MILAN, Dec 9 (Reuters) - Investors welcomed a pledge by new UniCredit (CRDI.MI) Chief Executive Andrea Orcel to return at least 16 billion euros ($18 billion) to them under his new strategy to 2024, sending the Italian bank"s shares to a 22-month high on Thursday. UniCredit plans to generate sufficient new capital to pay out as cash and share buybacks almost two thirds of its market value, which has shrunk after the pandemic thwarted previous CEO Jean Pierre Mustier"s bet on shareholder compensation."Whatever we do with this group we need to maintain our distribution at levels that .. are rewarding shareholders for all they have done," Orcel told a market presentation. Mustier in 2017 raised 13 billion euros from shareholders to fund UniCredit"s restructuring in one of Europe"s biggest cash calls.Shares in UniCredit, which lost its number one ranking last year to Intesa Sanpaolo (ISP.MI) after it snapped up smaller peer UBI, have been trading at a big discount to the sector. They shot up 11% on Thursday to 12.8 euros on the much larger-than-expected capital distribution goal. "Ambitious and encouraging," Credit Suisse analysts said. M&A POSSIBLE With its excess capital reserves intact, UniCredit will still be in a position to evaluate potential mergers and acquisitions, Orcel said, having walked away in October from a rescue deal for state-owned rival Monte dei Paschi (BMPS.MI). Only a large M&A transaction could cast doubt on the capital return goal, but the deals the bank has reviewed as it evaluates options would not fall into that category. "We cannot ... squeeze this group as a lemon and not do the things we need to do because we"re hostage to the 16 billion ... but I feel quite solid on it," he said. Ditching its current 50% payout ratio, UniCredit plans to return 3.7 billion euros in 2022, with a 30% cash dividend component that will later rise to 35%. That is higher than UniCredit"s profit goals of 3.3 billion euros for both 2021 and 2022 based on a new definition which strips out one-off items and some special bond coupons. "2022 is still a year of consolidation," Orcel said. Net profit is projected to top 4.5 billion euros in 2024, growing on average by 10% as UniCredit cuts costs by 500 million euros over the period, net of digital investments and wage increases, and adds 1.1 billion euros to revenues. With interest rates not expected to recover over the plan"s timeline, UniCredit will bet on fees earned on the sale of wealth management and insurance products to drive revenue up 2% a year. Confirming what sources had told Reuters last week, Orcel said UniCredit would reduce to just two or three its many insurance partners and revise agreements to retain a bigger share of placement fees, while also investing to drive sales. Cutting risk weighted assets by around 15 billion euros in the next three years, UniCredit will bet instead on capital light businesses, including advisory and capital markets, to lift its return on equity to 10% in 2024 from around 7% this year. ($1 = 0.8836 euros)