Profit much higher than forecast, raises distribution
Pledges to broadly match result in 2024 despite easing rates
Increases cash payout, introduces interim dividend

MILAN, Feb 5 Reuters UniCredit stunned markets on Monday with a bumper 2023 profit which it said it would distribute entirely to shareholders, and pledged to broadly replicate it this year despite a toughening backdrop.

Shares in Italy39;s secondbiggest bank jumped 10 to a nineyear high after the results and as it also upgraded its outlook for a year in which interest rates are expected to start declining.

We face the future with optimism, CEO Andrea Orcel told analysts.

UniCredit, he added, has taken steps to counter the fading boost from the gap between lending and deposits rates, which in recent quarters has propelled bank earnings to record highs.

In 2023, UniCredit earned 14 billion euros 15 billionfrom that gap alone, almost twice as much as it made from weakening net fees and up nearly a third from 2022.

Orcel39;s upbeat stance contrasts with the more cautious note struck by some other top European banks which have flagged challenges ahead.

UniCredit shares are now at their highest since May 2015, having surged nearly 250 since Orcel, former head of investment banking at UBS, took the reins in April 2021.

Stock is one of most loved in the sector, but the story continues to overdeliver, Citi analyst Azzurra Guelfi said.

Stated net income in the OctoberDecember period was 2.8 billion…