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January 31, 2022

UniCredit to return €3.75bn to shareholders; abandons Otkritie Bank deal

Italian lender UniCredit has reported its fourth quarter and 2021 results and announced plans to distribute €3.75bn to shareholders through dividends and share buybacks.

The lender has reported total revenues of €18bn and costs of €9.8bn, with the net profit standing at €3.9bn. 

Concurrently, the lender said it will continue to explore potential mergers and acquisitions after letting go of the Otkritie Bank deal, Reuters has reported. 

“It is our job to review all the opportunities in all the markets where we are … but the bar for M&A is high. We may enter data rooms, talk to others … but those discussions do not mean at all that we’re going to close,” UniCredit CEO Andrea Orcel was quoted by the news agency as saying. 

As part of its 2022-2024 plan, the Italian banking giant plans to spend at least €16bn through a combination of cash dividends and share buybacks.

“I have committed to certain targets in terms of profitability, risk profile, distribution in excess of €16bn and sustainable distribution thereafter. Whatever we do in M&A you should not expect we could derail in any way from those targets,” Orcel said. 

Earlier this month, UniCredit had hired an adviser to review Russia’s Otkritie Bank’s financial data.

However, Orcel has confirmed that the deal has been called off due to rising tensions over Ukraine.

Russian central bank is looking to divest Otkritie Bank, which was nationalised in 2017 after a bailout, through an IPO or sale. 

UniCredit had planned to take a controlling stake in Otkritie Bank in exchange for its local operations that generated $436.19m in revenue in the first nine months of 2021.

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