Key Takeaways:
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- UniCredit plans to increase its stake in Greece’s Alpha Services from 9.6% to around 20% through financial instruments acquired at a discount to market prices.
- The transaction is expected to generate an additional €180 million ($203.9 million) in annual net profit, which UniCredit intends to return to shareholders in line with its distribution policy.
- The deal will have a 40 basis point impact on UniCredit’s CET1 ratio, a key measure of financial resilience.
- Completion of the transaction is expected by the end of 2025, pending regulatory approval.
What Happened?
UniCredit, the Italian banking giant, announced plans to double its stake in Greek bank Alpha Services to approximately 20%. The move involves acquiring an additional 9.7% stake through financial instruments purchased at a discount to Alpha’s recent closing price of €2.79 per share.
Alpha Services shares rose 3.5% to €2.89 following the announcement. UniCredit’s increased stake is subject to regulatory approval and is expected to be finalized by the end of 2025.
The transaction is projected to generate €180 million in additional annual net profit for UniCredit, which the bank plans to distribute to shareholders. However, the deal will slightly impact UniCredit’s CET1 ratio, reducing it by 40 basis points.
Why It Matters?
UniCredit’s decision to increase its stake in Alpha Services reflects its confidence in the Greek banking sector and its strategy to strengthen its presence in key European markets. The deal is expected to enhance UniCredit’s profitability while maintaining its commitment to shareholder returns.
The 40 basis point impact on the CET1 ratio is manageable, indicating that UniCredit remains financially resilient despite the investment. For Alpha Services, the increased stake by a major European bank like UniCredit could boost investor confidence and support its growth trajectory.
This move also highlights the growing attractiveness of Greek financial institutions as the country’s economy continues to recover, offering opportunities for strategic investments.
What’s Next?
The transaction is expected to close by the end of 2025, pending regulatory approval. Investors will monitor UniCredit’s ability to integrate its increased stake in Alpha Services and realize the projected €180 million in additional annual profit.
UniCredit’s distribution policy will also be in focus, as the bank plans to return the additional profits to shareholders. Meanwhile, Alpha Services’ performance and its role in UniCredit’s broader European strategy will remain key areas of interest.
