Italy’s UniCredit reported better-than-expected second-quarter profits on Wednesday and said it would acquire a Belgian digital bank with its own cloud IT platform for 370 million euros ($401 million).
UniCredit, led since 2021 by former UBS investment banking chief Andrea Orcel, has been at the center of speculation over potential mergers and acquisitions after failed attempts to launch an attack on Commerzbank and Italian bank BPM.
UniCredit said the acquisition of Belgian bank Aion and its core cloud-based banking system Voden will add a team of 200 engineers, developers and data scientists.
Banks around the world are facing the challenge of migrating legacy IT systems to the cloud. To address this issue, UniCredit rival Intesa Sanpaolo is partnering with UK cloud banking technology provider ThoughtMachine.
Italy’s UniCredit said: “This transaction is one of the first steps for the bank to fully master a new technology that does not rely on third-party core banking providers.”
Second-quarter net profit increased 5% from the previous three months to 2.7 billion euros, exceeding the average 2.4 billion euro forecast of analysts surveyed by the bank because revenue performance was better than expected.
September 29, 2023, Milan, Italy, from the perspective of the Lombardy Palace, the logo of Italian international banking group UniCredit stands on the facade of the group headquarters in Porta Nuova.
Emanuele Cremaschi | Getty Images News | Getty Images
As euro zone interest rates peak, Italian banks have vowed to raise net charges to cover the narrowing gap between lending and deposit rates, which has driven record profits in recent quarters.
UniCredit said net loan income fell 0.4% from April to June compared with the first quarter, but expenses rose 0.9% quarter-on-quarter and 10% year-on-year.
Total revenue during the period fell 0.7% quarter-on-quarter to 6.3 billion euros, lower than expected.
UniCredit Bank slightly raised its full-year revenue forecast to more than 23 billion euros, but maintained its target of net profit exceeding 8.5 billion euros in 2024. It plans to distribute at least 90% of its funds to shareholders, primarily through share buybacks.
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