Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (November 2016)
37 slides from Unicredit's debt investor presentation, Nov 14, 2016
Slide 1: UniCredit Group: 3Q16 results - Presentation to Fixed Income Investors
UniCredit Group: 3Q16 results Presentation to Fixed Income Investors Milan, November 14th 2016
Slide 2: Disclaimer
Disclaimer This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, p
Slide 3: Opening remarks
Opening remarks Positive dynamics of operating performance in 9M16 CET1 ratio at 10.82%, supported by Fineco & Pekao July's ABBs related to the new strategy and a one-off RWA reduction Gradual improvement of asset quality Non Core de-risking supported by NPL disposals In-depth strategic review to be
Slide 4: UniCredit at a glance
UniCredit at a glance A clear international profile based on a strong European identity UniCredit Highlights Shareholders’ Structure • Strong local roots in 17 countries Institutional Investors 15% • Over 122,000(1) employees Retail, Miscellaneous & 42% • About 6,500 branches (1) Unidentified Invest
Slide 5: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 5
Slide 6: Group – Net profit at 447m in 3Q16, ROTE at 4.2%
Group – Net profit at 447m in 3Q16, ROTE at 4.2%. Net profit at 1.8bn in 9M16 1 2 3 4 5 Group – Results Net profit, m Net profit 3Q16 by division, m Adjustments to 2Q16 CB Italy 256 results(1) 1,768 CB Germany 67 1,541 CB Austria 72 Poland 48 916 229 CEE 420 507 447 CIB 366 687 AG (Fineco) 25 3Q15 2
Slide 7: Group – Resilient commercial loans and growing deposits
Group – Resilient commercial loans and growing deposits confirm the strength of UniCredit's franchise 1 2 3 4 5 Group – Balance sheet Commercial loans, bn Commercial deposits, bn Total RWA / total assets, % +7.0% +0.6% -1.1pp -0.2% +2.0% -0.1pp 433.9 440.0 438.9 396.6 404.4 45.8 44.8 44.7 377.9 37.8
Slide 8: Group – Regulatory fully loaded CET1 ratio at 10.82%
Group – Regulatory fully loaded CET 1 ratio at 10.82%, supported by Fineco & Pekao ABBs in July and a one-off RWA reduction 1 2 3 4 5 Group – Regulatory capital Fully loaded Common Equity Tier 1 ratio +23bp +6bp -4bp +4bp 10.82% +20bp 10.33% 10.07% Sep-15(1) Jun-16 July ABBs 10% RWA AFS DBO Other Se
Slide 9: Group – RWA reduction due to lower credit and positive one-off in market risk
Group – RWA reduction due to lower credit and positive one-off in market risk 1 2 3 4 5 Group – Regulatory capital Main drivers of impact 340.2 337.6 333.1 q/q, bn Credit Market Operational Credit RWA -4.5bn -8.4bn Sep-15 Jun-16 Sep-16 399.3 -1.8 -1.4 -0.4 -4.8 -0.6 22.1 -4.2 17.0 18.2 q/q, bn -0.5
Slide 10: Group - Continued reduction of gross impaired loans
Group - Continued reduction of gross impaired loans 1 2 3 4 5 Group – Asset quality Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn 1.3bn NPL -4.9% +1.4% disposals in 80.7 0.0% 9M16 in Italy, 77.1 76.8 ow.0.7bn in 3Q16 50.6 51.3 51.3 Net imp. 39.6 36.7 36.4 Net Sep-15 Jun-16 Sep-16 b
Slide 11: Leverage Ratio
Leverage Ratio A sound level is confirmed, comparing well with peers 1 2 3 4 5 Group – Leverage ratio 3Q16 - Fully Loaded BIS3 Leverage Ratio(1), % 3Q16 2Q16 6.6 6.4 6.1 5.6 5.4 5.0 4.7 4.4 4.5 4.5 4.1 4.2 4.2 4.0 3.4 3.5 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 UCG Peer 8 Peer 9 Peer 10 Pee
Slide 12: Group – Medium-long term funding plan
Group – Medium-long term funding plan 2016 Funding Plan realized for 15.8bn or c. 57% as of Nov. 1st 1 2 3 4 5 Group – Funding plan Funding mix, managerial data % of M/L term run offs by region(3) MLT structural MLT structural 32.8bn funding, 8.2bn 27.7bn funding, 8.4bn Geographical distribution 30.
Slide 13: Group Direct Funding and Retail Bonds Dynamics
Group Direct Funding and Retail Bonds Dynamics 1 2 3 4 5 Group – Direct funding 3Q16 Direct Funding(1) 3Q16 Retail Bonds €/bn €/bn 1.5 591.6 29.8 119.8 Incl. 29.8bn of retail 25.0 bonds (senior + 470.3 subordinated) 4.8 Deposits Securities Other liabilities(2) Direct Funding Retail sub. Retail senio
Slide 14: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access 1 2 3 4 5 Group – wholesale market Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 23/02/2016 MS + 1 bps 08/12/2015 6Y 01/03/2016 26/05/2016 24/08/2016 17/10/2016 MS - 5 bps Pfand T + 731 bps MS + 432 bps MS + 20 bp
Slide 15: Very strong liquidity position confirmed
Very strong liquidity position confirmed 1-year Group liquidity buffer exceeds 12m wholesale funding 1 2 3 4 5 Liquidity buffer as of Sept-16 (€bn)(1) 192 Additional eligible assets 42 available within 12 months(1) Cash and Deposits 35 with Central Banks 151 Unencumbered assets 116 (immediately avai
Slide 16: TLAC Calibration and UniCredit Plan
TLAC Calibration and UniCredit Plan 1 2 3 4 5 Group – TLAC TLAC Requirements Earliest by 2019 TLAC planned issuance under MYP (2016-2018) 22.3% TLAC ratio 22.53% G-SIFI 1% 2019 old Senior outstanding 7.7bn 1.81% Capital conservation 2.5% 2.75% Senior bond 20 bn Pillar 2(1) 4.70% Funding plan (2016-2
Slide 17: Ratings Overview
Ratings Overview 1 2 3 4 5 Group – Rating Issuer Ratings(1) Recent actions and key individual rating drivers Italy BBB-/Stable/A3 • On the 20th of July 2016, S&P affirmed UC SpA's rating with Stable Outlook following the announcement of a strategic review led by the new CEO and actions launched to e
Slide 18: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 18
Slide 19: Core Bank – Net profit at 0.9bn in 3Q16, RoAC at 10.4%
Core Bank – Net profit at 0.9bn in 3Q16, RoAC at 10.4%. Positive progression of operating performance y/y 1 2 3 4 5 Core Bank – P&L Ch. % Ch. % Ch. % P&L, m 3Q15 2Q16 3Q16 Q/Q Y/Y 9M15 9M16 Y/Y Revenues 5,330 6,205 5,529 -10.9% +3.7% 16,756 17,224 +2.8% Net interest 2,930 2,963 2,900 -2.1% -1.0% 8,8
Slide 20: Core Bank – Positive progression of revenues y/y
Core Bank – Positive progression of revenues y/y with trading income offsetting slowdown of core revenues (net interest and fees) 1 2 3 4 5 Core Bank – P&L Net interest(1), m Net fees and commissions, m -1.1% -1.7% -1.0% -0.7% 8,864 8,766 5,862 -2.1% 5,763 -3.7% 2,930 2,963 2,900 1,886 1,943 1,873 3
Slide 21: Core Bank - Net interest down q/q
Core Bank - Net interest down q/q with lower cost of funding and higher loan volumes mitigating the impact of lower rates on assets 1 2 3 4 5 Core Bank – Net interest Net interest bridge q/q, m -2.1% 2,963 2,900 +7 +28 -5 -104 +39 +46 -73 Average Euribor 3M Commercial dynamics: +4m -0.30% (-4bp q/q)
Slide 22: Core Bank – Fees affected by challenging market conditions
Core Bank – Fees affected by challenging market conditions and subdued activity in 3Q16 1 2 3 4 5 Core Bank – Fees & Commission Net fees and commissions, m Investment services fees, m Recurring fees (c.70% of tot. in 3Q16)(1) -0.7% -8.4% 2,634 2,617 829 895 820 -1.7% 5,862 3Q15 2Q16 3Q16 9M15 9M16 5
Slide 23: Core Bank – Positive costs dynamics q/q
Core Bank – Positive costs dynamics q/q supported by decreasing FTE and branches 1 2 3 4 5 Core Bank – Total costs Costs, m Staff expenses, m -4.0% -3.4% -2.9% 6,183 5,976 2,034 2,011 1,953 -2.8% 9,881 9,600 3Q15 2Q16 3Q16 9M15 9M16 -3.2% -2.7% Other administrative expenses(1), m 3,265 3,247 3,159 -
Slide 24: Core Bank – LLP at 462m in 3Q16, cost of risk at 41bp
Core Bank – LLP at 462m in 3Q16, cost of risk at 41bp. Impaired loans coverage ratio at 50.7% 1 2 3 4 5 Core Bank – Loan loss provisions Loan loss provisions, m Divisional breakdown – 3Q16 CoR, bp q/q y/y -19.1% CB Italy 69 +0bp -5bp 1,716 -15.3% 1,388 CB Germany 10 +14bp +21bp -10.0% 545 513 462 CB
Slide 25: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 25
Slide 26: Non Core – Gross loans continued reduction by 1.4bn q/q
Non Core – Gross loans continued reduction by 1.4bn q/q. LLP at 546m, broadly flat q/q considering 100m LLP single name release in 2Q16 1 2 3 4 5 Non Core – Main trends Gross customer loans, bn Main drivers of run-down -8.9bn • 0.7bn disposals in 3Q16, additional 0.9bn -1.4bn Disposals closed in Oct
Slide 27: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 27
Slide 28: Group - Non operating items affecting quarterly performance
Group - Non operating items affecting quarterly performance due to systemic charges and income tax 1 2 3 4 5 Annex – Group Non operating items Non-operating items bridge, m 1,219 -216 -77 -48 -7 -328 ow c.122m DGS ow c.30m DTA fee in Italy ow c.64m levies in Austria, CEE&Poland +9 -103 -4 447 Tax ra
Slide 29: Core Bank – Resilient net interest Y/Y
Core Bank – Resilient net interest Y/Y with higher loan volumes and lower cost of funding mitigating the negative impact of lower loans customer rates and higher deposits volumes 1 2 3 4 5 Annex – Net interest Core Bank Net interest bridge y/y, m -0.6% Euribor 3M 2,930 2,918 -37 +140 -5 2,900 -12 -2
Slide 30: Core Bank – Customer loans confirmed upward trend y/y
Core Bank – Customer loans confirmed upward trend y/y while down q/q due to market counterparts, with stable commercial lending volumes 1 2 3 4 5 Annex – Balance Sheet Core Bank Customer loans, bn Divisional breakdown – Customer loans, bn At const. FX q/q y/y CB Italy(1) 136.9 -0.8% +3.0% +3.4% -1.5
Slide 31: Italy – Gross impaired loans continued reduction
Italy – Gross impaired loans continued reduction with unlikely-to-pay down by over 12% y/y. Coverage ratio at 51.8% on impaired loans 1 2 3 4 5 Annex – Asset quality Italy Gross impaired loans(1), bn Gross bad loans (Sofferenze), bn +4.2% o.w. -0.3% c.0.7bn NPL sales in 3Q16 39.7 41.5 41.3 -2.9% Net
Slide 32: Non Core – gross impaired loans down
Non Core – gross impaired loans down with both lower bad loans and unlikely-to-pay 1 2 3 4 5 Annex – Non Core Asset quality Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn -5.3% +1.2% -1.5% -0.9% 52.5 50.4 49.7 36.6 37.4 37.1 Net Net impaired 25.3 bad loans 23.7 23.1 14.7 15.0 14.6 S
Slide 33: UCI SpA – Composition of the NPE loan portfolio and guarantees
UCI SpA – Composition of the NPE loan portfolio and guarantees 1 2 3 4 5 Annex – Collateral in SpA Gross NPE loans, bn – June-16 Secured bad loans, bn – June-16 17.2 54.1 Coverage ratio above 140% of gross bad loans including cash coverage 25.3 13.9 and collateral after haircut with full 69.4% fair
Slide 34: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 34
Slide 35: Group – P&L and volumes
Group – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 ∆ % vs. ∆ % vs. 9M15 9M16 ∆ % vs. 2Q16 3Q15 9M15 Total Revenues 5,749 5,735 5,332 5,589 5,476 6,139 5,455 -11.1% ▼ +2.3% ▲ 16,816 17,071 +1.5% ▲ Operating Costs -3,418 -3,435 -3,383 -3,382 -3,291 -3,289 -3,228 -
Slide 36: Core – P&L and volumes
Core – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 ∆ % vs. ∆ % vs. 9M15 9M16 ∆ % vs. 2Q16 3Q15 9M15 Total Revenues 5,706 5,720 5,330 5,634 5,490 6,205 5,529 -10.9% ▼ +3.7% ▲ 16,756 17,224 +2.8% ▲ Operating Costs -3,273 -3,343 -3,265 -3,287 -3,194 -3,247 -3,159 -2
Slide 37: Non Core – P&L and volumes
Non Core – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 ∆ % vs. ∆ % vs. 9M15 9M16 ∆ % vs. 2Q16 3Q15 9M15 Total Revenues 43 15 2 -45 -14 -66 -74 +12.7% ▼ n.m. ▼ 60 -153 n.m. ▼ Operating Costs -145 -92 -118 -96 -97 -42 -69 +64.9% ▲ -41.6% ▼ -355 -207 -41.5% ▼ Gross
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