Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (October 2023)
45 slides from Unicredit's debt investor presentation, Oct 24, 2023
Slide 1: UniCredit Unlocked
UniCredit Unlocked Continuing to deliver quality profitable growth while investing for the future Fixed Income & ESG presentation Milan, 24th October 2023
Slide 2: Agenda
UniCredit - Public Agenda UniCredit at a glance Financial highlights Funding and liquidity ESG 2
Slide 3: The Bank for Europe's future
The Bank for Europe’s future A new benchmark for banking leveraging our unique pan-European model A VISION OF BANKING EXCELLENCE … We build everything around our Clients, offering them value-added Group products and a unique gateway to Europe We empower and trust our People to create value for our c
Slide 4: Another quarter of quality profitable growth
UniCredit - Public UNICREDIT AT A GLANCE Another quarter of quality profitable growth 11th consecutive quarter of effectively balancing our three levers to deliver sustainable quality profitable growth, underpinning current and future distributions KEY METRICS 9M23 HIGHLIGHTS ACROSS OUR 3 LEVERS 33
Slide 5: Local excellence powered by our pan-European franchise
UniCredit - Public UNICREDIT AT A GLANCE Local excellence powered by our pan-European franchise Benefitting from outstanding performance in each region Connecting European clients ITALY GERMANY CENTRAL EUROPE EASTERN EUROPE PROFIT BEFORE TAX 4.3bn 2.0bn 1.8bn 1.3bn 9M/9M + 44% + 42% + 68% +78% NET R
Slide 6: Alpha Bank and UniCredit: a long-term partnership
UniCredit - Public UNICREDIT AT A GLANCE Alpha Bank and UniCredit: a long-term partnership Strategic long-term partnership Fully in line with our guiding M&A principles and underscoring quality of in Greece with Alpha Bank our factories, boosting the ability to grow quality revenue through 3rd parti
Slide 7: Investment in products to further boost fees when rates normalise
UniCredit - Public UNICREDIT AT A GLANCE Investment in products to further boost fees when rates normalise € ADDITIONAL YEARLY FEE € BASE AT RUN-RATE Growth supported by increased funds offering that € € ASSET MANAGEMENT retains higher share of value chain leveraging on products developed by in-hous
Slide 8: Updated Guidance and Confident Outlook
UniCredit - Public UNICREDIT AT A GLANCE Updated Guidance and Confident Outlook FY23 guidance FY24 guidance Net Revenue >22.2bn NII Potential reduction from increased pass through affecting NII for the whole sector, particularly Italy, and lower expected contribution from Russia o/w Net Interest >13
Slide 9: Agenda
UniCredit - Public Agenda UniCredit at a glance Financial highlights Funding and liquidity ESG 9
Slide 10: Revenues up +24% Y/Y on robust net interest income and trading
UniCredit - Public FINANCIAL HIGHLIGHTS Revenues up +24% Y/Y on robust net interest income and trading REVENUE, bn EVOLUTION BY ITEM, bn 9M/9M Y/Y Q/Q 3.4 3.5 3.6 Net + 22% + 24% Flat 2.3 2.5 2.5 3.3 Interest +27%1 +25%1 17.9 5.9 6.0 6.0 5.7 2.0 2.0 1.9 1.9 1.8 1.9 14.6 5.0 1.8 4.8 4.8 Fees 0.7 0.6
Slide 11: Continued quality net interest income growth
UniCredit - Public FINANCIAL HIGHLIGHTS Continued quality net interest income growth Avg Euribor 3M: +41bps Q/Q, +329bps Y/Y NET INTEREST, bn 3Q23: 3.78%; 2Q23: 3.36%; 3Q22: 0.49% >13.7bn 9M/9M Y/Y Q/Q FY23 guidance update MAIN DRIVERS + 43% + 45% + 3% ASSUMPTIONS SENSITIVITY Avg deposits Avg deposi
Slide 12: Resilient fees year-to-date despite macro headwinds
UniCredit - Public FINANCIAL HIGHLIGHTS Resilient fees year-to-date despite macro headwinds 214 AuM 194 195 200 194 194 195 197 195 STOCK FEE1, 9M/9M Y/Y Q/Q bn − 3% − 5% − 7% Stable2 -1%3 CHANGE BY FEE CATEGORIES 2.0 2.0 5.8 5.7 1.9 1.9 1.9 1.8 1.8 Q/Q Y/Y 0.8 0.7 -5% +4% 0.7 0.6 0.7 0.6 0.6 INVEST
Slide 13: Operational excellence absorbing investing and offsetting inflation
UniCredit - Public FINANCIAL HIGHLIGHTS Operational excellence absorbing investing and offsetting inflation 48% 49% 49% COST / 39% 47% ACHIEVING COST EXCELLENCE VIA 43% INCOME 39% 39% 39% TARGETED COST REDUCTIONS RATIO WHILE RE-INVESTING FOR GROWTH COSTS, 9M/9M Y/Y Q/Q bn − 1% UniCredit footprint −
Slide 14: Transformed and strong asset quality
UniCredit - Public FINANCIAL HIGHLIGHTS Transformed and strong asset quality 31bps Group excl. Russia Expected loss on stock slightly down at 38bps. Future CoR further protected by stable overlays at 1.75bn, Last 11 quarters prove a structurally lower and Expected loss on new business at 26bps i.e.
Slide 15: Asset quality details
UniCredit - Public FINANCIAL HIGHLIGHTS Asset quality details Gross NPE ratio 3.8% 2.9% 2.9% 2.7% 2.7% 2.6% 2.7% Net NPE ratio 1.9% 1.5% 1.5% 1.4% 1.4% 1.4% 1.4% Total gross NPE 17.8 Gross past due 0.8 4.8 13.9 13.8 Gross bad loans 0.8 0.8 12.5 12.6 12.1 12.0 0.9 0.8 0.8 0.8 3.4 3.3 2.6 2.7 2.9 2.9
Slide 16: Excellent capital generation continues
UniCredit - Public FINANCIAL HIGHLIGHTS Excellent capital generation continues MDA BUFFER 689bps 1 746bps 2 +2.3bn Net Profit: +79bps RWA: +35bps -0.8bn Cash dividend: -27bps Mainly capital -0.1bn AT1 & Cashes coupon: -2bps +113bps reserves & others +1bps 17.19% 16.64% 16.33% 3.3bn 16.00% -29bps -13
Slide 17: Agenda
UniCredit - Public Agenda UniCredit at a glance Financial highlights Funding and liquidity ESG 17
Slide 18: 2023 Group Funding Plan
UniCredit - Public FUNDING AND LIQUIDITY 2023 Group Funding Plan • UniCredit S.p.A. acts as the Group Holding as well as the Italian operating bank and is the TLAC/MREL issuer under Single-Point-of-Entry (SPE) • Geographical diversification and well-established name with recognition in domestic mark
Slide 19: 2023 TLAC/MREL Funding Plan: limited volumes on more senior instruments
UniCredit - Public FUNDING AND LIQUIDITY 2023 TLAC/MREL Funding Plan: limited volumes on more senior instruments UniCredit SpA 2023 TLAC/MREL expected funding plan, €/bn Main drivers MREL Funding Plan 2023 in line with historical trend 2023 Issued in Expected by Funding Plan 20233 YE23 Volumes skewe
Slide 20: Well balanced Group maturity profile
UniCredit - Public FUNDING AND LIQUIDITY Well balanced Group maturity profile Group liabilities structure breakdown1 M/L term liability structure Maturity profile up to 2026 (€bn)2 20,0 18.5 18,0 5% 7% 16,0 7,2 14,0 12.7 43% 12,0 11.4 10,0 5,1 2,0 3,8 34% 8,0 1,3 1,6 6,0 5.2 2,9 8,2 4,0 2,2 5,0 0,3
Slide 21: Liquidity profile
UniCredit - Public FUNDING AND LIQUIDITY Liquidity profile LOANS / DEPOSITS1 WELL BELOW 100% DEPOSIT MIX: >80% IN RETAIL AND SME CLIENTS • Granular, behaviourally sticky, transactional accounts Deposits1 - EOP 492 480 472 466 467 469 • >55% guaranteed3 at Group level; average retail balance4 <20k/€
Slide 22: Balance Sheet
UniCredit - Public FUNDING AND LIQUIDITY Balance Sheet 3Q23 balance sheet: 826bn €bn Other Assets 39 23 Other liabilities 40 Financial liabilities & hedging liabilities Financial Assets at Amortised Cost 84 63 Equity and equity instruments Cash and cash balances 87 93 Debt securities issued 41 Repos
Slide 23: 3Q23 ample buffers over TLAC and MREL requirements
UniCredit - Public FUNDING AND LIQUIDITY 3Q23 ample buffers over TLAC and MREL requirements TLAC MREL Eligible instruments 28.31% 32.36% 93.9bn Ample buffers over capital regulatory requirement Actual Buffer 641bps 773bps SP2 21.9bn CET1 ratio Fully Tier 1 ratio Loaded Stated transitional SNP3 7,5bn
Slide 24: Covered Bonds (CB) program
UniCredit - Public FUNDING AND LIQUIDITY Covered Bonds (CB) program UniCredit is a key mortage Mortgage Mortgage Public sector Mortgage Public sector Mortgage provider and a leading Covered Bond issuer in Italy, Germany Program size (Euro) 35bn 50bn 50bn 40bn 40bn 7bn Austria and Czech Republic Matu
Slide 25: Strong capitalization and risk profile are supportive in current environment
UniCredit - Public FUNDING AND LIQUIDITY Strong capitalization and risk profile are supportive in current environment BBB/Stable/A-21 Baa3/Negative/P-31 BBB/Stable/F21 Covered Bonds (Italian OBG I / OBG II)2 AA-/n.r. Aa3/Aa3 AA/n.r. Counterparty / Deposit rating3 BBB+ Baa1 BBB+ Senior Preferred/ Out
Slide 26: Agenda
UniCredit - Public Agenda UniCredit at a glance Financial highlights Funding and liquidity ESG 26
Slide 27: ESG Principles and 2022-2024 Targets
UniCredit - Public ESG ESG Principles and 2022-2024 Targets • We will hold ourselves to the highest possible standards so that we do the right thing by our clients and society • We are totally committed to supporting our clients in a just and fair transition • We will reflect & respect the views of
Slide 28: Leading by example and supporting our clients' green and social transition
UniCredit - Public ESG Leading by example and supporting our clients’ green and social transition 32 Environment % Social Governance Promoting sustainable financial instruments Promoting sustainable financial instruments CEO & Top Management remuneration1 9 c. 4.9bn 1 Own Social Bond issued in Sep 2
Slide 29: Main strategic commitments to support our overall ESG stance beyond climate
UniCredit - Public ESG Main strategic commitments to support our overall ESG stance beyond climate • Oct 21: signed Net Zero Banking Alliance commitment to reduce emissions on lending portfolio NET ZERO BANKING • Jan 23: set targets to 2030 interim targets on most carbon intensive sectors (see targe
Slide 30: UniCredit set Net Zero Group targets on the three prioritized sectors
UniCredit - Public ESG UniCredit set Net Zero Group targets on the three prioritized sectors UniCredit design elements Primary Emission Portfolio in scope Sector Value chain Main rationale 1 2021 Baseline2 2030 Target2 metric coverage (drawn exposure, €bn) ▪ Full value ▪ Financed ▪ Scope 33 ▪ Compre
Slide 31: Strong environmental, social and reputational risk management and policies
● UniCredit - Public ESG Strong environmental, social and reputational risk management and policies Applicability Provisions Type pf support A No coal developer customers (no increase in coal business since Sep 20) Full general and project financing 1 Class with current revenues from coal <= 25% and
Slide 32: Supporting integration of ESG into UniCredit's strategy
UniCredit - Public ESG Supporting integration of ESG into UniCredit’s strategy ORGANISATION AND GOVERNANCE STRUCTURE, FOCS ON ESG ESG GOVERNANCE AND MANAGEMENT A UniCredit's Board of Directors defines the overall strategy of the bank, which incorporates the Group's ESG strategy, overseeing its imple
Slide 33: Delivering on commitment to sustainability
UniCredit - Public ESG Delivering on commitment to sustainability 3Q22 4Q22 1Q23 2Q23 3Q23 First bank in Europe to obtain the 2023 Group Remuneration Policy ESG GRESB scoring on its approved by the Shareholders’ Meeting corporate real estate portfolio As signatory bank of the Principle for Responsib
Slide 34: ESG ratings and indices (1/2)
UniCredit - Public ESG ESG ratings and indices (1/2) ● Rating upgraded to “AA” as of July 23. UniCredit included in the Bloomberg MSCI Green Bond Index AA CCC B BB BBB A AA AAA ● Improvements in efforts to manage social risks and robust integration of ESG practices into lending Low ● ESG Risk Rating
Slide 35: ESG ratings and indices (2/2)
UniCredit - Public ESG ESG ratings and indices (2/2) ● Top rated Italian bank, with an EE+ rating. Example of EU excellence in sustainability EE+ F FF FFF E EE+ EEE (Very strong) ● Included in the following Standard Ethics indices: European Best in Class, European 100, European Banks, Italian, Itali
Slide 36: Annex
Annex
Slide 37: Focus on Commercial Real Estate (CRE) portfolio
UniCredit - Public ANNEX Focus on Commercial Real Estate (CRE) portfolio CRE vs total loans in line or below market1 in Italy, Germany and Austria; volume stable over recent years with declining gross NPE at c.4% CRE portfolio as of 2Q23 Split by Region, bn Split by asset class, bn Portfolio towards
Slide 38: Group gross loans breakdown by stages
UniCredit - Public ANNEX Group gross loans breakdown by stages Stage 3 Group gross loans1 and provisions EoP, bn 2.9% 2.7% 2.7% 2.6% 2.7% o/w Gross NPE (% of gross loans) Stage 3 3Q22 4Q22 1Q23 2Q23 3Q23 474 467 14 465 462 Coverage 50.4% 48.2% 48.5% 47.9% 48.1% Stage 3 ratio 13 13 12 448 12 Stage 2
Slide 39: Russia exposure details
UniCredit - Public ANNEX Russia exposure details RESIDUAL2 As of Sep-23 GROSS GROSS EXTREME LOSS NET EXTREME IMPACT FROM LOSS MAX EXPOSURE ASSESSMENT1 EXTREME LOSS ASSESSMENT1 ASSESSMENT1 CET1r impact bn bn bps bn bps 4 Participation value lower Q/Q due to Ruble depreciation Participation -2.5 3 -2.
Slide 40: End notes
End notes
Slide 41: Disclaimer
UniCredit - Public END NOTES Disclaimer This presentation may contain “forward-looking statements” which includes all statements Canada or Japan or any other jurisdiction where such an offer or solicitation would be that do not relate solely to historical or current facts and which are therefore inh
Slide 42: Information related to this presentation (1/4)
UniCredit - Public END NOTES Information related to this presentation (1/4) General notes 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 r
Slide 43: Information related to this presentation (2/4)
UniCredit - Public END NOTES Information related to this presentation (2/4) Main definitions “Allocated capital” calculated as 13.0% of RWA plus deductions “Clients” means those clients that made at least one transaction in the last three months “Cost of risk” based on reclassified P&L and Balance s
Slide 44: Information related to this presentation (3/4)
UniCredit - Public END NOTES Information related to this presentation (3/4) Main definitions “HQLA” High-Quality Liquid Assets - 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 stress. These assets are u
Slide 45: Information related to this presentation (4/4)
UniCredit - Public END NOTES Information related to this presentation (4/4) Main definitions “RoAC” annualized ratio between (i) Net profit after AT1/Cashes minus excess capital charge (where applicable) and (ii) allocated ca pital, both as defined above “RoTE” means (i) Net profit after AT1/Cashes
UniCredit — Debt Investor Presentation (October 2023) on 6ix