Unicredit S.p.a. · MIL:UCG
Unicredit — FY2015 Earnings Presentation
41 slides from Unicredit's earnings presentation, Feb 9, 2016
Slide 1: UniCredit Group: 4Q15 & FY15 results
UniCredit Group: 4Q15 & FY15 results Milan, February 9th, 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,
Slide 3: Group net profit 1.7bn in 2015; dividend of 12 cents proposed
Group net profit 1.7bn in 2015. Dividend of 12 cents for 2015 proposed via optional scrip (pay-out of 42%) STRATEGIC PLAN Implementation of Strategic Plan on track with agreements on restructuring of CBK Austria and sale of Ukrsotsbank Delivery of digital sale & service solutions already started, le
Slide 4: Execution delivering tangible results in first three months of implementation
Execution delivering tangible results in first three months of implementation Strategic Plan Delivering on Strategic Plan in 4Q15 LEADING PAN-EUROPEAN Strong franchise with 1 million new customers in 2015, reaching 32m clients CORPORATE AND RETAIL Increasing market shares in core geographies In 4Q15
Slide 5: Agenda
Agenda Group Core Bank Non Core Annex Financials 5
Slide 6: Group – Results
Group – Results Net profit at 1.7bn in 2015, notwithstanding negative one-offs. Adjusted net profit at 2.2bn Net profit, m Net profit FY15 adjusted for non rec. items (net of tax), m 2,008 Net profit stated FY15 1,694 9M15 1,694 4Q15 Restructuring 0.5bn 2.2bn charges +214 ex. non ex. non 198 rec. it
Slide 7: Group – Balance sheet
Group – Balance sheet Sound balance sheet and liquidity position thanks to a strong commercial franchise Commercial loans, bn Commercial deposits, bn Total RWA / Total assets, % +0.2% +9.0% -3.1pp -0.2% +2.3% -0.5pp 432.3 433.8 433.1 354.6 378.0 386.6 48.5 45.8 45.4 Dec-14 Sep-15 Dec-15 Dec-14 Sep-1
Slide 8: Group – Regulatory capital (1/2)
Group – Regulatory capital (1/2) Resilient fully loaded CET 1 ratio at 10.94% at Dec-15 including scrip dividend with a positive capital generation of 92bp y/y Fully loaded Common Equity Tier 1 ratio(1) Total capital ratio transitional(3) 14.20% 14.36% +92pp 13.55% Tier 2 11.43% 11.64% Tier 1 11.26%
Slide 9: Group – Regulatory capital (2/2)
Group – Regulatory capital (2/2) Continued RWA reduction in 4Q15, resulting in a decrease of 19bn in 2015, also thanks to management focus on capital light businesses RWA main drivers(1), bn -18.6bn Operational -9.9bn Credit 409.2 400.5 Market 44.2 43.2 +1.4 -2.5 -2.1 -3.9 -2.5 2.5 390.6 q/q, bn 344
Slide 10: Group – Asset quality
Group – Asset quality Sound improvement of AQ in 2015 as a result of management focus on de-risking, with gross impaired further down, bad loans stabilizing and improving net inflows Gross impaired loans(1), bn Gross bad loans (sofferenze)(1) ,bn Net inflows to impaired(2) Texas ratio on impaired(3)
Slide 11: Asset quality in Italy
Asset quality in Italy Confirmed better asset quality trend vs. banking system. Improving net inflows and coverage ratio on bad loans well above peers Other gross impaired loans - Base 100 at Dec-12 Net inflows to impaired(2) Coverage on gross bad loans UCI Spa(1) ABI sample (1) 137 137 138 141 138
Slide 12: Agenda
Agenda Group Core Bank Non Core Annex Financials 12
Slide 13: Core Bank – P&L
Core Bank – P&L Bottom line over 3.2bn, 3.7bn adjusted for negative one-offs leading to a return on allocated capital above 10% Ch. % Ch. % Cost / Income, % Datadata in m in million 3Q15 3Q15 4Q15 4Q15 Ch.Q/Q % Q/Q FY14 FY14 FY15 FY15 Ch. Y/Y % Y/Y -2.7pp +0.4pp Revenues 5,308 5,622 +5.9% 22,177 22,
Slide 14: Core Bank – Net interest income
Core Bank – Net interest income Net interest higher in 4Q15 with improvement in cost of funding and loans volumes more than offsetting lower customer rates on loans Net interest bridge q/q, m +5.1% +65 3,061 Euribor 3M +44 +44 +46 2,925 2,912 -0.09% -10 -14 -38 in 4Q15 Commercial dynamics: +85m (-6b
Slide 15: Core Bank – Fees and commissions
Core Bank – Fees and commissions Fees up by c.5% in FY15 thanks to investment fees: flight to quality supported higher TFA, while switch from AuC underpinned new inflows to AuM Net fees and commissions, m Investment services fees, m recurring fees (c.60% during 2015)(1) +12.1% +4.7% +3.3% 3,655 7,73
Slide 16: Core Bank – Total costs
Core Bank – Total costs Costs dynamics in 4Q15 mainly driven by CEE and due to higher depreciation and seasonality of administrative expenses Costs, m Staff expenses, m +2.0% +1.3% -0.1% 8,053 8,215 12,916 13,082 2,047 2,034 2,032 +1.3% 4Q14 3Q15 4Q15 FY14 FY15 3,311 3,285 Other administrative expen
Slide 17: Core Bank – Loan loss provisions
Core Bank – Loan loss provisions LLP at 2.5bn in 2015, resulting in a contained cost of risk at 56bp thanks to sound portfolio quality in CIB, CBK Germany & Austria and Poland Loan loss provisions, m Divisional breakdown – 4Q15 cost of risk, bp 2015 embedding increase q/q y/y of coverage on performi
Slide 18: Agenda
Agenda Group Core Bank Non Core Annex Financials 18
Slide 19: Non Core – Main trends
Non Core – Main trends Focus on continued de-risking delivered gross loans reduction, with lower and more stable LLP and net loss reduction y/y Gross customer loans, bn Main drivers of run-down, y/y -14.5bn c.4bn successfully sold in 2015 confirming a Disposals sound market appetite -2.0bn 78.2 2.9b
Slide 20: Non Core – Asset quality
Non Core – Asset quality Impaired loans down with lower other impaired and higher outflows from impaired. Bad loans stabilizing with disposals balancing internal migrations Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn Net inflows to impaired(2), m Other gross impaired loans(1), bn
Slide 21: Concluding remarks
Concluding remarks Strong capital generation with 10.94% fully loaded CET 1 ratio, above SREP threshold and fully loaded G-SIB buffer Strategic Plan execution on track, delivering tangible results Strong franchise and diversified geographical footprint delivering resilient revenues in a difficult ye
Slide 22: Annex
Agenda Group Core Bank Non Core Annex Strategic Plan Balance sheet items Core bank P&L items Core bank new flows Italy Financials 22
Slide 23: Delivery on discontinuity actions
Delivery on discontinuity actions Two key transactions announced allowing efficiency enhancement and significant de-risking with positive capital impact Strategic Plan Ukrsotsbank disposal Commercial Bank Austria restructuring Agreement on unwinding of active employees pension fund Disposal of Ukrso
Slide 24: Group – Medium-long term funding plan
Group – Medium-long term funding plan 2016 Group Funding Plan for 28bn Balance sheet items Funding mix, managerial data % of M/L term run offs by region(2) 8.2bn TLTRO 27.6bn Geographical distribution 29.5bn not included(1) 28.2bn 32.7bn 19.5bn 11% 29.6% Germany 17% 52% 58% 69% 8% Italy 22% Italy 44
Slide 25: Core Bank – Revenues
Core Bank – Revenues Resilient revenues in 2015, with higher fees significantly mitigating the impact of low rates and subdued loan demand on net interest Core bank P&L items Net interest(1), m Net fees and commissions, m -2.8% +4.7% 12,252 7,730 +4.6% 11,910 +3.2% 7,380 3,042 3,061 1,928 2,925 1,83
Slide 26: Core Bank – Net interest
Core Bank – Net interest Resilient net interest y/y with higher loans volume and lower cost of funding offsetting the negative impact of low customer rates on loans Core bank P&L items Net interest bridge y/y, m +1.8% +149 3,042 3,007 +151 +11 3,061 Euribor 3M -44 +107 -35 -0.09% -319 Commercial dyn
Slide 27: Core Bank – New loan origination in commercial banks
Core Bank – New loan origination in commercial banks MLT flows strongly up by over 23.3% in 2015 at 30.6bn, driven by all main customer segments across CBK (over 50bn new flows in 2015 at Group level) Core bank new flows New flows o/w household mortgages o/w mid corporates +20.6% +19.3% +19.7% 15,98
Slide 28: Italy – Asset quality breakdown
Italy – Asset quality breakdown Gross impaired continued reduction due to disposals and net outflows from impaired. Conservative coverage ratio well in excess of 50% Italy Gross impaired loans, bn(1) Gross bad loans (Sofferenze), bn Other gross impaired loans, bn Gross impaired loans Yearly variatio
Slide 29: Italian perimeter
Italian perimeter(1) Italian business net profit at -0.1bn in FY15, affected by 4Q15 non recurring items related to systemic charges and restructuring costs Italy Net interest, m Net fees and commissions, m -7.5% +6.4% -10.8% +5.8% 5,347 4,343 4,948 4,080 -3.0% +1.2% 1,322 1,216 1,180 1,008 1,053 1,
Slide 30: Agenda
Agenda Group Core Bank Non Core Annex Financials 30
Slide 31: Group – P&L and volumes
Group – P&L and volumes Net profit at 1.7bn in FY15 with resilient operating performance mitigating market volatility and charges related to ongoing restructuring Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Δ∆ % vs. % vs. Δ∆%% vs. vs. FY14 FY15 Δ∆%% vs. Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q
Slide 32: Core Bank – P&L and volumes
Core Bank – P&L and volumes Resilient revenues in FY15 thanks to fees mitigating the impact of low rates on net interest Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 ∆Δ% %vs. vs. Δ∆ % vs. % vs. FY14 FY15 Δ ∆%%vs. vs. Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FY14 FY15 3Q15 3Q15 4Q14 4Q14
Slide 33: Commercial Bank Italy – P&L and volumes
Commercial Bank Italy – P&L and volumes Positive operating progression in 2015 with revenues offsetting higher costs Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 ∆Δ% %vs. vs. Δ∆ % vs. % vs. FY14 FY15 Δ ∆%%vs. vs. Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FY14 FY15 3Q15 3Q15 4Q14 4Q14 FY14
Slide 34: Commercial Bank Germany – P&L and volumes
Commercial Bank Germany – P&L and volumes Increased operating performance in 2015 due to both higher revenues and lower costs. Very low CoR in 2015 also thanks to write-backs Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 ∆Δ%% vs. vs. Δ% ∆ %vs. vs. FY14 FY15 ∆Δ%%vs. vs. Euro (m) 1Q14 2Q14 3Q14 4Q1
Slide 35: Commercial Bank Austria – P&L and volumes
Commercial Bank Austria – P&L and volumes Net profit at 0.5bn in FY15 affected by non recurring items. Cost of risk confirms the high quality of the loan book Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Δ% ∆ %vs. vs. Δ∆ % vs. % vs. FY14 FY15 Δ∆ % vs. % vs. Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
Slide 36: Poland – P&L and volumes
Poland – P&L and volumes Net profit at 0.3bn in 2015 thanks to operational efficiency mitigating subdued revenues. Sound asset quality with a cost of risk at 43bp in 2015 Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Δ∆ % vs. % vs. Δ∆ % vs. % vs. FY14 FY15 Δ∆ % vs. % vs. Euro (m) 1Q14 2Q14 3Q14 4
Slide 37: CEE – P&L and volumes
CEE – P&L and volumes Net profit at 0.5bn in 2015, with positive earnings progression net of FX, despite higher LLP in Russia and Croatia and the impact of the valuation of Ukraine Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 ∆Δ% %vs. vs. Δ∆ % vs. % vs. FY14 FY15 Δ ∆%%vs. vs. Euro (m) 1Q14 2Q14
Slide 38: CIB – P&L and volumes
CIB – P&L and volumes Net profit at 1.2bn in FY15 thanks to resilient revenues and lower LLP Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Δ∆ % vs. % vs. Δ∆%% vs. vs. FY14 FY15 Δ∆%% vs. Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FY14 FY15 3Q15 3Q15 4Q14 4Q14 FY14 FY14 Total Revenues 996 904
Slide 39: Asset Gathering (Fineco) – P&L and volumes
Asset Gathering (Fineco) – P&L and volumes Double digit growth in revenues deliver a PBT higher by over 25% in FY15. Continued increase of net sales lead AuM to 26bn (+11% y/y) Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 ∆Δ%%vs. vs. Δ∆ % %vs. vs. FY14 FY15 Δ ∆%%vs. vs. Euro (m) 1Q14 2Q14 3Q14 4
Slide 40: Asset Management – P&L and volumes
Asset Management – P&L and volumes Net profit at 0.2bn in FY15, up by over 16% y/y thanks to strong fee generation. TFA at 230bn with high record net sales in 2015 of 15bn Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Δ ∆%%vs. vs. Δ∆ % vs. % vs. FY14 FY15 Δ% ∆ %vs. vs. Euro (m) 1Q14 2Q14 3Q14 4Q1
Slide 41: Non Core – P&L and volumes
Non Core – P&L and volumes Net loss at 1.5bn in FY15, down by over 10% thanks to lower loan loss provisions offsetting lower revenues Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 ∆Δ%%vs. vs. Δ ∆%%vs. vs. FY14 FY15 Δ% ∆ %vs. vs. Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FY14 FY15 3Q15 3Q15