Unicredit S.p.a. · MIL:UCG
Unicredit — FY2018 Earnings Presentation
82 slides from Unicredit's earnings presentation, Feb 7, 2019
Slide 1: 4Q18 and FY18 Results
4Q18 and FY18 Results Milan, 7 February 2019
Slide 2: Preface - Extraordinary positive tax effect for 887m related to IFRS9 FTA
Preface - Extraordinary positive tax effect for 887m related to IFRS9 First Time Adoption on 4Q18 stated net profit As communicated at UniCredit's 1Q18 presentation (slide 39 Market Presentation), UniCredit took a gross impact of -3.8bn for the first time adoption (FTA) of IFRS9 on 1 January 2018. A
Slide 3: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 3
Slide 4: Executive summary – FY18
Strong FY18 performance up versus FY17, adjusted(1) net profit at 3.9bn Transform 2019 well ahead of schedule 1 2 3 4 5 6 7 8 Executive summary – FY18 Strong Group FY18 performance notwithstanding macro and one-offs • FY18 net operating profit of 6.4bn (+13.1% FY/FY), best since 2008 • FY18 adjusted
Slide 5: Executive summary – 4Q18
4Q18 Group adjusted net profit of 840m up 19.9% Y/Y(1) 1 2 3 4 5 6 7 8 Executive summary – 4Q18 Record quarterly results • 4Q18 Group adjusted net profit of 840m up 19.9% Y/Y(1) • Best fourth quarter in a decade for the second time running Sustained Core bank commercial performance • 4Q18 net intere
Slide 6: Strong adjusted FY18 net profit 3.9bn up 7.7% FY/FY
Group – Strong adjusted FY18 net profit 3.9bn up 7.7% FY/FY(1) notwithstanding macro and one-offs 1 2 3 4 5 6 7 8 Executive summary ∆ % vs. ∆ % vs. ∆ % vs. Group key figures FY17 FY18 4Q17 3Q18 4Q18 3Q18 4Q17 FY17 Total revenues, m 19,941 19,723 -1.1% 4,905 4,814 4,856 +0.9% -1.0% Operating costs, m
Slide 7: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 7
Slide 8: Transform 2019 achievements (1/2)
Transform 2019 achievements (1/2) 1 2 3 4 5 6 7 8 Transform 2019 update • 4Q18 CET1 ratio 12.07%. MDA buffer of 201bps(1) STRENGTHEN CET1 ratio guidance • FY19 CET1 ratio 12.0-12.5%, MDA buffer target of 200-250bps AND confirmed • Real estate disposals confirmed, expected +0.2p.p. CET1 ratio impact
Slide 9: Transform 2019 achievements (2/2)
Transform 2019 achievements (2/2) 1 2 3 4 5 6 7 8 Transform 2019 update Multichannel offer/ • CEE mobile user penetration(1) further improved by 2.3p.p. Q/Q to 40.5% customer experience • Confirming strong commitment to deliver innovative services in all Group geographies Commercial • Google Pay lau
Slide 10: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 10
Slide 11: Core – Adjusted FY18 RoTE 10.1% up 1.0p.p. FY/FY
Group Core – Adjusted FY18 RoTE 10.1% up 1.0p.p. FY/FY(1) 1 2 3 4 5 6 7 8 Group Core results highlights Group Core adjusted net profit(1), m Adjusted net profit(1) by division FY18, m FY18 RoAC(2) CB Italy 1,325 12% CB Germany 369 8% 4,656 4,266 CB Austria 432 16% CEE 1,5911,726 16% 836 1,051 1,050
Slide 12: Core – Adjusted FY18 net profit 4.7bn up 9.1% FY/FY
Group Core – Adjusted FY18 net profit 4.7bn up 9.1% FY/FY(1) 1 2 3 4 5 6 7 8 Group Core results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 • Strong commercial performance: net interest up 2.9% FY/FY Total revenues 19,872 19,783 -0.4% 4,896 4,814
Slide 13: Group – Adjusted FY18 net profit 3.9bn up 7.7% FY/FY
Group – Adjusted FY18 net profit 3.9bn up 7.7% FY/FY(1) 1 2 3 4 5 6 7 8 Group results highlights Main drivers Data in m FY17 FY18 ∆ % vs. FY17 4Q17 3Q18 4Q18 ∆ % vs. 3Q18 ∆ % vs. 4Q17 • Strong commercial revenues with net interest up 2.1% FY/FY and Total revenues 19,941 19,723 -1.1% 4,905 4,814 4,85
Slide 14: Group – 4Q18 net interest 2.8bn up 0.4% Q/Q
Group – 4Q18 net interest 2.8bn up 0.4% Q/Q thanks to positive loan dynamics 1 2 3 4 5 6 7 8 Group results highlights [ Net interest(1) Q/Q, m +0.4% -0.3% 2,765 2,764 +35 +0 +18 2,756 +20 2,776 Average -1 -3 -19 -18 -6 -1 -14 Euribor 3M Commercial dynamics: -10m -0.32% (flat Q/Q) 3Q18 FX 3Q18 Loan D
Slide 15: Core – Average Group Core loan volumes up 7.0bn Q/Q
Group – Average Group Core loan volumes up 7.0bn Q/Q 1 2 3 4 5 6 7 8 Group results highlights Avg. commercial loans(1) and rates(2) Customer loan rates(2) 4Q18 2.67% 2.57% 2.55% Customer Q/Q Y/Y rates +7.0bn Group Core (+1.8% Q/Q) CB Italy 2.46% +0bps -25bps +1.3% Avg. vol., 394.2 407.5 412.8 +1.3%
Slide 16: Core – End-of-period Group Core customer loans up 3.8bn Q/Q
Group – End-of-period Group Core customer loans up 3.8bn Q/Q 1 2 3 4 5 6 7 8 Group results highlights Customer loans (end-of-period)(1), bn Customer deposits (end-of-period)(1), bn Q/Q Y/Y Q/Q Y/Y CB Italy 145.6 +1.5% +6.0% CB Italy 146.3 +0.6% +3.8% CB Germany 84.5 -1.5% +4.6% CB Germany 91.7 +4.6%
Slide 17: Group – Fees down 1.4% Y/Y
Group – Fees down 1.4% Y/Y Transactional fees up 11.8% Y/Y, investment fees down 14.5% Y/Y 1 2 3 4 5 6 7 8 Group results highlights Fees Q/Q(1), m -1.4% +1.9% Q/Q Y/Y 1,682 +31 +10 1,659 1,628 -10 Investment 603 -1.6% -14.5% 706 613 fees Financing 403 434 +7.6% +3.3% 420 fees Transactional 612 623 +
Slide 18: Group – TFAs down 2.7% Q/Q due to market performance
Group – TFAs down 2.7% Q/Q due to market performance 1 2 3 4 5 6 7 8 Group results highlights Main drivers Group TFAs(1) 4Q18, bn Q/Q Y/Y 823.2 833.8 -22.7bn -12.1bn 811.1 -2.7% -1.5% • TFAs down 2.7% Q/Q to 811.1bn, mainly due to lower AuC: AuM 218.1 221.9 212.3 -9.7bn -5.9bn -4.3% -2.7% Assets u
Slide 19: Group – Trading income down 31.5% FY/FY
Group – Trading income down 31.5% FY/FY due to a very difficult market environment in 2H18 1 2 3 4 5 6 7 8 Group results highlights Trading income, m Dividends(1), m -31.5% +15.6% 1,818 738 +83.0% 1,245 638 -58.6% Client Driven 1,321 439 +46.7% Other dividend 327 -42.5% 1,175 219 384 149 277 120 Oth
Slide 20: Group – FY18 Group costs at 10.7bn better than 11.0bn target
Group – FY18 Group costs at 10.7bn better than 11.0bn target FY19 costs confirmed at 10.4bn 1 2 3 4 5 6 7 8 Group results highlights Main drivers Costs, m FTEs (eop) • Transform 2019 well ahead of -5,166 schedule: -5.6% Q/Q -1,087 100% of FTE reduction target 11,338 91,952 10,698 87,873 86,786 ach
Slide 21: Group – Disciplined cost reduction, both HR and Non HR costs down
Group – Disciplined cost reduction, both HR and Non HR costs down FY/FY 1 2 3 4 5 6 7 8 Group results highlights HR costs, m Non HR costs(1), m -7.0% -3.5% 6,905 6,423 4,433 CEE 741 4,275 756 CEE 627 644 -5.9% +2.3% +1.7% +9.8% W.E. 6,164 5,667 W.E. 3,806 3,631 1,701 1,575 1,601 1,092 1,017 1,116 18
Slide 22: Group – FY18 LLPs down 10.9% FY/FY
Group – FY18 LLPs down 10.9% FY/FY Gross NPE ratio 7.7% down 2.7p.p. Y/Y 1 2 3 4 5 6 7 8 Group results highlights Main drivers Loan loss provisions, m • FY18 LLPs down 10.9% FY/FY to 2.6bn. The overall risk -10.9% environment remains supportive • FY18 CoR of 58bps includes 5bps of models and 3bps of
Slide 23: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 23
Slide 24: CB Italy – Net operating profit 2.1bn in FY18
CB Italy – Net operating profit 2.1bn in FY18 up 2.7% FY/FY mainly thanks to lower costs 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 • Net interest down 5.6% FY/FY due to pressure on customer Total revenues 7,44
Slide 25: CB Germany – Resilient commercial performance, strong cost reduction
CB Germany – Resilient commercial performance, strong cost reduction 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 • Adjusted(1) commercial revenues (sum of net interest and fees) Total revenues 2,694 2,470 -8.3%
Slide 26: CB Austria – Resilient commercial performance, strong cost reduction
CB Austria – Resilient commercial performance, strong cost reduction 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 • Net interest down 3.3% FY/FY adjusted for one-offs(1), mainly Total revenues 1,583 1,563 -1.3% 4
Slide 27: CEE – Net operating profit 2.2bn up 15.6% FY/FY
CEE – Net operating profit 2.2bn up 15.6% FY/FY driven by strong commercial dynamics 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m (1) FY17 FY18 ∆ % vs. FY17 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. 3Q18 4Q17 • Net interest up 6.6% FY/FY at constant FX mainly thanks to constant constant
Slide 28: CIB – Net operating profit 2.2bn in FY18
CIB – Net operating profit 2.2bn in FY18 down 1.7% FY/FY mainly due to lower trading income partially compensated by lower LLPs 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 • Revenues down (-7.3% FY/FY) due to lo
Slide 29: Fineco – Net operating profit 374m 7.6% higher FY/FY
Fineco – Net operating profit 374m 7.6% higher FY/FY thanks to better revenues 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 • Revenues up 6.5% FY/FY supported by fees (+11.3% FY/FY) Total revenues 586 624 +6.5% 1
Slide 30: Corporate Centre – Net operating loss 563m in FY18
Group Corporate Centre – Net operating loss 563m in FY18 improved by 54.7% FY/FY thanks to better revenues and lower costs 1 2 3 4 5 6 7 8 Divisional results highlights ∆ % vs. ∆ % vs. ∆ % vs. Main drivers Data in m FY17 FY18 FY17 4Q17 3Q18 4Q18 3Q18 4Q17 Total revenues -732 -205 -71.9% -176 -13 -46
Slide 31: Non Core – 2021 accelerated Non Core rundown fully on track
Non Core – 2021 accelerated Non Core rundown fully on track 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m FY17 FY18 ∆ % vs. 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. FY17 3Q18 4Q17 Total revenues 68 -60 n.m. 9 0 -52 n.m. n.m. • In 4Q18 gross NPEs reduced by 2.0bn Q/Q mainly driven by Ope
Slide 32: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 32
Slide 33: Asset quality significantly improved as part of Transform 2019
Group – Asset quality significantly improved as part of Transform 2019 Gross NPEs dropped by 38.6bn since 3Q16, down 50 percent 1 2 3 4 5 6 7 8 Asset quality Massive reduction of NPE stock • Gross NPEs dropped by 38.6bn since 3Q16 (-50.3%) to 38.2bn, Net NPEs down 21.5bn since 3Q16 (-59.1%) to 14.9b
Slide 34: Core – Gross NPE ratio 4.1% down 99bps Y/Y
Group Core – Gross NPE ratio 4.1% down 99bps Y/Y Coverage ratio 57.8% up 2.4p.p. Y/Y 1 2 3 4 5 6 7 8 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -12.2% -12.0% -5.6% -3.0% 10.8 10.1 9.5 22.3 20.2 19.6 Net bad 3.4 3.0 2.8 loans 4Q17 3Q18 4Q18 Coverage ratio 68.9% 70.3% 70.8%
Slide 35: Core – Default rate at 1.7% in 4Q18
Group Core – Default rate at 1.7% in 4Q18 Cure rate at 11.6% 1 2 3 4 5 6 7 8 Asset quality Group Core(1) – net flows to NPEs, m Group Core(1) – loan evolution drivers, m Net flows 1,402 1,141 Flow from 486 877 Inflows UTP to 202 281 to NPEs 1,823 1,786 Bad loans 1,238 Outflows to -420 -361 528 584 -
Slide 36: CB Italy – Gross NPE ratio 5.7% down 95bps Y/Y
CB Italy – Gross NPE ratio 5.7% down 95bps Y/Y Coverage ratio 55.5% up 3.3p.p. Y/Y 1 2 3 4 5 6 7 8 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -9.1% -5.0% -6.0% -7.6% 9.6 9.2 4.5 4.6 4.2 8.7 Net Bad loans 1.5 1.4 1.3 4Q17 3Q18 4Q18 Coverage ratio 65.7% 69.5% 69.2% Net NPEs
Slide 37: CB Italy – Default rate at 2.2% in 4Q18
CB Italy – Default rate at 2.2% in 4Q18 Cure rate at 19.5% 1 2 3 4 5 6 7 8 Asset quality CB Italy – net flows to NPEs, m CB Italy – loan evolution drivers, m Net flows 437 552 268 Flow from 541 223 228 UTP to Bad loans Inflows 773 708 735 to NPEs -221 -167 171 Outflows to -467 122 performing 83 4Q17
Slide 38: Non Core – Gross loans down to 18.6bn better than target
Non Core – Gross loans down to 18.6bn better than target Performing exposure reduced to zero as per guidance 1 2 3 4 5 6 7 8 Asset quality Actions of Non Core rundown, bn Gross loans(1), bn 4Q18 FY18 Disposals 1.2 2.1 -10.7bn 29.3 Recoveries 0.4 1.2 -3.7bn 22.3 Write-offs 0.5 3.3 19 18.6 Back to Cor
Slide 39: Non Core – Gross NPEs 18.6bn down 28.7% Y/Y
Non Core – Gross NPEs 18.6bn down 28.7% Y/Y and 9.9% Q/Q Coverage ratio 64.3% up 7.1p.p. Y/Y 1 2 3 4 5 6 7 8 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -31.2% -28.7% -10.6% -9.9% Target 16.9 26.0 confirmed 13.0 11.7 20.6 19 Net bad 18.6 loans 6.1 3.3 3.0 14.9 4Q17 3Q18 4Q
Slide 40: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 40
Slide 41: CET1 ratio at 12.07%
Group – CET1 ratio at 12.07% as earnings generation compensated impact from regulation, models and procyclicality 1 2 3 4 5 6 7 8 Capital Fully loaded Common Equity Tier 1 ratio, % 12.11% +23bps +4bps +3bps 12.07% -9bps -25bps FVOCI: +7bps IFRS9 FTA DTA FX: +1bp o/w TRY: +4bps Regulation, models +5b
Slide 42: RWA up 7.6bn Q/Q due to additional regulation, models and procyclicality
Group – RWA up 7.6bn Q/Q due to additional regulation, models and procyclicality 1 2 3 4 5 6 7 8 Capital RWA transitional(1) Q/Q, bn +7.6bn Credit +7.1 +1.0 +2.7 +1.6 370.2 Market 356.1 362.6 Operational -1.0 -0.4 -3.4 Credit RWA: +9.4bn 307.5 316.2 325.6 16.1 15.5 12.1 32.5 30.9 32.5 4Q17 3Q18 Busi
Slide 43: Group – 4Q18 tangible equity 47.7bn up 3.0% from trough in 3Q18
Group – 4Q18 tangible equity 47.7bn up 3.0% from trough in 3Q18 1 2 3 4 5 6 7 8 Tangible equity Tangible equity (eop), bn Tangible book value per share(1) -7.0% +3.0% -7.2% 51.3 46.3 47.7 +3.0% 23.1 20.8 21.4 4Q17 3Q18 4Q18 4Q17 3Q18 4Q18 43 (1) End of period tangible book value per share equals end
Slide 44: Group – TLAC subordination ratio 18.13% pro-forma, 107bps buffer
Group – TLAC subordination ratio 18.13% pro-forma(1), 107bps buffer 1 2 3 4 5 6 7 8 TLAC UniCredit SpA 2019 TLAC Funding Plan Target FY 2019 bn Funding 2019 o/w to be issued(2) TLAC Requirement >19.6% 20.1-20.6% Senior Preferred exemption 2.5% TLAC buffer 2.5 2.5 target 50- 100bps Subordination req.
Slide 45: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 45
Slide 46: UniCredit reorganises senior management team to prepare for next strategic cycle
UniCredit reorganises senior management team to prepare for next strategic cycle 1 2 3 4 5 6 7 8 Reorganisation of Senior Management Group CEO J. P. Mustier CB Western CIB CB Central COO Finance & Europe Eastern Europe Control F. O. G. N. R. de R. Burton C. Vivaldi …(3) Giordano(1) Khayat(1) Bisagni
Slide 47: Strong FY18 performance puts UniCredit on track for last stretch of Transform 2019
Strong FY18 performance puts UniCredit on track for the last stretch of Transform 2019 marathon 1 2 3 4 5 6 7 8 Closing remarks Core bank performing very well resulting in high profitability • FY18 adjusted RoTE at 10.1%, up 1.0p.p. FY/FY(1), regardless of large additional provisions for US sanction
Slide 48: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 48
Slide 49: 2017 Non-recurring items
Group – 2017 non-recurring items 1 2 3 4 5 6 7 8 Annex – 2017 Non-recurring items 2017 2017 Net Profit, m Division Net Profit, m Division Pioneer disposal +2.1bn GCC 1Q Pekao and Pioneer net +48 GCC profit(1) One-off charge in Non Core -80 Non Core Pioneer net profit(1) +3 GCC Pekao and Pioneer net
Slide 50: 2018 Non-recurring items
Group – 2018 non-recurring items 1 2 3 4 5 6 7 8 Annex – 2018 Non-recurring items + 2018 Net Profit, m Division 1Q Net trading gains from +39 CIB participations 2Q Net gain from participation +27 CB Germany Pawn business disposal +114 CB Italy 3Q Yapi impairment -846 GCC Release of tax provision +14
Slide 51: Divisional monitoring KPIs for Group, Group Core and Non Core
Divisional monitoring KPIs for Group, Group Core and Non Core 1 2 3 4 5 6 7 8 Annex – CMD 2017 (updated) Group Group Core Non Core FY18 FY19 FY18 FY19 FY18 FY19 Revenues, bn 19.7 19.8 19.8 -0.1 0.0 Cost, bn -10.7 -10.4 -10.6 -0.1 -0.1 Cost/Income, % 54.2 52-53 53.5 n.m. n.m. LLP, bn -2.6 -2.6 -1.7 -
Slide 52: Divisional monitoring KPIs by division
Divisional monitoring KPIs(1) by division 1 2 3 4 5 6 7 8 Annex – CMD 2017 CB Italy CB Germany CB Austria CEE CIB GCC FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 Revenues, bn 7.3 7.5 2.5 2.5 1.6 1.6 4.3 4.4 3.8 3.9 -0.2 0.0 Cost, bn -4.1 -4.0 -1.7 -1.7 -1.0 -1.0 -1.6 -1.6 -1.6 -1.6 -
Slide 53: Group – Net interest at 10.9bn in FY18
Group – Net interest at 10.9bn in FY18, up 2.1% FY/FY thanks to commercial dynamics 1 2 3 4 5 6 7 8 Annex – P&L Net interest(1) FY/FY, m +2.1% 10,633 +227 +472 +179 +89 10,836 +20 10,856 10,486 +20 -57 -90 -42 -14 -185 -396 Average Commercial dynamics: +266m Euribor 3M -0.32% (+1bp Y/Y) FY17 FX one-
Slide 54: Resilient fees up 0.9% FY/FY
Group – Resilient fees up 0.9% FY/FY mainly thanks to transactional fees (+10.4% FY/FY) 1 2 3 4 5 6 7 8 Annex – P&L Fees FY/FY (1), m +0.9% FY/FY 6,695 +229 6,756 -135 -33 -4.9% Investment 2,632 2,767 fees Financing 1,688 -1.9% 1,721 fees Transactional 2,436 +10.4% 2,207 fees FY17 Investment Financi
Slide 55: TFAs – Divisional breakdown
TFAs – Divisional breakdown 1 2 3 4 5 6 7 8 Annex – Balance sheet Main drivers 4Q18 TFAs(1) divisional breakdown, bn • Group TFAs down by 12.1 bn (-1.5% Y/Y) to 811.1bn in 4Q18: CB Italy: TFAs down by 9.2bn (-2.7% Y/Y) to 336bn, due to lower 69.3 811.1 AuM (-5.2% Y/Y) offset by higher deposit (+3.
Slide 56: Systemic charges – Breakdown by type and division
Systemic charges – Breakdown by type and division 1 2 3 4 5 6 7 8 Annex – P&L FY18 Systemic Charges o/w SRF o/w DGS o/w Bank levies CB Italy 128 46 81 1 CB Germany 61 32 29 0 CB Austria 99 31 17 51 CEE 165 74 66 25 CIB 135 111 10 15 Fineco 14 0 14 0 GCC 216 97 8 111 Non Core 28 24 0 4 Group 846 415
Slide 57: Adjusted FY18 Core earnings per share at 1.98
Group – Adjusted(1) FY18 Core earnings per share at 1.98 1 2 3 4 5 6 7 8 Annex – EPS, DPS Adjusted(1) earnings per share Dividends per share(2) Group Group Core -15.7% -5.3% 0.32 2.09 1.98 0.27 -6.8% 1.74 1.62 FY17 FY18 FY17 FY18 FY17 FY18 (1) Group and Group Core adjusted net profit exclude the net
Slide 58: Yapi – Net operating profit 434m in FY18
Yapi – Net operating profit 434m in FY18 up 27.9% FY/FY at constant FX 1 2 3 4 5 6 7 8 Annex – Country details Main drivers(1) Data in m (1) FY17 FY18 ∆ % vs. FY17 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. 3Q18 4Q17 constant constant constant • Net interest up 46.8% FY/FY at constant FX, thanks to higher Total
Slide 59: Russia – Net operating profit 303m in FY18
Russia – Net operating profit 303m in FY18 down 5.2% FY/FY at constant FX 1 2 3 4 5 6 7 8 Annex – Country details Main drivers(1) Data in m (1) FY17 FY18 ∆ % vs. FY17 4Q17 3Q18 4Q18 ∆ % vs. ∆ % vs. 3Q18 4Q17 constant constant constant • Net interest down 1.6% FY/FY at constant FX mainly due to Total
Slide 60: CET1 capital fully loaded and CET1 transitional
Group – CET1 capital fully loaded and CET1 transitional 1 2 3 4 5 6 7 8 Annex – Capital CET1 fully loaded CET1 transitional(1) 2017 Basel 3 2018 Basel 3 -1.5p.p. phase-in 80% phase-in 100% -0.0p.p. -1.6p.p. 13.60% 12.11% 12.07% -0.0p.p. 13.73% 12.17% 12.13% 9.19% MDA 4Q18 4Q17 3Q18 4Q18 4Q17 3Q18 4Q
Slide 61: Tier 1 and total capital ratios well above MDA levels
Group – Tier 1 transitional and total capital ratios well above MDA levels 1 2 3 4 5 6 7 8 Annex – Capital Tier 1 transitional(1) Total capital transitional(1) 2017 Basel 3 2018 Basel 3 2017 Basel 3 2018 Basel 3 phase-in 80% phase-in 100% phase-in 80% phase-in 100% -2.3p.p. -1.7p.p. 18.10% -0.2p.p.
Slide 62: Leverage ratio fully loaded at 4.9%
Group – Leverage ratio fully loaded at 4.9% 1 2 3 4 5 6 7 8 Annex – Capital Basel 3 leverage ratio fully loaded Basel 3 leverage ratio transitional(1) 2017 Basel 3 2018 Basel 3 phase-in 80% phase-in 100% -61bps -66bps -2bps 5.55% -3bps 4.96% 4.94% 5.73% 5.09% 5.06% 4Q17 3Q18 4Q18 4Q17 3Q18 4Q18 (1)
Slide 63: Asset quality by division
Asset quality by division 1 2 3 4 5 6 7 8 Annex – Asset quality 4Q18 Group Group Core CB Italy CB Germany CB Austria CEE CIB Non Core Gross loans, bn 497.7 479.1 151.7 85.7 47.1 69.3 123.6 18.6 Gross NPE, bn 38.2 19.6 8.7 1.6 1.8 4.4 3.1 18.6 Net NPE, bn 14.9 8.3 3.9 0.8 0.8 1.5 1.3 6.6 Gross NPE ra
Slide 64: Asset quality – NPE dynamics
Asset quality – NPE dynamics CB Germany, CB Austria, CEE and CIB 1 2 3 4 5 6 7 8 Annex – Asset quality Net flows to NPEs, recoveries and write-offs – 4Q18, m Migrations from Unlikely-to-pay to Bad loans – 4Q18, m Recoveries 132 101 178 80 from UtP to Bad Write-off 36 26 274 98 31 297 220 11 9 154 11
Slide 65: Non Core gross NPEs breakdown by asset class
Asset quality – Non Core gross NPEs breakdown by asset class 1 2 3 4 5 6 7 8 Annex – Asset quality Non Core gross NPEs, bn Data as of 4Q18 18.6 8.7 3.9 3.1 2.2 0.6 0.1 Total Corporate Mortgages Leasing Small business Individual Old Vintage 65
Slide 66: Forborne exposures by region
Asset quality – Forborne exposures by region 1 2 3 4 5 6 7 8 Annex – Asset quality Forborne loans(1), bn 22.9 20.4 15.3 14.3 13.5 GROUP 19.7 ITALY NPEs 16.6 NPEs 11.1 15.0 14.2 10.7 10.0 Performing Exposure Performing Exposure 6.4 5.5 5.5 4.1 3.6 3.5 4Q17 3Q18 4Q18 4Q17 3Q18 4Q18 Coverage Coverage r
Slide 67: 4Q18 Group EL stock at 38bps with new business at 34bps
Asset quality – 4Q18 Group EL stock at 38bps with new business contribution at 34bps 1 2 3 4 5 6 7 8 Annex – Asset quality Group CB Italy CB Germany o/w 3bps models 0.38% impact(1) 0.63% 0.19% 0.34% 0.16% 0.35% New business Stock New business Stock New business Stock CB Austria CEE CIB 0.54% 0.68% 0
Slide 68: CB Italy and Non Core gross loans and NPE ratio by industries
Asset quality – CB Italy and Non Core gross loans and NPE ratio by Industries 1 2 3 4 5 6 7 8 Annex – Asset quality CB Italy 3Q18 – Gross loans breakdown by Nace Classification 75 Gross NPE 25 ratio % 15 6 6 3 3 3 3 2 2 2 1 2 Non Fin. Corp. Manufacturing Wholesale and Real estate Construction Other
Slide 69: CB Italy and Non Core collateralisation level
Asset quality – CB Italy and Non Core collateralisation level 1 2 3 4 5 6 7 8 Annex – Asset quality CB Italy(1) 3Q18 NPE Cash + Collateral coverage ratio walk (%) 88.2 -0.5 88.1 32.7 0.3 33.1 55.5 55.0 Cash coverage 2Q18 Collateral ratio 2Q18 Total coverage ratio 2Q18 Delta Collateral Delta Cash cov
Slide 70: CB Italy gross NPEs breakdown by origination date
Asset quality – CB Italy gross NPEs breakdown by origination date 1 2 3 4 5 6 7 8 Annex – Asset quality CB Italy NPEs stock by origination year as of 3Q18 Gross NPE stock, bn 5% 53% 42% 9.2 0.4 0.3 0.5 0.6 0.5 0.5 0.4 0.7 0.7 0.5 1.3 0.8 1.2 0.4 0.5 older 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 71: Non Core gross NPEs breakdown by origination date
Asset quality – Non Core gross NPEs breakdown by origination date 1 2 3 4 5 6 7 8 Annex – Asset quality Non Core NPEs stock by origination year as of 3Q18 Gross NPE stock, bn 9% 68% 22% 20.6 0.9 0.3 0.3 0.3 0.7 0.6 0.4 1.1 1.4 1.4 3.3 3.3 3.4 1.3 2.0 older 2005 2006 2007 2008 2009 2010 2011 2012 201
Slide 72: EBA transparency – Core NPL ratio compares well with European peers
EBA transparency – UniCredit Group's NPL ratio one of the best in Italy Core NPL ratio compares well with European peers 1 2 3 4 5 6 7 8 Annex – EBA transparency exercise NPL Ratio(1), % (1H2018) (2) (3) UC 8.7 CARIGE 27.0 BNP 5.2 MPS 20.6 UC Core 4.5 BPER 17.4 RAIFF 5.0 BAMI 16.9 BBVA 4.8 ICCREA 16
Slide 73: EBA transparency – Coverage ratio second highest in Eurozone sample
EBA transparency - Coverage ratio second highest in the sample of Eurozone banks and the highest in Italy 1 2 3 4 5 6 7 8 Annex – EBA transparency exercise Coverage Ratio(1) – specific provisions, % (1H2018) (2) (3) RAIFF 61.5 UC 60.6 UC 60.6 BPER 56.8 MPS 56.0 CASA 58.1 BPS 53.6 ERS 56.8 ISP 53.4 S
Slide 74: EBA transparency – CET1 ratio among the best
EBA transparency - UniCredit's CET1 ratio among the best compared to Eurozone and Italian peers from the EBA transparency exercise 1 2 3 4 5 6 7 8 Annex – EBA transparency exercise CET1 ratio FL(1), % (1H2018) (2) (3) CASA 14.4 MB 13.1 DB 13.7 CREDEM 13.0 CBK 13.0 UC 12.5 RAIFF 12.8 BPER 11.7 ISP 11
Slide 75: Glossary
Glossary 75
Slide 76: Glossary (1/6)
Glossary(1) (1/6) Glossary AT1 Additional Tier 1 Capital AuC Assets under Custody AuM Assets under Management Bad loans Exposures to borrowers in a state of insolvency or in an essentially similar situation, regardless of any loss forecasts made by the bank Number of branches consistent with CMD per
Slide 77: Glossary (2/6)
Glossary (2/6) Glossary Capital Markets Day – CMD perimeter as announced at CMD on 13 December 2016: variations related to CMD disposals of Immo Holding, Ukraine, 30% Fineco, Pekao and Pioneer Collateral coverage ratio Calculated as per EBA methodology, with collateral value capped at net loan level
Slide 78: Glossary (3/6)
Glossary (3/6) Glossary E2E End-to-End EBA European Banking Authority FINO "Failure Is Not an Option": project name for the disposal of a NPE portfolio (original gross book value of 17.7bn) Exposure to which forbearance measures have been applied, i.e. concessions towards a debtor who is facing or F
Slide 79: Glossary (4/6)
Glossary (4/6) Glossary 1H/1H Current half year vs previous half year 9M/9M Current nine months vs previous nine months Migration rate Representing the percentage of UTPs that turn into bad loans MREL Minimum Requirement for own funds and Eligible Liabilities Inflows (from gross performing loans to
Slide 80: Glossary (5/6)
Glossary (5/6) Glossary NPE Ratio (Gross or Net) Non-Performing Exposure as a percentage of total customer loans Other administrative expenses (including indirect costs) net of expense recoveries, plus depreciation and Non HR costs amortisation Past Due Problematic exposures that, at the reporting d
Slide 81: Glossary (6/6)
Glossary (6/6) Glossary SRT Significant Risk Transfer Shareholders’ equity (including consolidated profit of the period) less intangible assets (goodwill and other Tangible equity intangibles), less AT1 component; dividend pay-out is accounted for on a cash basis Group commercial Total Financial Ass
Slide 82: 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