UniCredit SpA (BIT:CRDI) posted first-quarter net profit of €3.22 billion on Tuesday, beating analyst consensus of €2.70 billion by 19.2% and surpassing the most bullish individual estimate of €2.85 billion, as fee income surged and costs fell, prompting Italy’s second-largest bank by assets to raise its full-year profit target to at least €11 billion.

Total revenues of €6.87 billion cleared the top of the analyst forecast range of €6.15 billion to €6.69 billion, with fees and net insurance income rising 7.8% year-on-year to €2.51 billion against a consensus median of €2.38 billion.

Net interest income fell 2.0% year-on-year to €3.59 billion, beating the consensus median of €3.53 billion, as lower rates weighed despite loan growth of 5.8% and deposit growth of 5.5% year-on-year.

Operating costs fell 1.1% year-on-year to €2.30 billion, broadly in line with the consensus median of €2.31 billion, pushing the cost-to-income ratio to 33.4%, down 2.0 percentage points year-on-year.

Loan loss provisions of €185 million matched the consensus median exactly, leaving the cost of risk at 17 basis points, within the bank’s guided range of 15 to 20 basis points for full-year 2026.

Chief Executive Andrea Orcel said the results reflected “disciplined execution across all levers – revenue growth, cost efficiency and capital strength,” adding that “a well-managed, diversified bank can deliver superior returns through the cycle while investing in its future.”

Return on tangible equity rose 2.7 percentage points year-on-year to 25.8%, with earnings per share up 19.7% to €2.15.

The CET1 capital ratio stood at 14.2%, 10 basis points below the consensus median of 14.3% and down 55 basis points quarter-on-quarter, driven by a negative 68-basis-point impact from equity investments including the consolidation of Alpha Bank, of which a negative 19 basis points represented a temporary impact linked to Commerzbank and Alpha Bank’s 2025 distributions yet to be executed in 2026.

On a pro-forma basis including the Danish Compromise, the CET1 ratio stood at 14.8%, the bank said.

Risk-weighted assets of €298.90 billion were broadly in line with the consensus median of €298.32 billion.

The net non-performing exposure ratio held at 1.4%, with NPE coverage improving 1.8 percentage points quarter-on-quarter to 45.8%.

UniCredit upgraded its full-year 2026 net profit target to at least €11 billion, against a full-year consensus median of €10.92 billion, and reaffirmed its 2028 and 2030 targets.