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The Euromoney 25

UniCredit: Turning a new page

UniCredit entered the Covid-19 crisis flush with capital. That money was earmarked for dividends and share buybacks. So far, it has gone on frontloading loan write-offs.

Jean Pierre Mustier
Jean Pierre Mustier, CEO of UniCredit

Just a few weeks before Covid-19 arrived in Europe, chief executive Jean Pierre Mustier had predicated UniCredit’s 2020-2023 plan on a new commitment to returning capital to shareholders. Dividend payouts were to rise and share buybacks were promised for the first time in 10 years.

The European Central Bank’s effective ban on dividends and buybacks in late March might therefore have brought a special frustration for Mustier and his efforts to boost UniCredit’s share price. Yet the fact that the bank had accrued €7 billion of additional capital through asset sales in 2019 to ramp up payouts and buybacks may have been a bit of luck in the circumstances.

The asset sales in 2019 included the bank’s exit from its joint venture in Turkey and sales of large minority stakes in Finecobank and Mediobanca.

Investors might have treated UniCredit with even more caution if it had not had the proceeds as Covid hit.

“We

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