Finance

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Italy’s second-largest lender UniCredit on Tuesday posted a fourth-quarter profit beat, raising shareholder returns amid market focus on the bank’s M&A overtures.
The bank upped its cash dividend pay-out guidance to 50% of net profit in 2025, from 40% in 2024.
CEO Andrea Orcel said UniCredit was progressing onto the next phase of its strategy and will “accelerate our growth, aspiring to further widen the gap with our competitors.”

Italy’s second-largest lender UniCredit on Tuesday posted a fourth-quarter profit beat, but guided a slight slowdown in 2025 revenues amid expected declines in net interest income.
Net profit attributable to the group came in at 1.969 billion euros ($2.03 billion) in the fourth quarter, compared with an analyst forecast of 1.803 billion euros, according to a LSEG-compiled consensus.

Revenues reached 6 billion euros over the period, versus analyst expectations of 5.898 billion euros.
Other fourth-quarter highlights included:

Return on tangible equity of 11.5%, compared with 19.7% in the third quarter.
CET 1 capital ratio, a measure of bank solvency, was 15.9% from 16.1% in the previous three-month stretch.
Operating costs of 2.5 billion euros, up 9.5% quarter-on-quarter.

The lender, whose full-year net profit added an annual 8.1% to 9.31 billion euros, pledged bolstered shareholder returns in 2025, upping its cash dividend pay-out guidance to 50% of net profit, from 40% in 2024. UniCredit also said it targets a RoTE performance above 17% over 2025-27, compared with the 17.7% of 2024.
In a statement accompanying the results, CEO Andrea Orcel said UniCredit was progressing onto the next phase of its strategy and will accelerate its “growth, aspiring to further widen the gap with our competitors, close our valuation gap, and cementing UniCredit as the bank of Europe’s future and benchmark for banking.”
Despite this, the bank guided for full-year revenues of above 23 billion euros in 2025, below the 24.8 billion euros achieved last year, reflecting the “further compression” of UniCredit’s business in Russia and “moderate decline” in expected net interest income, or the difference between lender earnings on loans and costs on deposits. The European Central Bank has been calling on UniCredit to pare down its Russian operations following the war in Ukraine.

Amid these downside pressures, UniCredit says it expects full-year 2025 fees to be up a “mid-single digit percentage point” compared with the previous year, in a projection that includes the net insurance result. Shares were last trading down 3%. European banks have been faced with the challenge of acclimating to an environment of declining interest rates, as the European Central Bank continues its cycle of monetary easing.
“We’ve laid the foundation to be able to address the normalization of rates, the normalization of cost, of risk and inflation on cost. So the golden money for banks is considered to be declining into a normalization of the situation. And our ambition is to absorb all that normalization and growth,” Orcel told CNBC’s Silvia Amaro on Tuesday. “And we are quite confident. I think we have lines of defense. We are strong.”

M&A scope

UniCredit has been at the epicenter of Italy’s nascent push for consolidation since the second half of last year, following its surprise build — and later increase — of a stake in Germany’s Commerzbank, and its takeover offer for domestic peer Banco BPM at the end of 2024. The Italian lender has so far rejected UniCredit’s opening play, but Orcel told Bloomberg his opening bid for Banco BPM was only a “fair starting point.”
Speaking to CNBC’s Amaro on Tuesday, the UniCredit boss added that it was imperative to first see how Banco BPM responds to rate normalization, cost of risks and inflation on cost developments, at least up to the first quarter, before reassessing the offer.
“In order for us to review, there needs to be a significant shift that makes whatever increase match our metrics of profitability for our shareholders, or we will not do it,” he said, while noting that Banco BPM matches the Small and Medium-size Enterprise (SME) and affluent client segment that UniCredit currently wishes to target.
He separately stressed that Commerzbank remains an investment for UniCredit, but adds that the Italian bank will review its options once the German government completes its elections at the end of this month.
“I’m quite optimistic of being able to convince everybody, not only on the premises of how we got to this investment, but also that a combination between the two bank has massive value to be created, not only for the two banks and the stakeholders, but also for Germany and for Europe,” Orcel said.
The German administration has decried UniCredit’s “very aggressive, very opaque, untransparent” bid for Commerzbank, with Rome likewise resistant on the domestic front, amid broader government plans to form a third Italian banking titan alongside Intesa Saopaolo and UniCredit. Complicating the landscape of Italian dealmaking, UniCredit on Feb. 2 unveiled a 4.1% stake build in Italy’s top insurer Generali Group, but has stressed that “no strategic interest” motivates the venture.

Critically, Italy operates under so-called golden powers legislation which permits Rome to intercede or set conditions on foreign and domestic corporate takeovers in key sectors such as defense, energy, communications and banking.
Market participants are watching which of its twin-pronged suits UniCredit will commit to, or whether it will ambitiously keep both targets in sight.
“Any inorganic growth must improve our standalone case and meet our strict financial and strategic requirements,” Orcel said in the Tuesday statement. More

Chinese electric car giant BYD announced late Monday that it was releasing a “DiPilot” assisted driving system for its cars, which includes a 69,800 yuan ($9,555) low-cost vehicle.
BYD also said it was integrating artificial intelligence from Chinese startup DeepSeek into at least the most advanced version of the new driver assist system.
Tesla’s most advanced version of driver assistance, called “Full-Self Driving,” has yet to receive Beijing’s approval.

Chinese electric car giant BYD announced on Feb. 10, 2025, that it would integrate DeepSeek into its artificial intelligence model that powers its new driver-assistance technology.
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BEIJING — Chinese electric car giant BYD shares hit a record high in Hong Kong trading Tuesday after the company said it is going all in on driver assistance with the help of DeepSeek, after previously taking a more cautious approach on autonomous driving technology.
Shares rose more than 4% Tuesday morning to an all-time high of 345 Hong Kong dollars ($44.24), before paring gains. The stock had soared nearly 21% last week in anticipation of BYD’s event on Feb. 10.

Advanced smart driving will become a standard safety feature similar to seatbelts and air bags, BYD’s founder and chairman Wang Chuanfu said at a China-focused launch event livestreamed late Monday.
The automaker announced that it was releasing a “DiPilot” assisted driving system across its range of cars, which includes a 69,800 yuan ($9,555) low-cost vehicle.
That makes BYD likely the first automaker in China to offer such advanced driver-assistance capabilities for a vehicle below 70,000 yuan, Nomura analysts said in a Tuesday note. “BYD is changing its competition strategy from price cutting last year to functions’ upgrade in 2025,” the analysts said.
BYD also said it was integrating artificial intelligence from Chinese startup DeepSeek into at least the most advanced version of the new driver-assistance system. Such systems use a combination of software, AI and cameras or other sensors to control a vehicle, minimizing the need for human intervention.

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“The DeepSeek integration is very significant,” said Tu Le, founder and managing director of Sino Auto Insights, “because now there’s a homegrown standalone AI technology that BYD can work with to offer equivalent intelligent features offered by their competitors.”

“This puts BYD firmly back in the driver’s seat dictating the pace” of technological features, he said, noting the company previously lagged its Chinese competitors.
More than two years ago, Chinese automakers had started offering driver-assistance features as a way to stand out in China’s fiercely competitive electric car market. But BYD management told investors in March 2023 that when it comes to “smart driving,” it was difficult to determine liability in the event of an accident involving autonomous vehicles. But they did note advanced assisted driving tech had the potential to improve overall safety.

On Monday, BYD said so-called smart vehicles can improve road safety by monitoring road conditions and avoiding dangers, while big data and AI models will improve the tech over time.
More than 20 models with BYD’s new driver-assistance tech were launched Monday. The automaker, which has been rapidly expanding overseas, did not say anything about global availability.

Tesla still waiting for approval

Driver-assistance rollout in China has faced regulatory restrictions, although an increasing number of local authorities have allowed more cars to use assisted driving software on congested city streets.
Chinese startup Xpeng was an early mover, first rolling out driver-assist for urban roads in its home city of Guangzhou in September 2022, before expanding to Shenzhen and Shanghai by early 2023. By February 2024, Xpeng said the feature was usable across most of China. The company’s mass-market brand Mona launched its first car in August with some driver-assistance capabilities.
Competing cars from Li Auto, Huawei partners, Nio and Xiaomi all claim to offer some driver-assistance functions, such as automatic parking. Several of the automakers use Nvidia’s chips for cars.
Tesla’s most advanced version of driver assistance, called “Full-Self Driving,” has yet to receive Beijing’s approval despite Elon Musk’s repeated statements that it could be available in China, as soon as the end of 2024. In an earnings call in January, Musk attributed the delay to U.S. and Chinese restrictions that prevent Tesla from quickly developing a locally compliant version of the driver-assistance software.
Though DeepSeek integration enhances BYD’s competitive edge, Brian Tycangco, an analyst at Stansberry Research, cautioned that the collaboration “increases the likelihood that BYD vehicles will face more difficulties entering Western markets like the U.S. due to national security reasons.”
— CNBC’s Bernice Ooi contributed to this report. More

Last year dozens of countries proposed or introduced new tariffs on steel imports. Most aimed the measures at China, which they accused of flooding international markets with cheap metal. On February 9th Donald Trump took a different approach: he picked up a scattergun instead of a sniper’s rifle. As the president flew to the Super Bowl in New Orleans, he told reporters on Air Force One that he would announce new tariffs of 25% on all aluminum and steel imports into America. On February 10th the levies duly arrived. More

Traders work underneath GameStop Corp. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Friday, June 7, 2024. 
Michael Nagle | Bloomberg | Getty Images

Shares of GameStop and MicroStrategy were on the rise Monday after Ryan Cohen, CEO of the video game retailer, posted a photo with Michael Saylor, co-founder and chairman of the largest corporate holder of bitcoin.
GameStop, day traders’ favorite meme stock, climbed more than 7%, while MicroStrategy, which recently rebranded as “Strategy,” saw shares rising as much as 4%. Cohen uploaded the photo over the weekend on X, sparking speculation that GameStop is plotting another strategy around crypto. MicroStrategy shares last traded up 1%.

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The video game company had expanded into digital services in recent years by offering crypto wallets that let users manage their crypto and nonfungible tokens. However, the firm shut the service down in 2023, citing “regulatory uncertainty.”
Cohen, co-founder of Chewy, bought shares in GameStop in 2020 and joined the board in 2021 as GameStop became one of the key stocks in the WallStreetBets meme trading mania.
His e-commerce experience fueled hopes that he could help modernize the brick-and-mortar retailer, but the company still struggles to adapt to changing spending habits by gamers. Trading in the stock remains highly volatile and speculative as meme stock personality “Roaring Kitty” continues to spur buying from retail investors.

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Saylor’s Strategy also has a fan base of retail investors as the firm touted its aggressive bitcoin-buying strategy. In the past year, the firm has raised billions of dollars through the sale of stock or convertible bonds for the sole purpose of purchasing more bitcoin.
Last week, Strategy said it’s almost halfway to its ambitious capital-raising goal as it went on a buying spree throughout the postelection rally. As of Monday, Strategy holds roughly $47 billion worth of bitcoins on its balance sheet, about 2.5% of the total supply.

Don’t miss these cryptocurrency insights from CNBC Pro: More

U.S. President Donald Trump meets with Japan’s Prime Minister Shigeru Ishiba (not pictured) at the White House in Washington, U.S., Feb. 7, 2025. 
Kent Nishimura | Reuters

President Donald Trump ordered a halt to the production of new pennies, which he said will help reduce “wasteful” government spending.
“For far too long the United States has minted pennies which literally cost us more than 2 cents,” Trump said in a Truth Social post. “This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” Trump wrote.

It’s not clear whether the president has the authority to stop the manufacture of the 1-cent coin. According to the U.S. Constitution, coinage power, as recognized by the Supreme Court, is “exclusive” to Congress. Federal law says the Treasury secretary can mint and issue coins as necessary for the needs of the United States.
But at least one analyst on Wall Street expects that the penny’s days are numbered. TD Cowen’s Jaret Seiberg said the halt will likely pass judicial review, leading to a shortage of the coin.
“We believe this order would survive judicial review, which is why this is likely to occur,” Seiberg wrote Monday. “We worry about this leading to a shortage of pennies, which could force merchants to pay banks more for coins. It also adds legal risk for merchants and banks. That could create the crisis needed to force Congress to act.”
Seiberg said he expects this could support the move toward electronic payments, bolstering companies such as Visa, Mastercard and other real-time payment networks.
What is clear is that pennies cost more to make than they are worth. In 2024, the U.S. Mint spent 3.69 cents to manufacture each penny, according to an annual report. That meant the cost of each penny has run above its face value for a 19th straight fiscal year.
The latest U.S. Mint report suggests the nickel better watch its back, too. Each 5-cent piece costs the Mint 13.78 cents to make.

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Consumer Financial Protection Bureau employees were told Sunday to work remotely because their Washington, D.C., headquarters would be closed through Feb. 14, according to a memo obtained by CNBC.
The memo, from CFPB Chief Operating Officer Adam Martinez, follows an email sent Saturday from newly installed acting CFPB director Russell Vought which instructed staff to suspend nearly all activities of the regulator, including supervising financial firms.
Elon Musk, who last year called for the deletion of the CFPB, on Friday posted “CFPB RIP” on his X social media platform.

Office of Management and Budget (OMB) Acting Director Russell Vought speaks with reporters during a press briefing at the White House in Washington, U.S., March 11, 2019.
Jonathan Ernst | Reuters

Consumer Financial Protection Bureau employees were told Sunday to work remotely because their Washington, D.C., headquarters would be closed through Feb. 14, according to a memo obtained by CNBC.
The memo, from CFPB Chief Operating Officer Adam Martinez, follows an email sent Saturday from newly-installed acting CFPB director Russell Vought which instructed staff to suspend nearly all activities of the regulator, including supervising financial firms.

The developments come amid concern about the fate of the CFPB and its staff after operatives from Elon Musk’s DOGE arrived at the regulator late last week. The DOGE employees have been given access to CFPB data sources, including staff performance reviews, said people with knowledge of the situation who have asked for anonymity out of fear of reprisal.
Musk, who last year called for the deletion of the CFPB, on Friday posted “CFPB RIP” on his X social media platform.
Besides putting a freeze on nearly all CFPB activity with his inaugural memo, Vought on Saturday posted on X that he was halting the flow of fresh funding to the agency. “This spigot, long contributing to CFPB’s unaccountability, is now being turned off,” Vought wrote.
Vought, who was confirmed as President Donald Trump’s head of the Office of Management and Budget on Thursday, is one of the authors of Project 2025, the master plan to reshape the federal government.
The CFPB and a representative for Musk didn’t immediately return requests for comment.

Layoff fears

CFPB employees are bracing for the possibility of being put on administrative leave or laid off, similar to what Trump officials have attempted with the U.S. Agency for International Development, according to people at the bureau.
While there are roughly 1,700 CFPB employees, only a few hundred workers have positions which are mandated by law to exist, according to a person with knowledge of the agency.
Mass layoffs would jeopardize the mission of the CFPB, created in the aftermath of the 2008 financial crisis to prevent banks and other financial firms from exploiting Americans. Bank trade groups have long accused the CFPB of being unfair and have fought the agency’s rules in court, even unsuccessfully attempting to declare the agency unconstitutional.
At risk are several CFPB efforts that would’ve saved consumers tens of billions of dollars, including restrictions on credit card and overdraft fees, and a rule that would’ve removed $49 billion in medical bills from the credit reports of 15 million Americans. More

The Trump administration may create powerful tailwinds for two vastly different market groups: Big banks and small cap stocks.
In the case of financials, Astoria Portfolio Advisors’ John Davi predicts deregulation — along with a boost in IPO and mergers and acquisitions — to spark multi-year strength.

“The funny thing about the banks is that they were actually from an earnings standpoint fundamentally getting very attractive prior to the Trump administration,” the firm’s founder and CEO told CNBC’s “ETF Edge” this week. “The large-cap money centers like Goldman [Sachs], JPMorgan, Bank of America, Morgan Stanley… That’s really the area you want to hone in on with this new administration.”
The money center banks are coming off a strong week. Shares of Goldman Sachs, JPMorgan Chase and Morgan Stanley hit record highs on Friday.
Those historic gains are a major reason why Davi likes the Invesco KBW Bank ETF. Its top holdings include JPMorgan, Goldman Sachs and Morgan Stanley, according to FactSet.
The ETF is up almost 10% since Jan. 1 and more than 49% over the past 52 weeks.

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Year-to-date chart of the KBWB ETF

While bank stocks rally, VettaFi’s Todd Rosenbluth expects small cap stocks to shine under Trump 2.0. He implies the group would be largely insulated from reshoring and tariff threats.

“If we have a focus on the U.S. and making America even stronger, then small-cap companies stand to benefit from that because they have less multinational exposure,” the firm’s head of research said.
Rosenbluth suggests the T. Rowe Price Small-Mid Cap ETF and Neuberger Berman Small-Mid Cap ETF as ways investors can play the group.
He also likes the VictoryShares Small Cap Free Cash Flow ETF, which has solid exposure to biotech. Its top three holdings, according to the fund’s website, are Royalty Pharma, Oscar Health and Jazz Pharmaceuticals, and its mission statement is to target “quality small cap companies, trading at a discount with favorable growth prospects.”

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VictoryShares Small Cap Free Cash Flow ETF,

According to Rosenbluth, the ETF “takes a focus on companies with high quality, strong free cash flow generation, but it has a growth filter to it.” He added the filter sets a high bar when it comes to which small caps ultimately make the cut. 
The VictoryShares Small Cap Free Cash ETF is up almost 10% over the past year while the Russell 2000, which tracks the group, is up about 17%.
By CNBC “ETF Edge” Staff
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