Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (November 2024)
43 slides from Unicredit's debt investor presentation, Nov 6, 2024
Slide 1: UniCredit Unlocked
UniCredit Unlocked 15th consecutive quarter of profitable growth: record third quarter and nine-month results Fixed Income & ESG presentation Milan, 06 November 2024
Slide 2: Agenda
Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisation ESG 2
Slide 3: Ushering in a new era of UniCredit Unlocked
● UniCredit - Public Ushering in a new era of UniCredit Unlocked 15th consecutive quarter of profitable growth: record third quarter and nine-month results Transformed bank, moved from retrenchment 1 Set a clear vision, distinctive culture and winning strategy, our progressive transformation allowed
Slide 4: 15 consecutive quarters of profitable growth, record 3Q and 9M
● UniCredit - Public 15 consecutive quarters of profitable growth, record 3Q and 9M In million 3Q24 Y/Y 9M24 9M/9M 9M KEY HIGHLIGHTS ACROSS OUR LEVERS Net Revenue 5,978 +2.6% 18,559 +5.4% 5.4 Flat o/w NII 3,564 -1.0% Q/Q 10,707 +3.0% NET QUALITY + % o/w LLPs -165 +19.0% -283 +14.0% +8.7% excl. curre
Slide 5: Idiosyncratic accelerators: propelling us forward
● UniCredit - Public Idiosyncratic accelerators: propelling us forward Our investments are underway, with their full impact on results still to come Extent of transformation and benefits of lines of defence will become more apparent as macro normalises, STILL UNLOCKING unlocking differentiated value
Slide 6: Idiosyncratic accelerators: strategic flexibility
● UniCredit - Public Idiosyncratic accelerators: strategic flexibility Clear steps taken Flexibility of two options ahead In line with our strategy to look for external growth opportunities INVESTED CAPITAL INCREASE OUR INVESTMENT, MAXIMISING SHAREHOLDERS VALUE sitting idle, building optionality Sho
Slide 7: Clear quality growth trajectory: guidance and ambitions
● UniCredit - Public Clear quality growth trajectory: guidance and ambitions Confident to deliver on 2024 guidance and 2025-26 ambitions NET PROFIT 2024 GUIDANCE 2025-26 AMBITIONS c.10bn2 Net revenue c.24bn calendar year Sustainable Growth Clean Net c.10bn distributions EPS, DPS Strong growth Profit
Slide 8: Agenda
Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisation ESG 8
Slide 9: Net Revenue
● UniCredit - Public Net Revenue High-quality, resilient top line NET REVENUE, bn Strong net revenue base with record 3Q, bn CONSISTENT REVENUE GROWTH ... 9.1% +5.4% 8.0% 8.6% Net revenue / RWA Net Revenue continues to grow 6.0% (+5.4% 9M/9M, +2.6% Y/Y) 18.6 5.8 6.0 Net revenue 4.7 6.3 ... IN A SELE
Slide 10: Net Interest Income
● UniCredit - Public Net Interest Income Solid and highly profitable on its own merit NET INTEREST INCOME, bn RESILIENCE & QUALITY DISCIPLINE 2.1% 2.1% 2.0% 1.3% Resilient NII, flat sequentially with NIM1 3.6 3.6 3.6 3M Euribor down 25bps; down 1% Y/Y +3.0% Highly profitable NII reaching 2.5 NII
Slide 11: Asset Quality and Cost of Risk
● UniCredit - Public Asset Quality and Cost of Risk Structurally lower cost of risk protected by strong coverage LLPs, m STRUCTURALLY LOWER TODAY 16 bps 17 bps Strong and well-covered asset CoR ex. Russia 20 bps 283 12 11 bps 15 quality, with continued back-to- 7 performing (c.1.1bn writebacks 1 1
Slide 12: Fees
● UniCredit - Public Fees Continued strong momentum across all main categories FEES, bn CONTINUED STRONG MOMENTUM Strong fees from increased client appetite and broader product offering Strong fee growth +8.5% Y/Y and +7.2% +8.7% excl. CAFR in Italy 9M/9M (+8.7% excl. CAFR and securitization and sec
Slide 13: Costs and operational efficiency
● UniCredit - Public Costs and operational efficiency Firm discipline led to continued cost decline despite inflation and investments COSTS, bn CONFIRMING EXCELLENCE Superior Operational Excellence Continued cost reduction −1.2% Non-HR costs: -3.0% 9M/9M −1.4% Y/Y (-1.2% 9M/9M, -1.4% Y/Y) despite
Slide 14: RWAs and Capital efficiency
● UniCredit - Public RWAs and Capital efficiency Excellent organic capital generation continues SBB2: -54bps CET1 ratio % Cash dividend3: -36bps QUALITY GROWTH AT1 & Cashes4: -2bps OCG strongest quarter ever at 126bps +47bps (3.5bn) o/w: -9bps from capital reserves 126bps, and still best in class 16
Slide 15: Agenda
● UniCredit - Public Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisations ESG 15
Slide 16: Group Funding Plan well advanced. Lower secured funding thanks to solid liquidity position
● UniCredit - Public Group Funding Plan well advanced. Lower secured funding thanks to solid liquidity position • UniCredit S.p.A. acts as the Group Holding as well as the Italian operating bank and is the MREL issuer under Single-Point-of-Entry (SPE) • Geographical footprint and well-established na
Slide 17: MREL Funding Plan at de facto completed. Strong capital position limiting needs
● UniCredit - Public MREL Funding Plan at de facto completed. Strong capital position limiting needs UniCredit SpA 2024 MREL expected funding plan, €/bn Main drivers Funding Plan Issued Expected Overall MREL Funding Plan 2024 executed for >90%, 2024 in 20243 by YE24 with 6bn+ via public issuances ac
Slide 18: Balanced profile with contained upcoming redemptions
● UniCredit - Public Balanced profile with contained upcoming redemptions Group liabilities structure breakdown1 M/L term liability structure Maturity profile up to 2027, €bn2 18 18 5% AT1 UC SPA 6% 7 7 12 T2 UC SPA 40% 2 1 5 SENIOR UNSECURED UC SPA3 1 7 39% 8 0.8 5 UNSECURED OTHER SUBS 0.4 2 10% 0.
Slide 19: Balance sheet and liquidity profile
● UniCredit - Public Balance sheet and liquidity profile (€bn) LIQUIDITY PROFILE Cash and cash balances 38 3Q24 26 43 Other liabilities Other Assets 39 Financial liabilities & hedging liabilities Balance 64 Equity and equity instruments LCR c.140% Financial Assets at Amortised Cost 90 Sheet NSFR >12
Slide 20: Ample buffers over MREL requirements
● UniCredit - Public Ample buffers over MREL requirements MREL1 MREL Subordinated1 Eligible instruments Ample buffers over capital Actual 32.4% regulatory requirement Buffer 507bps 90.0bn 3Q24 24.2% SP2 22.9bn CET1 ratio Tier 1 ratio 463bps Fully Loaded5 transitional SNP3 9.7bn Regulatory 27.3% Tier
Slide 21: Covered Bonds (CB) program
● UniCredit - Public Covered Bonds (CB) program ITALY GERMANY AUSTRIA CZECH REPUBLIC UniCredit is a key Mortgage Mortgage Public Sector Mortgage Public Sector Mortgage mortgage provider and a leading Program size (Euro) 35bn 50bn 50bn 40bn 40bn 10bn Covered Bond Maturity (soft-bullet) ✓ ✓ 6 ✓ 6 ✓ 6
Slide 22: ARTS program to be expanded
● UniCredit - Public ARTS program to be expanded ARTS: a single program for Securitisations cross assets and regions In 2024, plan is to strengthen 4Q21-2023 2024 the ARTS program by executing transactions on already ITALY • Residential Mortgages Already securitized • Large Corporate segments throug
Slide 23: Very strong underlying creditworthiness increasingly recognized
● UniCredit - Public Performance Very strongrecognized underlying in impro creditworthiness increasingly recognized Moody's and Fitch ratings above the sovereign BBB / Stable / A-21 Baa3 / Stable / P-31 BBB / Positive / F21 Covered Bonds (Italian OBG I / OBG II)2 AA- / n.r. UniCredit’s stand-alone r
Slide 24: Agenda
● UniCredit - Public Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisations ESG 24
Slide 25: ESG Targets: focus on more meaningful penetration for 2024
● UniCredit - Public ESG Targets: focus on more meaningful penetration for 2024 tal G From ESG volumes … ESG Lending1 n Slightly below on 13% … to ESG penetration ov e nm environmental lending with ern 22.2bn, while outperforming Enviro ance on social lending with 11.1bn 15% Focus on ESG share over
Slide 26: Leading by example and supporting our clients' green and social transition
● UniCredit - Public Leading by example and supporting our clients’ green and social transition Environment Social Governance Promoting sustainable financial instruments Promoting sustainable financial instruments CEO & Top Management remuneration2 11 c. 6.5bn 1 own Social Bond (155m, Sep21) Communi
Slide 27: Main strategic commitments supporting our ESG stance beyond climate
● UniCredit - Public Main strategic commitments supporting our ESG stance beyond climate • Oct 21: signed Net Zero Banking • Achieve gender equity at all organisational levels and • Published our first Natural Capital and Alliance commitment to reduce promote a more diverse, inclusive and sustainabl
Slide 28: Overview of 2030 Net Zero targets and progress
● UniCredit - Public Overview of 2030 Net Zero targets and progress UniCredit Design Elements Baseline Progress Target Sector Value chain Primary metric1 Emission coverage Year Measure Value2 2022 vs 2021 By 20302 Shipping Shipping Operators3 Physical intensity Scope 1, 3 – WTW4 2022 Passenger: gCO2
Slide 29: Strong environmental, social and reputational risk management and policies
● UniCredit - Public Strong environmental, social and reputational risk management and policies Client applicability Group Reputational Risk Management Global Policy3 OIL & GAS A B C COAL A B C Other sector policies Defence/Armaments Current revenues from >25% & Increase in coal business Mining sect
Slide 30: Supporting the integration of ESG into UniCredit's strategy
● UniCredit - Public Supporting the integration of ESG into UniCredit’s strategy Organisational and Chair governance structure, Board of Directors Audit Committee focus on ESG Defines the overall strategy of the bank, including the components Group’s ESG strategy, and overseeing its implementation G
Slide 31: Delivering on commitment to sustainability
● UniCredit - Public Delivering on commitment to sustainability 3Q23 4Q23 1Q24 2Q24 3Q24 Sustainalytics score ‘UniCredit for CEE’ initiative improved to “12.9” from Improved to “64” from “60” (Advanced) Best Bank for Sustainability launched with over 2.6bn “14.2” (the lower the better) mainly thanks
Slide 32: ESG ratings and indices: our efforts recognised thanks to improvements
● UniCredit - Public ESG ratings and indices: our efforts recognised thanks to improvements CCC B BB BBB A AA AAA ● ESG rating stable at “AA” as of Sep 24. Included in the Bloomberg MSCI Green Bond Index ● Robust corporate governance practices and integration of ESG practices into lending Severe Hig
Slide 33: Annex
● UniCredit - Public Annex 33
Slide 34: Russia: 2025 targets almost met; reviewing next steps
● UniCredit - Public Russia 2025 targets almost met; reviewing next steps 2025 targets almost met one Continuing a clear strategy Local Deposits3,4, bn Net Local Loans3, bn year in advance, reviewing 77 78 -31% 8.3 7.3 next steps ACCELERATED ORDERLY SOLVENT WIND-DOWN of Russian exposure always − % −
Slide 35: Deposit details
● UniCredit - Public Deposit details Deposits from customers (Net of repos and IC - EoP) 458bn (-1.4% Q/Q) 3Q24 avg commercial deposits, bn vs 2Q24 Gross customer deposits rates 3Q24 (vs 2Q24) Italy 180 -0.53% Italy -0.4% (+5bps) Germany By Central Europe region Eastern Europe -1.77% Russia Germany
Slide 36: Loan details
● UniCredit - Public Loan details Loans to customers (Net of repos and IC - EoP) 403bn (-0.8% Q/Q) 3Q24 avg gross commercial performing loans, bn vs 2Q24 Gross customer performing loan rates 3Q24 (vs 2Q24) Italy Italy 144 -0.2% 4.74% Germany (-10bps) By Central Europe region Eastern Europe Germany 1
Slide 37: Group gross loans breakdown by stages
● UniCredit - Public Group gross loans breakdown by stages o/w Gross NPE GROUP GROSS LOANS1 AND PROVISIONS EOP, bn 2.7% 2.7% 2.7% 2.6% 2.7% Stage 3 447 445 444 48.1% 47.2% 45.5% 47.2% 47.0% 440 441 Stage 3 12 12 12 12 12 62 52 51 Stage 2 79 76 o/w Stage 2 17.6% 17.2% 14.0% 11.7% 11.6% o/w Gross perf
Slide 38: End notes
● UniCredit - Public End notes 38
Slide 39: Disclaimer
● UniCredit - Public Disclaimer This presentation may contain “forward-looking statements” which includes all offer or solicitation would be unlawful (the “Other Countries”), and there will be no statements that do not relate solely to historical or current facts and which are therefore public offer
Slide 40: General notes related to this presentation
● UniCredit - Public General notes related to this presentation END NOTES ARE AN INTEGRAL PART OF THIS PRESENTATION All data throughout the documents are in Euros Numbers throughout the presentation may not add up precisely to the totals provided in tables and text due to rounding Russia includes th
Slide 41: Main definitions
● UniCredit - Public Main definitions Allocated Capital Calculated as 13.0% of RWA plus deductions CAFR Current Account Fee Reduction in Italy Clients Clients that made at least one transaction in the last three months Cost of risk Based on reclassified P&L and Balance sheet, calculated as (i) LLPs
Slide 42: Main definitions
● UniCredit - Public Main definitions HQLA Assets which can be easily and immediately converted into cash at little or no loss of value even in periods of severe idiosyncratic and market High-Quality Liquid Assets stress. These assets are unencumbered, which means free of legal, regulatory, contract
Slide 43: Main definitions
● UniCredit - Public Main definitions PD scenario Impacts deriving from probability of default scenario, including rating dynamics RoAC Annualized ratio between (i) Net profit after AT1/Cashes minus excess capital charge (where applicable) and (ii) average allocated capital, both as defined above Ro
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