UniCredit starts 1.7 billion euro share buyback in top payout pledge

UniCredit said it will start repurchasing as much as 1.7 billion euros (S$2.44 billion) of its own stock as it delivers on the biggest payout pledge among European banks. 

The buyback will start on Monday (Sep 16) and may be completed by November, the Milan-based lender said in a statement. Morgan Stanley will act as a broker and independently decide on the stock purchases.

Chief executive officer Andrea Orcel has pledged to return 10 billion euros to shareholders this year, the most among Europe’s top banks, according to filings reviewed by Bloomberg. UniCredit, which this month disclosed that it may be interested in a potential takeover of German rival Commerzbank, has said its purchase of a 9 per cent stake in the German lender won’t affect its distribution policy. 

The European Central Bank, which supervises the bloc’s lenders, has authorised the stock repurchase, the Italian bank said earlier this month.

European banks are boosting payouts after a rapid sequence of interest rate hikes kicked off by the ECB two years ago turbocharged their profits. BLOOMBERG