Unicredit overlooking the Ftse Mib. The reasons for the sell-off

A really bad day for Unicredit which lost ground for the third session in a row, with a movement in clear contrast to the Ftse Mib.

Unicredit in check: at the bottom of the Ftse Mib at close

The stock, after having lost more than one percentage point yesterday, immediately took the path of sales today, progressively accelerating downwards.

At the end of the session, Unicredit stopped at € 13.61, with a drop of 3.23% fueled by high trading volumes, given that over 40 million shares have passed through the market, more than double the average of the last 30 even days. to approximately 18.5 million.

Unicredit: rumor on interest for the Russian bank Otkritie

On the title, sales were triggered in the wake of some press rumors that made the market turn up its nose.

As reported by Bloomberg, Unicredit could be among the parties interested in the acquisition of the Russian bank Otkritie and could enter the data room during the week.

Otkritie, a leading Russian bank, was nationalized in 2017 following a bailout caused by excessive amounts of NPLs.

The Russian Central Bank started the process of divesting its 100% stake in the bank in the summer. The exit from the capital could take place through the sale to a counterparty or through an IPO.

Unicredit: Otkritie’s photography

Based on data for the first nine months of 2021, Otkritie has assets of 45 billion euros, about 5% of Unicredit’s assets, and a net worth of 6.5 billion euros.

The bank is characterized by good asset quality with an NPE Ratio of 6.1% and a high level of coverage of 95%. From the point of view of capital, the Tier 1 Ratio is equal to 14.4%.

Equita SIM analysts recall that Otkritie closed the first 9 months of 2021 with an operating profit of 0.9 billion, up 61%, and a net profit of 700 million, an increase of 94%, reporting a ROE more than 15%.

Unicredit: what effects from the deal? Equita sees high risks

The transaction would make it possible to significantly increase the weight of the Eastern Europe division: Equita SIM analysts estimate + 80% at the bottom line division.

The deal would also have a considerable weight on both turnover and group profits, in the order of 13% and 25% respectively.

In order to express an opinion on the transaction, according to Equita SIM, the growth rates of the bank’s profits in a medium-term perspective, the terms possibly agreed with the Russian Central Bank for the acquisition and evaluation of the target bank would remain to be assessed.

However, analysts believe that a transaction of this type is characterized by a non-negligible execution risk, although partially mitigated by the fact that Unicredit is already present in the country, as well as significantly increasing exposure to a reality with a high geopolitical risk.

Pending news on the transaction, Equita SIM analysts maintain a bullish view on the stock, with a “buy” recommendation and a target price of 16 euros.

Unicredit: Intesa Sanpaolo and Jefferies comment on the latest rumors

Intesa Sanpaolo also confirmed a positive opinion on Unicredit, which today reiterated the “buy” rating with a target price of 16.9 euros.

Analysts recall that the group led by Orcel is already present in Russia, but the acquisition mentioned in the press goes beyond the small ones indicated in the strategic plan.

The danger is that with Otkritie the risk profile of the Eastern Europe division could be changed, with a significant increase in the weight of Russia equal to 5 times the risk weighted asserts.

Doubts are also expressed by colleagues at Jefferies, according to which a possible acquisition of Otkritie would not convince investors due to the difficult political situation and the size of the potential deal.

Trend-online Deputy Director, born in 1978.
After completing his studies at the Classical High School “Antonio Calamo” of Ostuni I entered the world of economics.
For about twenty years I have been dealing with Stock Exchange and Finance. After having worked as a financial promoter for several years, in 2005 I joined the Trend-online team as an editor, to later become deputy director of the cylinder head. Among other countless activities, I take care of maintaining relationships with all the experts, analysts and traders, consulted daily by Trend-online.

My motto is? “Life is like a mirror, if you look at it smiling it will smile at you”.

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