UNICREDIT

Analysis of UniCredit share price

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Elements that can influence the price of this asset:

Analysis N°1

In 2017 the Unicredit Group implemented a new strategic plan named ‘Transformer 2019’. This totally new strategic plan had the objective of boosting the competitiveness of this company. It is therefore recommended to monitor the progress of this plan.

Analysis N°2

Another opportunity that the Unicredit Group could benefit from regards the rise in clients’ deposits. We note the current significant increase in these deposits in Italy and indeed throughout Europe. It is clear this could greatly assist Unicredit to rebalance its financial results.

Analysis N°3

We also note the strong aptitude of this group in regard to international expansion with numerous efforts made to penetrate new markets.

Analysis N°4

However we know that the current economic situation in Italy is not particularly favourable to the financial services sector especially with the current crisis and its accompanying decrease in consumption and the level of household debt. It this situation persists then this will negatively impact the financial results of Unicredit.

Analysis N°5

Finally, we also know that the European Union is increasingly demanding and strict regarding financial institutions. Therefore, Unicredit must make significant efforts to face the strengthening of these banking regulations that of course lead to a rise in costs for the majority of European banks.

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General presentation of UniCredit

The Unicredit Group is an Italian company specialising in the banking sector. More specifically, the group is currently one of the leading European banking groups.

In order to better understand Unicredit's activities, they can be divided into different divisions according to the share of turnover they generate and in this way:

  • Firstly, commercial banking activities account for the bulk of the group's revenues with 54.7% of turnover.
  • Next come investment banking, financing and market activities with 15.8% of turnover and including leasing, factoring, securities transactions, intervention in the interest rate, foreign exchange, shares and derivatives markets and stock market intermediation.
  • Finally, asset management generates 6.2% of the group's turnover.

The balance of the turnover comes from activities in Poland, Central and Eastern Europe. Unicredit currently markets its products and services through its network of over 6,934 branches worldwide.

Listed on the Italian Stock Exchange, Unicredit's share price is included in the calculation of the FTSE MIB index.

Analysis of UniCredit share price
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The major competitors of UniCredit

We now propose that you discover the competitive environment of the Unicredit company. Here we will present the main players in its Italian sector of activity that are likely to have an influence on its share price.

Intesa Sanpaolo

First of all, we will of course have to follow the Intesa Sanpaolo group which is currently the largest Italian bank. This banking group currently has more than 12 million customers and therefore dominates the Italian market. It also has a strong international presence, particularly in Central and Eastern Europe and the Mediterranean basin.

Cassa Depositi e Prestiti

This other banking group is originally an Italian public body which is 80.1% controlled by the Italian Ministry of Economy and Finance. It is also 18.4% controlled by various Italian banking foundations. Its structure is therefore similar to that of the Caisse des dépôts et consignations.

Banca Monte dei Paschi di Siena

This group, also called MPS and listed on the Borsa Italiana, is another Italian bank but also the oldest global bank still in operation. It was founded in 1472 in Siena, Tuscany. It has been in continuous operation ever since.

UBI Banca

Also known as Union Banche Italiane, this is an Italian bank created in April 2007 from the merger between Banche Popolari Unite or BPU Banca and Banca Lombarda e Piemontese. The bank's head office is located in Bergamo, Lombardy.

Banco BPM

We will also follow closely the Banco BPM banking group, which is another of the leaders in the Italian banking sector. This one was formed from the merger in January 2017 of Banco Popolare and Banca Popolare di Milano. The group has two headquarters, one in Milan and the other in Verona.

Mediobanca

Finally, the last competitor of Unicredit is undoubtedly Mediobanca which is an Italian investment bank that is this time specialised in financial advice and asset management. This group is also listed on the Milan Stock Exchange and is also present elsewhere, in Paris, London and New York. It is still one of the leaders in the sector.


The major partners of UniCredit

Unicredit continues to pursue its development in Italy as well as abroad, notably through strategic alliances with different companies. Here are details on some of the more significant partnerships the group has implemented in recent years.

Renault & Nissan

The Renault and Nissan groups created a financial joint venture in Russia with the Unicredit Group in 2013.

IBM

Still in 2013 IBM completed a ten year partnership with the Unicredit Company specialised in banking and financial services. IBM enabled Unicredit to move its IT infrastructure into the cloud.

Amundi

Unicredit and Amundi finally announced their signature of a partnership agreement in 2014 relating to financing the real economy through loans funding for German SMEs. This initial transaction raised 25 million Euros.

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The factors in favour of a rise in the UniCredit share price:

Firstly, it should be remembered that the Unicredit group has an advantageous position in its activity sector, which is that of banking. At present this banking group is still the largest in Italy which confers a certain stability against its national competitors.  However Unicredit also benefits from a positive position in Europe itself, outside of its native Italy. This means that this banking group is one of the European leaders in the financial services sector which is obviously a major advantage.

Unicredit also benefits from a strong and recognisable brand name in Italy and indeed throughout Europe. This reputation has contributed to a brand image that has grown stronger over time and has even become a point of reference in certain consumer groups.

From a geographical point of view, it should be noted that the Unicredit Group has successfully expanded its operations throughout Europe and indeed even in other countries worldwide.  Unicredit currently employs no less than 170,000 people in 22 different countries.

To conclude, investors and shareholders in this asset are also equally reassured by the particularly healthy financial situation of the Unicredit Company, whereas the majority of banks face criticism on this point and appear to have trouble respecting the current European standards. We can particularly note as a strong point this bank’s ability to continue decreasing its operating costs over recent successive years.

The factors in favour of a drop in the UniCredit share price:

Firstly, although the Unicredit group is renowned as being one of the major financial groups in Europe we also note that the assets it holds are fairly weak in quality which weighs heavily on the investors attitude and means that the company is often criticised and found wanting by analysts.

Concerning the revenue of this group, here we find another major weak point. In fact, the figures relating to the remuneration of this banking group are insufficient and fairly weak relative to the expectations of specialists. The operating profits from the company notably show signs of weakness and display a consistent fall over recent successive years despite the particularly well managed operating costs. Unicredit therefore needs to increase their efforts to achieve a more balanced profitability level.

Despite the recent overhaul of the company’s financial situation, Unicredit continues to experience repercussions of its preceding ill luck. In fact, in 2015 this banking group found itself unable to satisfy the requirements of the SREP regarding funds. This event caused many problems for the company and led to a significant decrease in its share price on the stock markets. Although the situation is more positive and optimistic nowadays numerous investors are still wary regarding this bank. This sanction by the markets was boosted by the announcement regarding the performance for the 2016 financial year. During the course of this year the group displayed signs of weakness with a performance that was generally much weaker than the average shown by the EBA. Still in 2016, the group recorded extremely high non recurring expenses in its annual financial returns.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What is the return and profit of Unicredit shares?

Currently, and for the 2019 financial year, the return per share of the Unicredit Company is 7.51%. It was 8.02% in 2018 and the provisional return for 2020 is estimated at 7.87% at present. Relating to the net profit per share it was decided to pay €1.60 per share to shareholders for the 2019 financial year and the profit per share is estimated to be €1.69 for 2020. We note that for 2018 this figure was €1.46 per share.

Where can you find the financial results and information on the Unicredit Group?

If you wish to know the most recent financial data available regarding the Unicredit Group as well as publications, pertinent news and events and announcements or historical financial information then we recommend you visit the investors’ section of the company website. Among the information you can discover here you will notably find the fixed calendar of expected publications and announcements as well as complete and precise annual and quarterly financial results.

What is the annual performance of Unicredit shares?

Over the last year, in 2019, the lowest price of Unicredit shares was €6.42 and the highest share price was €14.44. The average trading volume of this asset per month was 38,749,706 at an average price of €9.27. Of course, this information is likely to change over time and we recommend you stay up to date using the charts directly available from your broker.

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