Unicredit announcements and targets on dividend payments following the recommendation of the ECB
Following the ECB recommendation , Unicredit confirms that it will not pay dividends and will not repurchase treasury shares in 2020. This initiative does not impact coupon payments on At1 and Cashes bond instruments.
This is what the banking group led by the managing director, Jean-Pierre Mustier points out.
However, should the ECB decide not to extend the recommendation for 2021 and beyond, Unicredit will reinstate the capital distribution policy envisaged by the Team 23 plan in 2021 for the financial year 2020 and subsequent years. This means that Unicredit will distribute, as announced, 50% of the underlying net profit to shareholders.
Again in the event that the ECB does not extend the stop to the distribution of the coupons until 2021, Unicredit will target a cash dividend of 30% of the underlying net profit and a repurchase of treasury shares to 20%.
Depending on the market environment, the Mustier headed group could review the distribution between cash dividends and repurchase of treasury shares.
In addition, the bank intends to maintain, always with the permission of the ECB, the commitment to gradually return the excess capital to the shareholders, for the part above the upper band of its target of 200-250 basis points of additional capital buffer, the MDA buffer on Cet1.
"Starting in 2021 and for the rest of the Team 23 plan, any extraordinary capital distribution will be based on the sustainable surplus of the expected Cet1 MDA buffer," the group announces. To therefore maintain a conservative approach to the calculation of its capital position, Unicredit will already set aside the cash dividend for the fiscal year 2020 at a rate of 30% of the underlying net profit.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/come-si-muovera-unicredit-sui-dividendi/ on Wed, 29 Jul 2020 13:40:02 +0000.