UniCredit is set to release its Q2 results on July 22, 2025. Morningstar predicts a mid-single-digit percentage decline in earnings compared to last year, due to lower net interest income and higher loan loss provisions. Italian banks like UniCredit are particularly vulnerable to falling interest rates due to their high share of floating-rate loans.
Revenue is expected to decrease year-over-year, with flat loan growth and modest fee income growth. Operating costs may rise slightly, leading to negative operating leverage. Loan loss provisions are projected to increase from the low levels seen in 2024, but remain below mid-cycle norms. UniCredit’s exposure to export-oriented economies raises concerns about the impact of higher tariffs.
UniCredit faces challenges in revenue growth in a low interest rate environment. The bank must normalize loan loss provisions and manage excess capital. Investors may pressure UniCredit to expedite capital returns as the bank navigates uncertain economic conditions.
Read more at Morningstar: What to Expect from Q2 Earnings