UniCredit to Increase Shareholder Returns From 2019; Adjusts NPE Targets

By Pietro LombardiFeaturesDow Jones Newswires

Italian lender UniCredit SpA (UCG.MI) said Tuesday that it would increase its shareholder returns from 2019 and announced the self-funded full rundown of its non-core non-performing exposures by 2025.

Italy's largest lender by assets said would increase its 2019 dividend payout--to be paid in 2020--to 30% from 20%. After that, the bank may increase the payout ratio to up to 50%.

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The bank said it now expects to beat its 2019 gross NPEs reduction target, with gross NPEs now expected to fall by an additional 4 billion euros ($4.72 billion). The bank now targets gross NPEs of EUR40.3 billion in 2019, compared with EUR77.8 billion in 2015.

Non-core gross NPEs are expected to decline to EUR17.2 billion in 2019, it said. The previous target was EUR19.2 billion.

"Today, we are also announcing the self-funded full rundown of our non core NPEs portfolio by the end of 2025," Chief Executive Jean Pierre Mustier said.

"UniCredit's Transform 2019 plan is fully on track and is yielding early positive results underpinned by renewed commercial dynamics throughout the Group," Mr. Mustier added.

UniCredit confirmed its key targets for 2019, including a return on tangible equity--or RoTE--of at least 9% and revenues of EUR20.6 billion.

The bank also confirmed it is targeting a fully loaded capital equity tier 1 ratio--a key measure of capital strength--of at least 12.5% in 2019.

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

(END) Dow Jones Newswires

December 12, 2017 03:06 ET (08:06 GMT)