.
“We are protected for the future as our low cost of risk, strong asset quality and unmatched overlays safeguard against potential macroeconomic downturns,” he added.
Upgraded outlook and investor payouts
In a further sign of confidence, UniCredit raised its full-year 2025 net profit guidance to approximately €10.5 billion, up from a prior target of more than €9.3 billion. The bank also lifted its net revenue outlook to above €23.5 billion and upgraded its return on tangible equity (ROTE) forecast to around 20%, from previously over 17%.
Longer-term projections were also improved, with 2027 earnings now expected to reach at least €11 billion, up from circa €10 billion. The bank raised its distribution guidance to equal to or above €9.5 billion for 2025, including a cash dividend of at least €4.75 billion. An interim cash dividend of about €2.1 billion is envisaged, representing a 46% increase year-on-year, with the ex-dividend date set for 24 November.
In addition, a €3.6 billion share buy-back programme is slated to commence following the second-quarter results.
Goldman Sachs analyst Chris Hallam praised UniCredit’s “beat and raise” performance, highlighting the bank’s continued earnings momentum and shareholder-friendly capital distribution.
Balance sheet resilience and strategic clarity
UniCredit’s gross non-performing exposure (NPE) ratio remained stable at 2.6%, while the cost of risk stayed at a low nine basis points in the first half—underscoring the group’s asset quality and prudent provisioning.
Separately, UniCredit withdrew its offer for Banco BPM, citing unresolved conditions linked to Italy’s golden power regulations.
Orcel noted that the ongoing uncertainty surrounding the authorisation process did not benefit shareholders or the bank, prompting the decision to pull the deal.
While progress had been made with the Italian Administrative Tribunal (TAR), the European Commission’s Directorate-General for Competition and the Italian government, the bank concluded that the timeline for resolving the regulatory hurdle exceeded the offer window.
Market reaction and sector momentum
Investors responded positively to the results and upgraded guidance.
UniCredit shares rallied 2.6% in early Wednesday trading to €59.60, bringing year-to-date gains to 54%. The stock surged 56% in 2024 and 85% in 2023, making it one of Europe’s best-performing financials.
The Euro STOXX Banks index advanced 1.4%, outperforming the broader Euro STOXX 600, which rose 0.9%.
Peers including Deutsche Bank, Banco Bilbao Vizcaya and Nordea Bank each gained 1.5%, while BNP Paribas rose 1.1% ahead of its second-quarter earnings release on Thursday.
