UniCredit can come close to achieving its profit target for next year if Europe's economy rebounds as strongly as the bank expects, chief executive Jean Pierre Mustier said after the lender reported its biggest net loss in three years.
Italy’s biggest bank by assets can reach 75-80 per cent of its net income goal for next year, or €3-3.5 billion, if the European Union economy rebounds by 10 per cent as the bank’s economists expect, Mr Mustier said on a conference call.
Italy’s economy went into Europe’s longest lockdown to combat the coronavirus a few months after Mr Mustier set out a new strategy to improve profitability and increase shareholder payouts.
UniCredit expects to review its plan by early next year and the chief executive said on Wednesday that the bank wasn’t setting new targets for 2020 as uncertainty remained too high. The company will decide in the fourth quarter whether to distribute dividends on 2019 earnings.
UniCredit posted a first-quarter net loss of €2.71 billion, as loan-loss provisions climbed to €1.26 billion, and it booked one-off costs for job cuts and the writedown of its Turkish unit.
About €900 million was set aside last month, specifically to deal with the impact of the virus. – Bloomberg