UniCredit S.p.A. · MIL:UCG
UniCredit — Debt Investor Presentation (May 2013)
34 slides from UniCredit's debt investor presentation, May 2013
Slide 1: UniCredit Group Presentation to Fixed Income Investors
UniCredit Group Presentation to Fixed Income Investors May 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, p
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 11.03% and C
Slide 4: Agenda
Agenda Introduction & Strategy Consolidated Results 1Q13 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 Over 155,000 employees 2.2% Retail International About 9,300 branches 21.6% Institutional
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 Improving a
Slide 7: 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 (-4.1%)(1) Primary budget surplus at 1.9%, higher than
Slide 8: 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 426 Non Financial Private 372 117 Debt / GDP (%)(1) 120 289 263 254 259 77 234 212 90 90 127 74 82 309 251 212 164 161 169 135 131 Ireland Portugal Spain Italy France Austria Ge
Slide 9: 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) 17.5 14.2 11.6 12.0 10.8 5.4 4.8 Spain Portugal Ireland Italy France Germany Austria Euro area Italian Trade Balance 9.2 11.
Slide 10: Agenda
Agenda Introduction & Strategy Consolidated Results 1Q13 Annex 10
Slide 11: Executive Summary
Executive Summary Enhanced profitability, supported by CEE & Poland and Western Europe back to positive. Balance sheet strength and stable capital base confirmed 1Q13 Net profit at 449 mln vs. 553 mln loss in 4Q12. Net profit sustained by strong NOP recovery and GOP up 9.7% q/q with resilient core r
Slide 12: Net profit breakdown
Net profit breakdown Net profit at 449 mln, supported by CEE & Poland and Western Europe back to positive Net profit (mln) Net profit by region (mln) Integration costs, one off non-cash Western Europe Integration costs, one off non-cash items and buy-back(1) items and buy-back(1) CEE & Poland 914 91
Slide 13: Net Operating Profit breakdown
Net Operating Profit breakdown Increasing revenues, LLP sharply down after being exceptionally high 4Q12, and significant growth in Western Europe Net Operating Profit(1) (mln) Net Operating Profit(1) by region (mln) Buy-back(2) Net of buy-back (2) Western Europe Buy-back(2) 1,922 CEE & Poland 1,089
Slide 14: Volumes
Volumes Weak loan volumes but funding gap continues to improve Customer loans (mln) Customer deposits (mln) Western Europe Market and Institutional counterparties(1) Western Europe Market and Institutional counterparties(1) CEE & Poland CEE & Poland -2.3% +1.1% -1.8% -0.4% 550,345 547,144 537,454 40
Slide 15: Operating Costs
Operating Costs Down y/y with quarterly increase due to an exceptionally low 4Q Total operating costs (mln) Total operating costs by region (mln) Net of buy-back(1) Western Europe -1.8% CEE & Poland +2.1% 3,831 3,685 3,760 3,831 3,760 3,685 +2.1% 3,066 2,882 2,944 Staff +5.5% +1.7% 2,300 2,114 2,231
Slide 16: FTEs
FTEs Staff reduction continued this quarter with almost 900 fewer FTEs mainly in Western Europe FTEs(1) (unit) FTEs by region (unit) -3,806 -877 Western Europe (Kazakhstan) 159,283 156,354 155,477 CEE & Poland 159,283 156,354 155,477 Business -904 90,328 88,641 88,034 139,009 136,334 135,430 -0.7% D
Slide 17: Cost of Risk
Cost of Risk CoR down after exceptional 4Q12 coverage enhancement in Italy Lower LLP confirmed in 2013 despite macro environment in Italy not improving Loan Loss Provisions (mln) – Group COR (bps) Cost of Risk (bps) Western Europe 1Q12 4Q12 1Q13 CEE & Poland 650 4,608 173 153 56 37 12 11 14 1,357 4,
Slide 18: Group Asset Quality
Group Asset Quality Credit deterioration in Italy slowed down in the quarter Improving trend in Germany and Poland, stable in Austria NPLs (bn) +2.3% Gross impaired loans (bn) 41.3 44.4 45.4 +2.2% 79.8 81.5 72.7 Mar. 12 Dec. 12 Mar. 13 Coverage 57.1% 56.4% 55.6% ratio Other impaired loans (bn) +2.0%
Slide 19: Asset Quality in Italy
Asset Quality in Italy Slowdown of growth of impaired loans for the second quarter in a row (+2.9% q/q vs +3.2% q/q in 4Q12 and +5.2% q/q in 3Q12) NPLs (bn) +1.9% Gross impaired loans (bn) 31.0 31.5 28.0 +2.9% 56.7 58.3 51.0 Mar. 12 Dec. 12 Mar. 13 Coverage ratio 55.2% 56.0% 54.9% Other impaired loa
Slide 20: Asset Quality in Italy: gross flows
Asset Quality in Italy Gross flows decelerated for the second quarter in a row due to fewer inflows from performing Gross impaired loans flows (mln) Inflows (1) Outflows (2) 2,674 3,330 2,182 2,324 1,292 1,679 1,921 1,092 747 750 5,031 5,167 3,990 4,415 3,835 3,879 3,608 3,285 2,960 2,936 -1,666 -1,
Slide 21: Balance Sheet structure
Balance Sheet structure Total assets down due to lower loans to customers and trading assets Leverage ratio keeps reducing to 17.6x Total assets (bn) Tang. Shareholders’ Equity(1) (bn) Leverage ratio(2) TE per share (eur) 8.1 -0.7% +1.3% -0.6x -1.5% +1.9% -0.8x 919.7 949.8 926.8 912.9 46.2 46.8 45.9
Slide 22: Balance Sheet structure: securities in issue
Balance Sheet structure Securities in issue down leveraging on the strong liquidity position of the Group Securities in issue (bn) Net interbank position (bn) Financial investments(1) (bn) +3.1 bn -1.7 bn 108.7 111.8 +1.0 bn 103.3 102.2 -8.7 bn 163 165 170 162 Wholesale 96 93 99 92 -40.5 -43.0 -41.9
Slide 23: 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 8.0 bn 28.5 14% 26.4 25.8 Austria 30% Germany 24% 20% 27% Italy 48% 7% 51% 8% 54% 15% 9% 3% 11% 23% Germany 33% 35% 27% 34% 21% 53
Slide 24: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access Strong debt market franchise confirmed May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 7y OBG (1.000) 3y Sen 10y LTII (1.350) (1.500) 10y LTII 10y LTII (300 SGD) (750 USD) 5.5y OBG 10y Pfand 10y LTII 5y Sen 3y Sen (10+10 5y Sen (185 (1.000 bln RUB) Un
Slide 25: Liquidity
Liquidity Sound position: 1Y Liquidity buffer exceeds 12m wholesale funding Liquidity buffer (12 months) as of March 2013 (bn) (1) 162 Additional eligible assets 22 available within 12 months Cash and Deposits 33 with Central Banks Unencumbered assets 140 107 (immediately available) Liquidity buffer
Slide 26: Capital: RWA
Capital RWA down q/q driven by reduction in credit RWA Pertinence of Group’s geographical diversification reconfirmed RWA, eop (bln) RWA composition, eop (%) 455.5 -1.0% 427.1 422.9 Operat. 51.8 CB Germany 51.2 51.2 9% CB Austria Market 27.2 0% CB Italy 6% 27% 17.4 3% 17.9 375.8 358.6 Credit 353.8 2
Slide 27: Capital: organic capital generation
Capital Strong organic capital generation in the quarter Sale of 9.1% Pekao fully offset the regulatory changes Capital ratios Core Tier I ratio: q/q evolution (basis points) Bis 2.5 Bis 2.5 Bis 2.5 +21 bp -21 bp +11 bp 11.03% +8 bp 10.84% 14.52% 14.35% Total Capital 13.53% 11.44% 11.55% Tier I 10.8
Slide 28: Capital – Basel 3
Capital – Basel 3 Sound capital position with a 9.64% fully loaded ratio, 10.75% at the starting period of the phase in, before any earnings accrual CET1 ratio fully-loaded at March ‘13 CET1 ratio - first year application (2014) 11.03% 11.03% -0.20% 10.75% -0.87% -0.28% 10.55% +0.20% -0.70% 9.64% 9.
Slide 29: Capital – Active management of Group asset portfolio
Capital – Active management of Group asset portfolio Business re-focusing in CEE Capital optimization in CIB – run off portfolio Rationalization of the CEE presence Discontinuity of Merger of Merger of 2 Russia: JV Exit from Sale of Yapi banking Slovakian bank banks in with Renault- Kazakhstan Kredi
Slide 30: New Segment Reporting: commercial banking
New Segment Reporting A geographical approach in the commercial banking business (69% of the Group RWAs) KPIs 2012 1Q 2013 Cost / RWA ROAC ROAC Income contribution Back to profit in 1Q13, also thanks to costs (network transformation plan) and revenues (fees Commercial Bank Italy 58% 28% -19% 1% and
Slide 31: New Segment Reporting: Global businesses
New Segment Reporting “Global” businesses in CIB, AM and AG KPIs 2012 1Q 2013 Cost / Weight RWA ROAC ROAC Income Large and Large part of the business client oriented, with the Multinational bulk of reorganization completed in 2012 CIB Corporates 39% 21% 8% 17% Material ROAC increase in 2013 followin
Slide 32: Agenda
Agenda Introduction & Strategy Consolidated Results 1Q13 Annex 32
Slide 33: P&L
P&L UniCredit net profit at 449 mln in 1Q13 q/q y/y 1Q12 4Q12 1Q13 % % Total Revenues 7,110 5,799 6,080 4.9% -14.5% Operating Costs -3,831 -3,685 -3,760 2.1% -1.8% Gross Operating Profit 3,279 2,114 2,320 9.7% -29.3% Net Write-downs on Loans -1,357 -4,608 -1,231 -73.3% -9.3% Net Operating Profit 1,9
Slide 34: UniCredit Ratings Overview
UniCredit Ratings Overview UniCredit’s excellent diversification is a key rating strength, but the tough operating environment and Eurozone sovereign crisis are key concerns – UC SpA is currently constrained by Italy’s ratings, but German and Austrian subsidiaries are rated higher Ratings Comments L
UniCredit Group — Debt Investor Presentation (May 2013) on 6ix