As expected, 1Q was better than expected As the last Italian bank to report this earnings season, UniCredit''s 1Q25 numbers largely followed its peers'' key trends: solid and in-line NII, 6% better fees than anticipated, strong trading profits, lower costs and resilient asset quality, with high capital generation. All this drove a 17% bottom-line beat, and all group items were satisfactory this quarter. We highlight the CET1 ratio, coming in at 16.1% - a large beat to consensus at 15.3%, driven by RWA efficiencies and a lower Basel IV impact than targeted. For a bank that is committed to deploying excess capital, this is positive. Guidance taken an inch higher, we still see upside UniCredit''s strong 1Q numbers led it to upgrade its FY25 guidance: net profit target now at EUR9.3bn (vs flat YoY), and the bank highlights there is potential upside. Revenues (net of CoR) are now expected at c.EUR23.5bn from EUR23bn, whilst the bank posted c.EUR6.5bn in 1Q25 alone. Finally, on the back of the capital beat, UniCredit''s excess capital now stands at EUR8.5-10bn (EUR7.5bn excl. volatile items). Overall, as we wait for the bank to assess whether a Banco BPM takeover still makes sense after considering the Italian government restrictions, UniCredit''s investment case remains one of very high structural profitability, protected by provisioning overlays, flat costs and a high level of excess capital committed to deployment. A European top pick - maintain O/P with EUR68 TP (from EUR65) We upgrade our EPS by low single digits on the back of stronger fees and trading plus slightly lower provisions, supported by the good performance of the loan book. We note that our new target price (EUR68) also reflects the strong capital build in the quarter, which further increases the excess capital that the bank could deploy to further improve EPS growth through inorganic growth or incremental shareholder returns. +5 topics to discuss with management included in the note