Italian bank UniCredit said on Tuesday its net profits tripled in 2022 on the back of rising interest rates and a cost-cutting drive, saying it plans to return most of that money to shareholders.

With net profits coming in at €6.5 billion, it easily beat the analyst consensus of €5.1 billion.

The bank announced it would pay out €5.2 billion to shareholders via dividends and share buybacks. The news sent the bank's share prices zooming more than eight per cent higher in morning trading.

The European Central Bank has been lifting interest rates since last year to tackle inflation and tame consumer price growth.

Despite the uncertainty hanging over the global economy the bank anticipates earning a similar net profit this year.

In the fourth quarter of last year net profits doubled year-on-year to €2.4 billion, also beating expectations.

UniCredit also handily beat its own objective for 2022 for adjusted net profit, last revised in October, of €4.8 billion excluding impacts from its Russia operations.

UniCredit was one of the European banks most exposed to Russia when Moscow invaded Ukraine last year, with a large local subsidiary operating in the country. It began preliminary discussions on a sale last year, but the talks haven't advanced.

Chief executive Andrea Orcel said UniCredit wants to leave Russia, but said that gifting an operation worth €3 billion was not a good way to respect the spirit of Western sanctions on Moscow over the war.

Chief executive Andrea Orcel said UniCredit wants to leave Russia, but said that gifting an operation worth €3bn was not a good way to respect the spirit of Western sanctions on Moscow over the war

Nevertheless, UniCredit has gradually reduced its exposure to Russia and managed to increase the ratio of its capital to risk-weighted assets to 16.00 per cent from 15.03 per cent last year.