This is further evidenced by the profitability and shareholder value creation with a FY24 RoTE (Return On Tangible Equity) at 17.7%, or 20.9% on a 13% CET1 ratio, up by 1.1 percentage point versus prior year and EPS of €5.74 up almost 22% versus prior year.
In 4Q24, net revenues reached €5.6 billion, of which €2 billion of fees with a remarkable 8.9% year-on-year growth. Net interest income (“NII”) increased by 1.1% year-on-year to €3.7 billion, with a good discipline of deposit pass-through, at an average of 34%10 in 4Q24, only slightly up versus prior quarter.
In FY24 the Group confirmed its structurally low and stable Cost of Risk (“CoR”) at 15 basis points. In 4Q24 CoR stood at an annualized 34 basis points, with loan loss provisions (“LLPs”) amounting to €357 million. The high-quality, diversified credit portfolio remains resilient, supported by low non-performing exposures (“NPEs”) with sound coverage levels and robust lines of defence, including circa €1.7 billion of overlays on performing loans, broadly unchanged versus prior quarter.
In 4Q24 operational costs were €2.5 billion, up 9.5% quarter on quarter due to seasonality effect, or 1.3% year-on-year mainly due to new collective labour agreements. For FY24 total costs were down by 0.6% versus prior year to €9.4 billion despite inflationary pressure, demonstrating the effectiveness of our ongoing efforts to streamline operations and reduce the absolute cost base while strategically investing in future growth, resulting in an industry-leading cost/income ratio of 37.9%.
The Group introduced the FY25 financial guidance, ensuring that we continue to deliver strong returns to shareholders and setting the net profit guidance broadly in line with FY24. Net revenue is guided above €23 billion, with a moderate decline in FY25 NII, reflecting an expected lower interest rates environment and further compression of Russia.
UniCredit expect operating expenses to be circa €9.6 billion reflecting the expanded perimeter of the Group, or slightly down year-on-year on a like-for-like perimeter, leading to a circa 40% cost/income ratio. Group RWAs are expected at circa €300 billion, reflecting “Basel IV” and other regulatory changes and strategic initiatives.
The bank have set ambitions for 2027 of a net profit of circa €10 billion, coupled with RoTE above 17% and average FY25-27 organic capital generation broadly in line with net profit. All the above allows a FY25-27 yearly distributions ambition greater than in FY24, of which cash dividends at 50% of net profit and additional
distributions including the excess capital to a 12.5-13% CET1 ratio.
In line with the Net Zero Banking Alliance timeline, UniCredit has outlined its ambition for seven of the most carbon intensive sectors, including an industry leading phase out policy for coal, thus continuing to embed ESG in its financing activities and continuing to implement our Net Zero Transition plan, advancing on Net Zero targets achievement.
Andrea Orcel, Chief Executive Officer of UniCredit S.p.A. said: “Three years ago we announced UniCredit Unlocked with financial goals that many said were too ambitious. We have now overdelivered on all those goals, outperforming on all metrics including profitability and distribution targets, and are entering the next phase of our strategy. In this phase, we will accelerate our growth, aspiring to further widen the gap with our competitors, close our valuation gap, and cementing UniCredit as the bank of Europe's future and benchmark for banking.
We ended 2024 with a strong fourth quarter, crowning 16 quarters of quality profitable growth and our best full year stated net profit ever at €9.7 billion, net profit ex DTA is up 8% versus the prior full year. Underlying net profit was €10.3 billion excluding actions to secure future profitability. Full year RoTE was a robust 17.7%, or 20.9% on a 13% CET1 ratio, underpinned by increased net revenue, a best-in-class cost/income ratio and superior capital efficiency with an organic capital generation of €12.6 billion. We intend to increase our distributions to €9 billion to shareholders for 2024, pending approvals. As further proof of our generous distribution policy we are increasing the cash dividend to 50% of net profit from 2025.”