This approval once again confirms UniCredit’s financial strength and its consistent compliance with the regulatory framework, according to the announcement. The completion of the process, the announcement notes, is subject to the approval of the competent national authorities for UniCredit’s acquisition of an indirect special participation in supervised subsidiaries of the Alpha Bank Group.
The announcement also states the following:
In full compliance with the approval requested from the ECB, UniCredit has entered into additional financial instruments, increasing its total stake in Alpha Bank to approximately 29.5%.
The increase in the stake was made at a discount to current market prices and was accompanied by the implementation of a hedging strategy, which secures, under favorable financial terms, part of the overall stake against potential depreciation in its value, resulting in minimal impact on the total return of the investment. The capital impact, in the event of a full conversion of the financial instruments to achieve a direct stake of approximately 29.5%, remains around 80 basis points of the CET1 ratio, as previously announced.
After obtaining the remaining regulatory approvals, 9.8% of UniCredit’s current stake will be equity consolidated, allowing for the recognition of a proportional share of Alpha Bank’s net profits in UniCredit’s revenue and net profit lines. The related capital burden from consolidating the 9.8% stake is negligible.
The decision on whether and when to convert and consolidate the remaining stake, held through financial derivatives, will be made at a later stage, based on an assessment of the balance between return and profitability, as well as the capital impact and dividend distribution capacity. A similar approach is followed for the additional 3% stake UniCredit holds in Commerzbank through financial derivatives.
Shareholders
UniCredit strongly believes in the positive prospects of the Greek economy and its banking system. The successful strategic partnership with Alpha Bank allows both groups to leverage their comparative advantages and further strengthen cooperation in payments, specialized financing services, advisory services, capital markets, asset management, and insurance products.
In this way, Greek clients gain access to high-quality, innovative products, while UniCredit benefits from the Group’s “product factories” and simultaneously incorporates a significant portion of Alpha Bank’s net profits into its own future financial results.
