MILAN: UniCredit pledged on Tuesday to return 5.25 billion euros ($5.69 billion) to investors based on its 2022 results, further hiking one of the most ambitious payout target among European banks, after posting its best profit in over a decade.

The bank said net profit came in at 2.46 billion euros in the three months through December, more than twice an average forecast of 1.10 billion euros ($1.2 bln) from analysts polled by the bank.

The figure includes an 852 million euro boost from the write-up of deferred tax assets.

The lender paid out 3.75 billion euros to investors over 2021 results in dividends and share buybacks.

UniCredit said it expected to post a net profit in 2023 broadly in line with 2022 including its Russian business, after it had excluded this from its profit goal last year following Russia’s invasion of Ukraine.

It also aims for a profit distribution target for 2023 in line with 2022. UniCredit has failed to extricate itself from Russia where it owns a top 15 lender.

The bank said its core capital rose to 16% in the fourth quarter, from 15.41% at the end of September.

When taking into account its most recent distribution plans, which are subject to shareholder approval and, for the buyback part, supervisory approval, pro-forma core capital was 14.9%, still well above its target of 12.5-13.0%.

UniCredit said income from its core lending activity jumped 38% from the previous quarter and 43% from a year earlier, as tighter monetary policy widened the gap between rates banks charge on loans and those they pay to raise funds.

That drove overall quarterly revenues to 5.72 billion euros, above a 5.12 billion euro average forecast.