Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (August 2016)
32 slides from Unicredit's debt investor presentation, Aug 3, 2016
Slide 1: UniCredit Group 2Q16 and 1H16 results Presentation to Fixed Income Investors
UniCredit Group 2Q16 and 1H16 results Presentation to Fixed Income Investors Milan, August 3rd 2016
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: Opening remarks
Opening remarks In-depth strategic review launched in mid July encompassing all major areas of the Group Focus on capital optimization, further cost reduction, increased cross-selling and improved risk discipline Ensure continuous transformation of operations and maintain flexibility to seize value
Slide 4: UniCredit at a glance
UniCredit at a glance A clear international profile based on a strong European identity UniCredit Highlights Shareholders’ Structure • Strong local roots in 17 countries 15% Institutional Investors • Over 123,000(1) employees Retail, Miscellaneous & 42% Unidentified Investors • About 6,600(1) branch
Slide 5: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 5
Slide 6: Group – Adjusted net profit at 687m in 2Q16
Group – Adjusted net profit at 687m in 2Q16. Adjusted ROTE at 6.6% . Reported net profit at 916m 1 2 3 4 5 Group – Results Net profit, m Adjusted net profit 2Q16, m(1) Adjusted 645 net profit 1Q16 Reported net 916 +27.7% profit 2Q16 +125.7% 1,321 One-off 1,034 -96 trading gain 916 Visa Europe 522 -2
Slide 7: Group – Commercial loans and deposits growth confirm strength of franchise
Group – Commercial loans and deposits growth confirm strength of UniCredit's franchise 1 2 3 4 5 Group – Balance sheet Commercial loans, bn Commercial deposits, bn Total RWA / total assets, % +0.5% +7.7% -1.6pp +1.2% +0.5% +0.6pp 437.8 434.9 440.0 394.8 396.6 46.4 44.8 368.2 44.2 37.6% average peers
Slide 8: Group – Regulatory fully loaded CET1 ratio at 10.33%
Group – Regulatory fully loaded CET 1 ratio at 10.33% , up to 10.53% pro- forma for Fineco and Pekao ABB in July 1 2 3 4 5 Group – Regulatory capital Fully loaded Common Equity Tier 1 ratio +23bp +0bp -12bp -6bp -17bp 10.53% +20bp since July: 10.45% 0.20% • Fineco ABB +8bp • Pekao ABB +12bp 10.01% 1
Slide 9: Group – RWA increased mainly due to impact of negative rates
Group – RWA increased mainly due to impact of negative rates on market risk mitigated by operational risk improvement and securitizations 1 2 3 4 5 Group – Regulatory capital Main drivers of impact 344.0 337.0 337.6 q/q, bn Credit Credit Market RWA +4.9bn Operational +0.6bn +3.9 -2.4 -0.9 +399.3 Jun
Slide 10: Group – Continued reduction of gross impaired loans
Group - Continued reduction of gross impaired loans and decreasing flows to impaired. Coverage ratio up to 52.4% on gross impaired loans and to 61.6% on bad loans. Net impaired loan ratio at 7.5% (-90bp Y/Y) 1 2 3 4 5 Group – Asset quality Gross impaired loans(1) , bn Gross bad loans (sofferenze) (1
Slide 11: Leverage Ratio
Leverage Ratio A sound level is confirmed, comparing well with peers 1 2 3 4 5 Group – Leverage ratio 2Q16 - Fully Loaded BIS3 Leverage Ratio(1) , % 6.4 6.2 6.2 5.3 5.1 4.9 4.4 4.4 4.5 4.2 4.3 4.0 4.1 3.9 3.3 3.4 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 UCG Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer
Slide 12: Group – Medium-long term funding plan
Group – Medium-long term funding plan 2016 Funding Plan realized for 11.9bn or c. 43% as of July 22nd 1 2 3 4 5 Group – Funding plan Funding mix, managerial data % of M/L term run offs by region(2) 27.6bn Geographical distribution 32.8bn 8.2bn TLTRO not included(1) Germany 30.1bn 19.5bn 27.2% 11% It
Slide 13: Group Direct Funding and Retail Bonds Dynamics
Group Direct Funding and Retail Bonds Dynamics 1 2 3 4 5 Group – Direct funding 2Q16 Direct Funding (1) 2Q16 Retail Bonds €/bn €/bn 34.0 124.0 1.5 472.4 597.9 28.8 Incl. 34.0bn of retail bonds (senior + subordinated) 5.2 Direct Funding Deposits Securities Other liabilities (2) Retail sub. Retail sen
Slide 14: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access 1 2 3 4 5 Group – wholesale market Aug 15 Sep 15 Oct 15 Nov 15 Dic 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 01/09/2015 7Y Pfand 23/02/2016 MS + 5 bps (500) MS + 1 bps 08/12/2015 6Y 01/03/2016 26/05/2016 MS - 5 bps Pfand T + 731 bps MS + 432
Slide 15: Very strong liquidity position confirmed
Very strong liquidity position confirmed 1-year Group liquidity buffer exceeds 12m wholesale funding 1 2 3 4 5 Group – Liquidity position Liquidity buffer as of Jun-16 (€bn) (1) 198 Additional eligible assets 43 available within 12 months (1) Cash and Deposits 25 with Central Banks Unencumbered asse
Slide 16: TLAC Calibration and UniCredit Plan
TLAC Calibration and UniCredit Plan 1 2 3 4 5 Group – TLAC TLAC Requirements Earliest by 2019 TLAC planned issuance under MYP (2016-2018) 22.3% TL AC ratio 22.53% G-SIFI 1% 2019 old Senior outstanding 7.7bn 1.81% Capital conservation 2.5% 2.75% Senior bond 20 bn Pillar 2 4.70% Funding plan (2016-201
Slide 17: Ratings Overview
Ratings Overview 1 2 3 4 5 Group – Rating Issuer Ratings(1) Recent actions and key individual rating drivers Italy BBB-/Stable/A3 • On the 20th of July 2016, S&P affirmed UC SpA's rating with Stable Outlook following the announcement of a strategic review led by the new CEO and actions launched to e
Slide 18: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 18
Slide 19: Core Bank – Adjusted net profit at 1.1bn in 2Q16
Core Bank – Adjusted net profit at 1.1bn in 2Q16, RoAC of 12% . Reported net profit at 1.2bn 1 2 3 4 5 Core Bank – P&L Ch. % Ch. % Ch. % P&L, m 2Q15 1Q16 2Q16 Q/Q Y/Y 1H15 1H16 Y/Y Revenues 5,720 5,490 6,205 +13.0% +8.5% 11,426 11,695 +2.4% Net interest 2,991 2,903 2,963 +2.1% -0.9% 5,933 5,866 -1.1
Slide 20: Core Bank – Resilient core revenues in 2Q16
Core Bank – Resilient core revenues (net interest and fees) in 2Q16. Higher trading on the back of one-off gain and VISA Europe disposal 1 2 3 4 5 Core Bank – P&L Net interest (1), m Net fees and commissions, m -0.9% -1.1% -2.5% -2.2% +2.1% 5,933 5,866 -0.2% 3,976 3,890 2,991 2,903 2,963 1,994 1,946
Slide 21: Core Bank – Net interest increased Q/Q
Core Bank - Net interest increased Q/Q due to positive commercial dynamics, with lower cost of funding and higher loan volumes 1 2 3 4 5 Core Bank – Net interest Net interest bridge q/q, m +1.6% +42 -34 2,963 -9 Average 2,903 2,918 +40 -28 +34 +15 Euribor 3M Commercial dynamics: +79m -0.26% (-7bp q/
Slide 22: Core Bank – Fees affected by challenging market conditions
Core Bank – Fees affected by challenging market conditions in 2Q16 1 2 3 4 5 Core Bank – Fees & Commission Net fees and commissions, m Investment services fees, m Recurring fees (c.60% of tot.)(1) -0.4% -0.8% 1,805 1,797 892 902 895 -2.2% -2.5% 3,976 2Q15 1Q16 2Q16 1H15 1H16 3,890 -0.2% Financing se
Slide 23: Core Bank – Positive costs dynamics Y/Y
Core Bank – Positive costs dynamics Y/Y as a result of both lower staff and other administrative expenses. Q/Q trend affected by higher administrative expenses 1 2 3 4 5 Core Bank – Total costs Costs, m Staff expenses, m -3.9% -3.0% -0.1% 4,150 4,024 2,093 2,013 2,011 -2.7% -2.9% 6,616 6,441 2Q15 1Q
Slide 24: Core Bank – LLP at 513m in 2Q16
Core Bank – LLP at 513m in 2Q16. Cost of risk at 45bp with loan loss provisions releases in CIB, CBK Germany & Austria, mitigating higher loan loss provisions in CEE & Poland 1 2 3 4 5 Core Bank – Loan loss provisions Loan loss provisions, m Divisional breakdown – 2Q16 CoR, bp q/q y/y -20.9% CB Ital
Slide 25: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 25
Slide 26: Non Core – Gross loans continued reduction
Non Core – Gross loans continued reduction by almost 3bn in 2Q16. LLP at 401m including a 100m LLP single name release 1 2 3 4 5 Non Core – Main trends Gross customer loans, bn Main drivers of run-down Disposals • 0.6bn disposals in 2Q16 -11.6bn -2.9bn Back to • 1.4bn gross performing loans transfer
Slide 27: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 27
Slide 28: EBA 2016 Stress Test outcome
EBA 2016 Stress Test outcome – CET1 ratio transitional at 7.12% under the adverse scenario, embedding 347bp impact (vs. an unweighted average impact of 427bp within EBA sample) 1 2 3 4 5 Annex – 2016 EBA Stress Test 10.59% -1.10pp -0.70pp -1.88pp -3.47pp +0.21pp 7.12% 2015 CET1r Net interest Financi
Slide 29: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Annex 5 Financials 29
Slide 30: Group – P&L and volumes
Group – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 ∆ % vs. ∆ % vs. 1H15 1H16 ∆ % vs. 1Q16 2Q15 1H15 Total Revenues 5,749 5,735 5,332 5,589 5,476 6,139 +12.1% ▲ +7.1% ▲ 11,484 11,615 +1.1% ▲ Operating Costs -3,418 -3,435 -3,383 -3,382 -3,291 -3,289 -0.0% ▼ -4.3% ▼ -6,
Slide 31: Core – P&L and volumes
Core – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 ∆ % vs. ∆ % vs. 1H15 1H16 ∆ % vs. 1Q16 2Q15 1H15 Total Revenues 5,706 5,720 5,330 5,634 5,490 6,205 +13.0% ▲ +8.5% ▲ 11,426 11,695 +2.4% ▲ Operating Costs -3,273 -3,343 -3,265 -3,287 -3,194 -3,247 +1.7% ▲ -2.9% ▲ -6,6
Slide 32: Non Core – P&L and volumes
Non Core – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 ∆ % vs. ∆ % vs. 1H15 1H16 ∆ % vs. 1Q16 2Q15 1H15 Total Revenues 43 15 2 -45 -14 -66 +379.7% ▼ n.m. ▼ 58 -79 n.m. ▼ Operating Costs -145 -92 -118 -96 -97 -42 -56.9% ▲ -54.7% ▼ -237 -139 -41.5% ▲ Gross Operating Pro
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