General presentation of the Unicredit Company:
Unicredit is an Italian Group that is one of the leaders in the European banking sector. Its activities touch several banking activities including individual and corporate banking, investments, market financing and wealth management. Another part of its revenue is generated by its activities in Poland as well as Central and Eastern Europe.
With no less than 9,000 agencies throughout the world Unicredit manages over 400 billion Euros in deposits and 500 billion Euros in outstanding loans.
Know the competition to Unicredit shares:
Unicredit is still the largest Italian bank and continues its efforts to expand throughout Europe. However it has to face stringent competition from other large banks in this area. Here is a list of the major Italian banking groups that we strongly recommend you learn more about before starting to trade in Unicredit shares online in order to refine your fundamental analysis regarding the Italian banking sector.
- Intesa Sanpaolo
- Cassa Depositi e prestiti
- Monte Dei Paschi di Siena
- UBI Banca
- Banco BPM
- Banca Nazionale del Lavoro
Strategic alliances implemented by the Unicredit Group:
Unicredit continues to pursue its development in Italy as well as abroad, notably through strategic alliances with different companies. Here are details on some of the more significant partnerships the group has implemented in recent years.
- Renault & Nissan: The Renault and Nissan groups created a financial joint venture in Russia with the Unicredit Group in 2013.
- IBM: Still in 2013 IBM completed a ten year partnership with the Unicredit Company specialised in banking and financial services. IBM enabled Unicredit to move its IT infrastructure into the cloud.
- Amundi: Unicredit and Amundi finally announced their signature of a partnership agreement in 2014 relating to financing the real economy through loans funding for German SMEs. This initial transaction raised 25 million Euros.
Introduction and quotation of the Unicredit share price:
As it is quoted on the Italian stock markets, the share price of the Unicredit Company is included in the calculation of the MIB FTSE index.
Here are a few events that you should be aware of to be able to correctly analyse the historical stock market charts and thereby make pertinent conclusions and decisions.
- In the year 2000, the Unicredit Group acquired the largest bank in Croatia, Aagrebacka Banka, as well as Demirbank in Romania and Zivnostenka Bank in the Czech Republic. It then acquired Pioneer Global Asset Management in the United States and became a partner of the Koc Group in Turkey.
- In 2005 Unicredit merged with Hypi Vereinsbank, the second largest German bank, for the amount of 19.2 billion Euros in exchange for shares and with the HBV minorities in Bank Austria and the Polish bank, BPH.
- In 2007, the group acquired Capitalia, the fourth largest Italian banking group, for 22 billion Euros in shares and thereby came to hold the second largest stock market capital in this sector in Europe and the leader in the Euro zone.
- In 2008 during the subprime crisis Unicredit, leader of the Italian banking sector, called on the market in a bid to raise 6.3 billion Euros.
- In 2012 Unicredit raised 7.4 billion Euros and announced the loss of nearly 6,150 jobs.
- In 2014 Unicredit announced the loss of 15 billion Euros for the fourth quarter of 2013 together with the loss of 8,500 jobs over a period of four years.
- In 2015, Unicredit merged its asset management subsidiary, Pioneer, in the United States, with that of Santander, Santander Asset management, after the failure of Santander to pass stress testing. In the same year Unicredit announced the loss of over 18,200 employment positions for 2018 including 6,000 due to the sale of its activities in the Ukraine and the sale of its joint asset management company with Santander. At the same time the group announced the closure of 800 branches.
- In 2016, Amundi announced the acquisition of Pioneer for 3.75 billion Euros and Unicredit succeeded in raising 13 billion Euros in funds.
The advantages and strong points of Unicredit shares as stock market assets:
Firstly, it should be remembered that the Unicredit group has an advantageous position in its activity sector, which is that of banking. At present this banking group is still the largest in Italy which confers a certain stability against its national competitors. However Unicredit also benefits from a positive position in Europe itself, outside of its native Italy. This means that this banking group is one of the European leaders in the financial services sector which is obviously a major advantage.
Unicredit also benefits from a strong and recognisable brand name in Italy and indeed throughout Europe. This reputation has contributed to a brand image that has grown stronger over time and has even become a point of reference in certain consumer groups.
From a geographical point of view, it should be noted that the Unicredit Group has successfully expanded its operations throughout Europe and indeed even in other countries worldwide. Unicredit currently employs no less than 170,000 people in 22 different countries.
To conclude, investors and shareholders in this asset are also equally reassured by the particularly healthy financial situation of the Unicredit Company, whereas the majority of banks face criticism on this point and appear to have trouble respecting the current European standards. We can particularly note as a strong point this bank’s ability to continue decreasing its operating costs over recent successive years.
The disadvantages and weak points of Unicredit shares as stock market assets:
Firstly, although the Unicredit group is renowned as being one of the major financial groups in Europe we also note that the assets it holds are fairly weak in quality which weighs heavily on the investors attitude and means that the company is often criticised and found wanting by analysts.
Concerning the revenue of this group, here we find another major weak point. In fact, the figures relating to the remuneration of this banking group are insufficient and fairly weak relative to the expectations of specialists. The operating profits from the company notably show signs of weakness and display a consistent fall over recent successive years despite the particularly well managed operating costs. Unicredit therefore needs to increase their efforts to achieve a more balanced profitability level.
Despite the recent overhaul of the company’s financial situation, Unicredit continues to experience repercussions of its preceding ill luck. In fact, in 2015 this banking group found itself unable to satisfy the requirements of the SREP regarding funds. This event caused many problems for the company and led to a significant decrease in its share price on the stock markets. Although the situation is more positive and optimistic nowadays numerous investors are still wary regarding this bank. This sanction by the markets was boosted by the announcement regarding the performance for the 2016 financial year. During the course of this year the group displayed signs of weakness with a performance that was generally much weaker than the average shown by the EBA. Still in 2016, the group recorded extremely high non recurring expenses in its annual financial returns.