UniCredit: Why Italy's New Bank Tax Could Fuel An Extra Yield

2025-10-26 04:19:38 ET

UniCredit Taking the Lead

One of the hottest stocks in Europe has been UniCredit ( OTCPK:UNCRY , UNCFF ), both because in the past 4 years it has almost been a 10-bagger and because it wants to acquire the German Commerzbank. Right now, UniCredit is close to a market cap of EUR 100B and is exchanging almost daily the number one spot on the Milan Stock Exchange with its peer Intesa ( OTCPK:ISNPY , OTCPK:IITSF ). Within the European Union, it is now a close match in the race to be the largest bank by market cap, with UniCredit and Intesa challenging the Spanish Santander and BBVA and the French BNP Paribas. In short, the banking crisis that caused many banks in Southern Europe to plummet is now well behind us. These banks are doing well; they are extremely well capitalized (some even say too much) and have close to 0 NPLs. What could be lacking is more European integration, as we have seen how cross-country M&A activities are facing some issues. This partly explains why many banks have done great in the past few years. They were trading at depressed valuations, and their multiples are catching up. But, at the same time, we have to admit that once interest rates started moving above 0, most banks began making real money....

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