Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (November 2013)
33 slides from Unicredit's debt investor presentation, November 2013
Slide 1: UniCredit Group Presentation to Fixed Income Investors
UniCredit Group Presentation to Fixed Income Investors November 2013
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,
Slide 3: Executive Summary
Executive Summary UniCredit – a strong investment proposition with a successfully strengthened Balance Sheet A well diversified pan-European bank with a leading market franchise in Italy, Germany, Austria and Central Eastern Europe Continued strengthening of our capital base with CT1 at 11.71% a
Slide 4: Agenda
Agenda Introduction & Strategy Consolidated Results 3Q13 Annex 4
Slide 5: UniCredit at a glance
UniCredit at a glance A clear international profile based on a strong European identity UniCredit Highlights Shareholders’ Structure(1) Strong local roots in almost 20 countries Domestic Institutional Investors Around 148,000 employees 2.2% Retail About 9,000 branches International 21.6% Insti
Slide 6: Pillars of Strategic Plan 2013 – 2015
Pillars of Strategic Plan 2013 – 2015 How to achieve our strategic objectives Balance Sheet Simplification & Business Italy Structure Cost Management Refocusing Turnaround Capital Central Functions CIB: business New service model strengthening streamlining reshaping and run-off portfolio I
Slide 7: Agenda
Agenda Introduction & Strategy Consolidated Results 3Q13 Annex 7
Slide 8: Executive Summary
Executive Summary Confirmed profitability leading to over 1bn net profit in 9M13 Stable coverage ratio and solid capitalization 3Q13 Net profit at 204 mln and over 1 bn in 9M13 Revenue trend affected by lower trading revenues, FX effect and regulatory changes impact on NII in Turkey Costs redu
Slide 9: Net profit breakdown
Net profit breakdown Net profit at 204 mln, sustained by the sale of Yapi Sigorta Stable underlying profitability in CEE&Poland Net profit (mln) Net profit by region (mln) Adjustments(1) CEE & Poland Adjustments(1) Western Europe 1,418 1,418 517 1,014 517 351 1,014 335 361 204 361 39 335 170 181 351
Slide 10: Net Operating Profit breakdown
Net Operating Profit breakdown Reducing cost base and lower Loan Loss Provisions partially counterbalanced lower trading revenues Buy-backs(1) CEE & Poland Revenues (adjusted(3)), mln Western Europe -4.7% -7.1% 18,853 17,962 Net Operating Profit(2), mln 6,196 6,162 5,722 3,446 1,078 756 2,725 3Q12 2
Slide 11: Total revenues
Total revenues Revenues down, mostly due to dropping trading income and unfavorable FX trend Buy-backs(1) CEE & Poland Net Interest, mln Net of buy-backs(1) Western Europe -2.0% -8.8% Revenues by Region, mln 3,534 3,320 3,254 10,861 9,903 -7.1% -10.8% 3Q12 2Q13 3Q13 9M12 9M13 19,609 18,216 6,255 6,4
Slide 12: Net interest
Net interest Net interest down q/q mostly due to FX depreciations and regulatory changes in Turkey which capped the lending rates, -0.6% net of these impacts Net interest (mln) Net interest by Region (mln) Western Europe -7.9% -8.8% CEE & Poland -2.0% 10,861 10,861 3,534 9,903 3,534 9,903 3,320 3,25
Slide 13: Net interest
Net interest Net interest declined by 0.6% q/q net of FX and regulatory changes in Turkey Repricing on deposits able to offset lower lending volumes Net interest bridge (mln) 3,320 -0.6% -32 -16 3,272 3,254 -63 -17 +26 +12 +60 -37 2Q13 FX Effect Regulatory Adjusted Loans Deposits Loans Deposits Term
Slide 14: Volumes
Volumes Weak commercial loan demand leading to lower avg. loan volumes. Deposits down due to decreasing funding needs which allowed a more selective pricing Customer loans (mln) Customer deposits (mln) Western Europe Market and Institutional counterparties(1) Western Europe Market and Institutional
Slide 15: Operating Costs
Operating Costs Continuing cost optimization with positive trends in both Western Europe and CEE&Poland Total operating costs (mln) Total operating costs by region (mln) Net of Buy-backs(1) Western Europe -3.0% CEE & Poland -1.6% -2.2% 3,721 3,672 3,611 11,289 11,042 3,721 3,672 11,289 11,042 3,611
Slide 16: FTEs
FTEs Staff reduction continued this quarter (-32K since March '08), also considering the sale of Yapi Sigorta and the deconsolidation of the IT services JV FTEs (unit) FTEs by region (unit) -8,849 Western Europe (Kazakhstan) -2,445 CEE & Poland 157,190 157,190 150,787 148,341 150,787 148,341 89,014
Slide 17: Cost of Risk
Cost of Risk CoR down, mostly thanks to CIB, CEE and Commercial Bank Italy, reflecting the stabilization of net flows to impaired and coverage ratio slightly up Loan Loss Provisions (mln) – Group CoR (bps) Cost of Risk (bps) Western Europe 3Q12 2Q13 3Q13 -10.6% CEE & Poland -6.8% 209 228 223 1,736 1
Slide 18: Group Asset Quality
Group Asset Quality Conservative approach leading to a slightly increased coverage ratio Net impaired loans ratio flat in the quarter NPLs (bn) +1.1% 43.5 46.5 47.0 Gross impaired loans (bn) +1.5% 82.6 83.9 77.8 Sept. 12 June 13 Sept. 13 Coverage ratio 55.6% 55.3% 55.5% Other impaired loans (bn) Sep
Slide 19: Asset Quality in Italy
Asset Quality in Italy This quarter confirmed a stabilization of impaired loans growth and coverage ratios Gross impaired loans (bn) NPLs (bn) +2.3% +0.8% 59.5 60.9 30.1 32.5 32.7 54.9 Sept. 12 June 13 Sept. 13 Sept. 12 June 13 Sept. 13 Coverage ratio 53.7% 54.6% 54.9% Coverage ratio 40.2% 42.1% 42.
Slide 20: Asset Quality in Italy
Asset Quality in Italy This quarter confirmed a stabilization of gross flows Gross impaired loans - net flows(1-2) (mln) 2,756 2,674 1,921 1,679 1,467 1,497 1,292 1,092 747 750 Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly 1Q13 2Q13 3Q13 avg.2H09 avg.1H10 avg.2H10 avg.1H11 av
Slide 21: Balance Sheet structure
Balance Sheet structure UCG was able to issue on the wholesale market at a very competitive pricing. Net interbank position visibly improving in the quarter Securities in issue (bn) Net interbank position (bn) Financial investments(1) (bn) +0.9 bn -6.2 bn +6.9 bn 117.5 118.3 -1.0 bn 108.7 102.2 165
Slide 22: Medium-Long Term funding plan
Medium-Long Term funding plan 2013 Funding Plan well on track through high quality and diversified issuance Funding Mix % of m/l term run-offs by Region(1) 34.7 bn 29 bn 24.7 bn 28.5 Germany Austria 25.6 26.4 23% 30% 19% 22% 15% Italy 49% 7% 54% 8% 9% 1% Poland 52% 9% 6% 11% 29% Germany 32% 32% 27%
Slide 23: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access Strong debt market franchise confirmed Jan 13 Feb Mar Apr May Jun Jul Aug Sep Oct Nov 7y OBG (1,000) 5.5Y OBG 2y Senior 12nc7Y 10y LTII 10y LTII LTII (750 USD) (1,000) (1.000) (300 SGD) (1.000) 3y Sen 2,75Y Sen 7y OBG 5. Sen 5y Sen Unicredit (20 bln R
Slide 24: Liquidity
Liquidity Sound position: 1Y Liquidity buffer exceeds 12m wholesale funding Liquidity buffer (12 months) as of September 2013 (bn) (1) 161.9 Additional eligible assets 23 available within 12 months Cash and Deposits 26 with Central Banks Unencumbered assets 138.5 112 (immediately available) Liquidit
Slide 25: Capital
Capital RWA down q/q driven by Credit RWAs (mostly CIB, Commercial Bank Italy, CEE), offsetting an increase in Market RWAs due to internal model roll-over RWA, eop (bln) RWA composition, eop (%) -2.7% 436.8 CB Germany 410.9 399.7 Operat. 52.4 9% 51.7 CB Austria 0% 51.7 CB Italy 6% 28% Credit 365.3 -
Slide 26: Capital
Capital Strong organic capital generation in the quarter driven by RWA reduction Capital ratios, BIS 2.5 Core Tier I ratio: q/q evolution (basis points) +32 bp -4 bp 11.71% 15.12% 15.42% +8 bp -6 bp Total Capital 13.83% 11.93% 12.22% 11.41% Tier I 11.26% +30bp 11.41% 11.71% Jun 13 Earnings Dividends
Slide 27: Capital – Basel 3
Capital – Basel 3 Including latest disposals, sound capital position with a 9.86% fully loaded ratio, 11.29% at the starting period of the phase in, before any earnings accrual CET1 ratio fully-loaded at September ‘13 CET1 ratio - first year application (2014) 11.71% 11.71% -0.32% -1.27% 11.24% 11.2
Slide 28: Agenda
Agenda Introduction & Strategy Consolidated Results 3Q13 Annex 28
Slide 29: P&L
P&L UniCredit net profit at 204 mln in 3Q13 and 1,014 mln in 9M13 q/q y/y y/y 3Q12 2Q13 3Q13 9M12 9M13 % % % Total Revenues 6,255 6,416 5,722 -10.8% -8.5% 19,609 18,216 -7.1% Operating Costs -3,721 -3,672 -3,611 -1.6% -3.0% -11,289 -11,042 -2.2% Gross Operating Profit 2,534 2,744 2,111 -23.1% -16.7%
Slide 30: Ratings Overview
Ratings Overview UniCredit's diversification makes the ratings more resilient Issuer Ratings(1) Comments Italy BBB/Neg/A2 Key drivers: sovereign risk and economic & banking industry conditions and weak asset quality and profitability UC SpA BBB/Neg/A2 UC SpA one notch down on the 12th July follo
Slide 31: Italy’s Macro Picture 1/3
Italy’s Macro Picture 1/3 Despite negative GDP growth, Deficit and Debt to GDP ratio under control Third largest economy in Euro-zone; no housing sector bubble burst Deficit/GDP ratio is under control: 2012 stood at -3%, lower than the Euro-zone (-3.6%)(1) Primary budget surplus at 2.3%, highe
Slide 32: Italy’s Macro Picture 2/3
Italy’s Macro Picture 2/3 Total indebtedness is in line with France and Germany, yet with a sounder primary balance Public 406 Non Financial Private 381 117 124 294 Debt / GDP (%)(1) 264 258 252 84 234 206 91 127 90 73 82 288 257 210 162 161 168 137 124 Ireland Portugal Spain Italy France Austria Ge
Slide 33: Italy’s Macro Picture 3/3
Italy’s Macro Picture 3/3 Italian Trade Balance back to positive in 2012; Unemployment still under control compared to other peripheral countries 26.3 Unemployment Rate (%)(1) 17.4 13.5 12.1 12.1 11.0 5.4 4.6 Spain Portugal Ireland Italy France Germany Austria Euro area Italian Trade Balance 11.0 12
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