Company Reports

UniCredit's income statement for the second quarter of 2026 told a familiar story: flat net interest income with fee and insurance income doing the heavy lifting for a 7% growth in overall revenue. The 8% surge in lending was, however, ahead of our expectations and that of consensus.

The transformation of UniCredit in two years from a perennial underperformer to one of the most profitable banks in Europe has been astounding. While the new management team has made good strategic decisions, the return to positive interest rates after a decade of zero or negative interest rates played a significant role in its transformation.

SpaceX has filed for one of the largest IPOs in history, with Anthropic and OpenAI expected to follow in the most significant fundraising cycle in years. No European bank holds a lead equity arranger role; that honor belongs to five US banks.

UniCredit has launched an all-share tender offer for Commerzbank. Management was explicit that it does not seek control.

European banks have declined around 10% from their highs as rising oil and gas prices and the prospect of higher-for-longer interest rates fuel fears that loan defaults will rise.

UniCredit earned EUR 10.4 billion in net profit in 2025, a record for the third consecutive year, and launched a five-year plan targeting EUR 15 billion in net profit and a 25% return on tangible equity by 2030. We have materially upgraded our forecasts.

The transformation of UniCredit in two years from a perennial underperformer to one of the most profitable banks in Europe has been astounding. While the new management team has made good strategic decisions, the return to positive interest rates after a decade of zero or negative interest rates played a significant role in its transformation.

The transformation of UniCredit in two years from a perennial underperformer to one of the most profitable banks in Europe has been astounding. While the new management team has made good strategic decisions, the return to positive interest rates after a decade of zero or negative interest rates played a significant role in its transformation.

UniCredit reported 8% growth in net income after excluding extraordinary effects from trading despite declining net interest income and flattish fee income. UniCredit withdrew its offer to acquire rival BPM, and the market reacted positively, with the share price up 5% on July 23.

Investors dumped European banks for a second day on April 4 as concern over US tariffs spreads. The 22 banks we cover declined by 11% over the last two days. UniCredit (minus 16%) and Barclays (minus 15%) led the decline, while Svenska Handelsbanken and Credit Agricole fared better, each down 7%.

UniCredit received the green light from the European Central Bank to bring its stake in Commerzbank to 29.9%, allowing the Italian lender to advance its efforts for a potential takeover. We maintain our EUR 19.60 and EUR 35 fair value estimates for Commerzbank and UniCredit, respectively. We had previously assigned a high likelihood of a positive ECB decision. UniCredit believes that a decision to extend its shareholding in Commerzbank beyond the now approved 29.9%, will likely be taken in 2026, citing discussions with antitrust and key shareholders to extend the timeline. We expect Commerzbank’s efforts to make its case to remain independent will accelerate even further.

In its updated guidance at the fourth-quarter earnings call, UniCredit anticipates generating a net profit of EUR 10 billion by 2027. The bank reported a net profit of EUR 10.3 billion for 2024, excluding non-recurring items. Considering the adverse impact of lower interest rates, this outcome is positive, especially as EPS and DPS growth could benefit significantly from share buybacks.

Three months after UniCredit announced it was building a stake in Commerzbank, it made a EUR 10 billion all-share offer for its Italian rival, Banco BPM. We are more supportive of the BPM proposal than a possible takeover of Commerzbank. We think the cost-saving potential of the BPM deal is more substantial, we like the asset- and wealth-management capabilities that UniCredit will acquire, and we view Italy as a more attractive banking destination than Germany.

During its third-quarter 2024 results presentation, UniCredit outlined various measures around revenue/fee growth, cost efficiency, and profitability where its German operation, HVB, performs better than Commerzbank. UniCredit believes it can lift Commerzbank's performance to match that of HVB. One could also use the same measures to argue against a merger. UniCredit runs the risk of diluting its overall profitability and growth trajectory and HVB by combining with a rival that may suffer from company-specific structural constraints that could be challenging to overcome.

No-moat UniCredit reported a net profit of EUR 2.5 billion for the third quarter of 2024, 8% higher than a year ago and 10% higher than the company compiled consensus estimate. Net profit declined by 6% compared with the second quarter of 2024, primarily because of higher loan-loss provisions. Notably, net interest income (nearly 60% of revenue) held up better than we and consensus expected.

Under newly appointed CEO Bettina Orlopp, formerly CFO, Commerzbank updated its strategy, which could be seen as an attempt to push back against UniCredit’s potential takeover attempt. The new strategy targets a 12% return on tangible equity by 2027, up from 11.5% previously. Commerzbank primarily sees better income generation in its noninterest-related business, which improves operating efficiency and drives slightly better profitability. The bank also highlighted its intention to distribute about 90% of profits to shareholders in 2027. We maintain our EUR 15.80 per-share fair value estimate.

No-moat UniCredit announced that it acquired 9% of no-moat Commerzbank. We estimate that UniCredit paid around EUR 1.5 billion for the stake, about 2.5% of its own market value. It seems UniCredit intends to increase its stake in the future.

UniCredit achieved another quarter of record results, extending its three-and-a-half-year growth streak. We commend UniCredit's structural changes in loan loss provisions that have improved loan book quality while maintaining stable margins over the last two years. With one of the industry's lowest cost/income ratios, UniCredit remains highly profitable, even with material excess capital. With net interest margin expansion clearly a thing of the past, attention will shift to other levers UniCredit can pull. We are therefore impressed by the robust fee income growth and sound cost containment evident in the second quarter. Excess capital is a nice problem to have, but there will be more demands from the market that UniCredit speeds up the deployment or return of excess capital. We have slightly raised our fair value estimate to EUR 35 from EUR 33 per share.

The transformation of UniCredit in two years from a perennial underperformer to one of the most profitable banks in Europe has been astounding. While the new management team has made good strategic decisions, the return to positive interest rates after a decade of zero or negative interest rates played a significant role in its transformation.

The transformation of UniCredit in two years from a perennial underperformer to one of the most profitable banks in Europe has been astounding. While the new management team has made good strategic decisions, the return to positive interest rates after a decade of zero or negative interest rates played a significant role in its transformation.