UniCredit Secures ECB Approval for €3.34Bn Share Buyback

UniCredit S.p.A (UniCredit), an international banking group headquartered in Milan, announced Tuesday (March 28) that it has received ECB authorization for the execution of the 2022 share buy-back programme for a maximum of Euro 3,343 million. The move gives a boost to the stock price at a time of deep uncertainty for the banking sector following the failure of some regional lenders in the United States and Credit Suisse's rescue merger with rival UBS.

The bank's share price rose significantly on the day of the announcement, closing at 17.15 euros, and continued to rise the next day, closing at 17.25 euros yesterday (March 29).

"Combined with the robustness of the liquidity position, these ensure that the business can weather stress scenarios from a position of strength," said the bank in its latest announcement.

Together with the proposed dividend this leads to a total 2022 distribution of Euro 5.25 billion: an increase of 40% versus 2021. Proforma for this distribution UniCredit's CET1 ratio is 14.9% as at 2022 year end and is expected to increase further in 1Q 2023.

According to the announcement, commencement of the buy-back programme, as well as the dividend for a maximum of Euro 1,906,562,000, is dependent upon the approval by shareholders of the Company at the Shareholders' Meeting convened on 31 March 2023. 

The Italian bank stated that it would execute the share buyback in two tranches. The first one worth €2.34 billion to start as soon as possible upon receiving approval from AGM, and the second tranche of circa €1.0 billion is expected to commence during the second half of 2023.