Milan-based UniCredit posted a €1.18bn quarterly loss after taking a goodwill impairment at its corporate and investment banking division and as Jean Pierre Mustier stepped down as chief executive.
The loss is almost double what analysts had expected. The Italian lender said on Wednesday it had accelerated its balance sheet clean-up and strengthened its core capital, paving the way for a proposed capital distribution of €1.1bn through dividends and share buybacks.
The bank’s net profit for the full year of 2020 was €1.3bn, thanks to lower costs ahead of guidance of €800m.
“UniCredit’s underlying net profit was impressive, given the impact of Covid-19 on all markets and the €5bn in loan loss provisions,” said Mustier on his last day as chief executive.
The Frenchman announced he was leaving the bank last year following clashes with the board. His successor, Andrea Orcel, a former UBS investment banker, will join the bank after the general assembly in April.
The lender said it had appointed its co-chief operating officer, Ranieri de Marchis, as general manager pending Orcel’s arrival.
“Andrea brings a wealth of experience to the bank and an impressive track record in international finance. He is well placed to take UniCredit on the next leg of its journey,” Mustier said in a statement.
Orcel’s first task will be deciding whether to take over beleaguered state-owned lender Monte dei Paschi di Siena, as the Italian government has demanded.
Monte dei Paschi is one of the issues that proved most contentious between Mustier and the board. While international investors have voiced scepticism over the tie-up, analysts expect Orcel to get the deal done if he can secure convenient conditions for shareholders.
The incoming chairman told Italian media last week that UniCredit would look at several deal options, not just at Monte dei Paschi.
“A solid set of results for [UniCredit] but questions on outlook likely to persist,” said Benjie Creelan-Sandford, a Jefferies analyst.