In a nutshell
Solid 2Q25 trends: 2Q25 results were a 32% beat to company compiled (CC) consensus net profit. The strong beat was driven by a cEUR675m positive one-off (cEUR653m from the revaluation of the JVs, cEUR230m from CBK badwill and cEUR207m from other provisions). The operating trends were impacted by a very weak trading income (cEUR192m vs. EUR290m expected) due to the mark-to-market of the hedge position at Commerzbank. NII came in at cEUR3.46bn (vs. EUR3.42bn for consensus) supported by Italy, Germany and Russia. Fees were a 3% miss to consensus although in line with our forecasts. Costs were better/lower than consensus and loan loss charges were also better. On the balance sheet, the loan book posted a decent acceleration QoQ supported by CEE and a recovery in Italy. Customer deposits were flattish in the quarter and down 1% YoY. Credit quality was quite resilient with an NPL ratio at 2.6% and coverage declining slightly to 77% (vs. 81% in 1Q25). CET-1 ratio came in 20bp ahead of consensus and 10bp beat our estimate at 16% which remains quite solid.
Outlook: Unicredit has increased net profit guidance increased to c.EUR10.5bn (from EUR9.3bn), which implies a c.20%. We would note that the difference between distributions and net profit is largely explained by the positive one-off booked in the quarter, which would not be distributable. The increase in net profit is underpinned by three factors: Net revenue increased to EUR23.5bn (from c.EUR23.5bn), supported by NII which now is expected to decline ''mid-single digit'' (vs. moderate = somewhere between mid and high single digit). Unicredit has also improved the cost guidance to be below EUR9.6bn (vs. above EUR9.6bn before). They have kept fees income target at ''up mid-single digit'' vs FY24 and CoR at c.15bps unchanged.
In terms of 27 ambitions, the bank has increased the profit target from EUR10bn to above EUR11bn. The target includes not only the positive operational performance but...
