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UniCredit CEO says 2022 shareholder payout could top 2021

Andrea Orcel poses with an award at the 2016 IFR Awards event in London

MILAN (Reuters) - Italy's UniCredit may have room to pay out more to shareholders from 2022 earnings than the year before, potentially adding to rewards that were already among the most generous among European banks, its CEO said on Thursday.

Speaking in Davos to Bloomberg Television, Andrea Orcel said credit losses were still shrinking despite the expected economic shock ahead from higher interest rates and the cost of living crisis.

"We see the uncertainty, we all anticipate a potential shock but the indicators are all very good. The stock of non performing loans is going down and the cost of risk is still compressing," he said.

Shares in UniCredit were little changed mid-session with analysts and traders saying the rally in banking stocks and UniCredit in particular already anticipated a strong end to 2022.

UniCredit will be the first Italian bank to report full-year results on Jan. 31.

GRAPHIC: UniCredit chart -

Asked whether shareholder payouts for 2022 could beat 2021 levels, Orcel said: "Our capital distribution ambition for 2022 was to be in line or higher than 2021, based on the numbers we had at the nine-month mark we can be higher."

UniCredit paid out 3.75 billion euros in dividends and share buybacks last year, or 100% of its 2021 underlying net profit, in line with Orcel's strategy of focusing on businesses that generate capital to be returned to shareholders.

Orcel has pledged to meet the majority of a three-year payout goal of more than 16 billion euros even in a "severe recession."

UniCredit has been forecasting a mild recession and Orcel said on Wednesday the latest indications pointed to Europe possibly being able to escape a recession altogether.

The upbeat tone of bank CEOs, who are reaping the benefits of higher rates on lending margins while funding costs and loan losses are still low, is in contrast with industry supervisors' call for caution given the uncertainty ahead.

(Reporting by Valentina Za Editing Federico Maccioni and Mark Potter)