European banks’ (and Unicredit’s) record: 100 billion profit in 2023

Given high interest rates and a credit crunch, 2023 has been a tough year for those with or trying to get a variable mortgage. But on the other side of the fence are those who can crack open the champagne bottles and obtain dream dividends and bonuses for shareholders and employees: Europe’s leading banks have actually closed their accounts last year, recording more in total. It made a profit of 100 billion euros. A quota that has never been reached before.

Bloomberg reports this based on the balance sheets of Europe’s 20 largest banks (excluding Swiss UBS). Although these institutions have already made a total profit of 78 billion in 2022, last year the profit increased to 103 billion. Almost a tenth of this huge profit was collected by the Italian Unicredit (9.5 billion), which, together with the French BNP Paribas, leads the ranking of the best-performing banks on the continent (in terms of profit, of course).

The record can certainly be traced to the increase in interest rates implemented by the ECB to curb inflation. For example, the bulk of Unicredit’s income comes precisely from interest (14 billion, with a growth of 31.3% compared to 2022. Shareholders who benefited from these profits were, first of all, those who were able to receive mind-blowing dividends , in general, they also received quite good bonuses.And in 2023 Finally, Italian bankers finally got the salary increase they had been asking for for some time, with a new agreement between the unions and Abi (the Italian banks association) regarding a new collective bargaining agreement.

What about in 2024? “While the big jump in profits may be difficult to repeat as interest rate fluctuations ease, many banks are optimistic that rising fee income will allow them to continue growing profits,” writes Bloomberg. Not all analysts (even from the banks themselves) express the same optimism. There are fears that the combined impact of the arrival of new EU rules on the sector, economic risks arising from the international geopolitical context and possible interest rate cuts by the European Central Bank could lead to serious impacts on revenues and profits. . There are also those who have already taken action to ward off the coup: German Deutsche Bank announced a possible staff cut of 3,500 people in the next two years. Britain’s Barclays has budgeted heavy cuts in spending that will likely fall on workers. Reason? The bank recorded a profit of “only” 7.7 billion in 2023, against the expected 8.2 billion. There was a 6 percent decrease compared to the previous year.

Source: Today IT