The Italian financial services group Unipol has officially unveiled the “Stronger/Faster/Better” strategic plan 2025-2027, a strategy that specifically outlines as a key priority the generation of 1 billion euros of net capital that will be used to accompany the group’s growth in terms of investment and financial strength. Plan envisages a net loss of 3.8 billion euros, of which 2.3 billion euros was realised under the last three-year plan. It also intends to pay out up to 2.2 billion euros in dividends during the period, up from 960 million euros in the previous plan. The shares were down slightly after the announcement, with analysts saying that its profit and dividend targets were broadly in line with market estimates.
Capital Generation and Strategic Utilization
The surplus capital, which will now be generated in addition to dividends, could instead be spent on growth opportunities or doled out to shareholders, the analysts said. That’s the kind of approach that is in line with organic capital generation, the concept that you can generate excess capital from an enterprise that’s tightly coupled, which is the idea of maximizing the amount of profit that you extract out for each dollar per unit of capital employed against a unit of risk. Some other financial institutions do an even better job of doing this, which is why certain activities are focused on growing profit and hence capital at the minimum- and maximum-efficient use of capital.
Establishing and Fortifying Distribution Networks and Banking Partnerships
Unipol’s goal in its strategic plan is to ensure that group’s profitability and its distribution network, which is based on partnerships with BPER Banca and Banca Popolare di Sondrio, in which it has significant shareholdings, are maximised. They are expanding their banking distribution channel, adding lower-capital products. It aims to make its distribution operations more efficient and profitable. Unipol has expressed backing for the proposed takeover of Popolare di Sondrio by BPER Banca, arguing a merger would be favourable for its operations with both lending businesses.
Business Breakdowns and Insurance Revenue Goals
Strategic Plan: it aims to identify turning points on Unipol’s insurance activities. In the final year of the plan, it aims for 18 billion euros in total insurance revenues. Out of this, €10.6 billion comes from its non-life unit and €7.4 billion from its life business. The targets are reflective of the group `concentrate on sustaining and growing its presence across both segments of the insurance market.
Market Reaction & Analyst Commentary
The market is watching Unipol’s strategic plan too, after the share price of the issuer fell after the announcement. The plan’s targets are broadly in line with market expectations, analysts have said. One positive for the plan, according to analysts, is the potential that generated capital can be used for either growth, or more capital returns. The group intends to expand its distribution networks and bank partners, enhancing both its distributed market presence and its efficiency of operations.
