MILAN (Reuters) – Italy’s biggest bank UniCredit on Tuesday pledged to shed more soured loans than previously envisaged as it updated its business plan to 2019 and raised its dividend payout.
In confirming other key targets of its “Transform 2019” plan, UniCredit said it now planned to pay out to shareholders 30 percent of profits in 2019, up from 20 percent previously.
It also raised its post-2019 dividend payout ratio to up to 50 percent once its core capital ratio will be confirmed above 12.5 percent once taken into account all regulatory impacts. The bank said it was confident it would generate enough capital to absorb the hit from regulatory headwinds after 2019.
As previously announced, UniCredit targets a core capital ratio above 12.5 percent in 2019 and a return on tangible equity of more than 9 percent.
It said it would shed an additional 4 billion euros (3.5 billion pounds) in soured loans over the course of the business plan.
(Reporting by Valentina Za; editing by Agnieszka Flak)