Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (May 2016)
33 slides from Unicredit's debt investor presentation, May 10, 2016
Slide 1: UniCredit Group: 1Q16 results Presentation to Fixed Income Investors
UniCredit Group: 1Q16 results Presentation to Fixed Income Investors Milan, May 10th 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: 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 17 countries Institutional Investors • Over 124,000(2) employees 33% 41% Stable Shareholders • About 6,800(2) branches • More than 30.5m cus
Slide 4: Group net profit at 406m in 1Q16, fully loaded CET1 ratio at 10.85%
Group net profit at 406m in 1Q16, fully loaded CET1 ratio at 10.85% Operating Performance • Group net profit 406m in 1Q16, including 239m post tax restructuring charges • Core Bank net profit 1Q16 increased to c.1bn (excl. restructuring charges), 10.6% RoAC • Higher operating profitability due to re
Slide 5: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Strategic Plan update & Conclusions 5 Financials 5
Slide 6: Group - Net profit at 406m in 1Q16 including one-offs
Group - Net profit at 406m in 1Q16 including one-offs in CB Austria and Italy. Adjusted net profit at 645m 1 2 3 4 5 Group - Results Net profit, m Net profit 1Q16 by division, m Including - RoAC(3) CB Italy 354 32m restr. 16.8% charges(1) CB Germany 108 11.5% -20.8% Including -207m 645m ex. CB Austr
Slide 7: Group - Sound balance sheet and liquidity position
Group - Sound balance sheet and liquidity position thanks to strength of the commercial franchise. Growing deposits offer potential for conversion into AuM 1 2 3 4 5 Group – Balance sheet Commercial loans, bn Commercial deposits, bn -0.5% +0.4% +9.6% +1.5% 436.9 433.2 434.9 360.2 389.1 394.8 Mar-15
Slide 8: Group – Stable fully loaded CET 1 ratio at 10.85%
Group – Stable fully loaded CET 1 ratio at 10.85% 1 2 3 4 5 Group – Regulatory capital Fully loaded Common Equity Tier 1 ratio(1) +75bp +14bp 10.94% +10bp -6bp +4bp -13bp -4bp 10.80% 10.85% 10.10% Mar-15 Dec-15 2015 actual Dec-15 1Q16 earnings 1Q16 divid. FX (RWA RWA AFS & Other Mar-16 ex. scrip div
Slide 9: Group – Slight increase in RWA mainly driven by loan growth
Group – Slight increase in RWA mainly driven by loan growth in CB Italy & Germany 1 2 3 4 5 Group – Regulatory capital -26.3bn q/q, bn 420.6 +3.8bn Operational +4.8 -1.0 Credit -1.0 +0.1 -0.2 -0.7 Market 394.4 43.9 +4.2 40.7 -0.4 +0.5 o.w. Market risk +0.2bn 390.6 +0.8 o.w. Operational risk - Credit
Slide 10: Group - Continued improvement of asset quality
Group - Continued improvement of AQ with net outflows and lower gross impaired loans. Coverage on gross impaired loans up to 51.7%. Net impaired loan ratio at 7.9% (-60bp y/y) 1 2 3 4 5 Group – Asset quality Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn -5.1% +1.2% -0.9% +1.8% 83.2
Slide 11: Leverage Ratio
Leverage Ratio A sound level is confirmed, comparing well with peers 1 2 3 4 5 Group – Leverage ratio 1Q16 - Fully Loaded BIS3 Leverage Ratio(1), % 6.3 6.4 5.7 5.0 4.8 4.4 4.4 4.5 4.3 4.0 4.0 4.1 3.7 3.3 3.4 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 UCG Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 P
Slide 12: Group – Medium-long term funding plan
Group – Medium-long term funding plan 2016 Group Funding Plan for 28bn to be reassessed in light of TLTRO 2 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) 29.8bn 19.5bn Germany 11% 29
Slide 13: Group Direct Funding and Retail Bonds Dynamics
Group Direct Funding and Retail Bonds Dynamics 1 2 3 4 5 Group – Direct funding 1Q16 Direct Funding(1) 1Q16 Retail Bonds €/bn €/bn 34.2 128.2 1.2 477.8 607.2 29.0 Incl. 34.2bn of retail bonds (senior + subordinated) 5.2 Direct Funding Deposits Securities Other liabilities(2) Retail sub. Retail senio
Slide 14: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access 1 2 3 4 5 Group – wholesale market May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dic 15 Jan 16 Feb 16 Mar 16 Apr 16 23/02/2016 01/09/2015 7Y MS + 1 bps MS + 5 bps Pfand 17/07/2015 (500) 08122015 6Y 01/03/2016 MS – 13 bps MS -5 bps Pfand T + 731 bps
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 Mar-16 (€bn) 189 Additional eligible assets 37 available within 12 months(1) Cash and Deposits 23 with Central Banks Unencumbered assets 15
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% TLAC 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 (2016-2018
Slide 17: Ratings Overview
Ratings Overview 1 2 3 4 5 Group – Rating Issuer Ratings(1) Recent actions and key individual rating drivers • On the 18th of December 2014, UC SpA's rating was aligned with the sovereign Italy, as S&P's criteria caps the Italy BBB-/Stable/A3 rating at the same level. On the 2nd of Dec 2015, S&P aff
Slide 18: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Strategic Plan update & Conclusions 5 Financials 18
Slide 19: Core Bank - Net profit at 735m in 1Q16
Core Bank - Net profit at 735m in 1Q16, 973m adjusted for restructuring charges, with return on allocated capital of 10.6% 1 2 3 4 5 Core Bank – P&L Cost/Income, % Ch. % Ch. % P&L, m 1Q15 4Q15 1Q16 Q/Q Y/Y -0.3pp 57.2 58.5 58.1 Revenues 5,706 5,634 5,490 -2.6% -3.8% Net interest 2,942 3,065 2,903 -5
Slide 20: Core Bank - Net interest broadly flat q/q
Core Bank - Net interest broadly flat q/q excl. days, FX effect and 4Q15 one offs. Positive higher commercial dynamics thanks to reduced weight of term funding, repricing on deposits and higher loan volumes 1 2 3 4 5 Core Bank – Net interest Net interest bridge q/q, m 3,065 -0.4% -96 Average -55 2,9
Slide 21: Core Bank – Strong growth in investment fees
Core Bank – Strong growth in investment fees increasing 7.1% q/q. Financing fees down due to lower volumes and Transaction fees impacted by regulation & Forex 1 2 3 4 5 Core Bank – Fees & Commission Net fees and commissions, m Investment services fees, m -1.8% -1.1% Recurring fees +0.6% +7.1% (c.60%
Slide 22: Core Bank – Positive costs dynamics
Core Bank – Positive costs dynamics as a result of lower FTE and continued reduction of administrative expenses 1 2 3 4 5 Core Bank – Total costs Costs, m Staff expenses, m -2.1% -2.2% -0.9% -3.1% 2,057 2,032 2,013 3,264 3,293 3,191 1Q15 4Q15 1Q16 Other administrative expenses(1), m -4.2% -6.85% 1Q1
Slide 23: Core Bank – LLP at 413m in 1Q16, cost of risk at 37bp
Core Bank – LLP at 413m in 1Q16, cost of risk at 37bp benefitting from an exceptionally low level in CB Germany & Austria, CIB & Poland and a marked reduction across all other divisions 1 2 3 4 5 Core Bank – Loan loss provisions Loan loss provisions, m Divisional breakdown – 1Q16 CoR, bp q/q y/y -28
Slide 24: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Strategic Plan update & Conclusions 5 Financials 24
Slide 25: Non Core – Reduction of gross loans via focused de-risking
Non Core – Reduction of gross loans via focused de-risking, risk profile improvement and increased collections 1 2 3 4 5 Non Core – Main trends Gross customer loans, bn Main drivers of run-down • 0.1bn disposals in 1Q16 and further 0.4bn NPL Disposals sold in April -10.8bn -2.8bn 71.5 Back to • 1.6b
Slide 26: Non Core – gross impaired loans down
Non Core – gross impaired loans down with net outflows coupled with lower other impaired and increased coverage ratio at 52.5% 1 2 3 4 5 Non Core – Asset quality Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn +4.1% -5.8% +1.1% -1.0% 36.3 37.4 37.8 54.7 52.0 51.5 Net Net 26.3 24.8 24
Slide 27: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Strategic Plan update & Conclusions 5 Financials 27
Slide 28: Focus on execution delivering cost reduction, capital efficiency and growth
Focus on execution delivering cost reduction, capital efficiency and growth in investment fees in a challenging market environment 1 2 3 4 5 Strategic Plan – Update Strategic Plan Delivering on Strategic Plan in 1Q16 • Market shares in deposits (+0.3pp in Italy) and loans up in our core markets Lead
Slide 29: Concluding remarks
Concluding remarks 1 2 3 4 5 • Strong franchise and diversified geographical footprint delivering solid operating performance in a difficult environment with resilient revenues and improving costs and LLP • Positive contribution of all divisions to Group results, with significant growth in CB Italy
Slide 30: Agenda
Agenda 1 Group 2 Core Bank 3 Non Core 4 Strategic Plan update & Conclusions 5 Financials 30
Slide 31: Group – P&L and volumes
Group – P&L and volumes Net profit at 406m in 1Q16 with resilient operating performance 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 ∆ % vs. ∆ % vs. 4Q15 1Q15 Total Revenues 5,749 5,735 5,332 5,589 5,476 -2.0% ▼ -4.7% ▼ Operating Costs -3,418 -3,435 -3,383 -3,382 -3,291 -2.7% ▼ -3.7% ▼ Gro
Slide 32: Core – P&L and volumes
Core – P&L and volumes 1 2 3 4 5 Financials Euro (m) 1Q15 2Q15 3Q15 4Q15 1Q16 ∆ % vs. ∆ % vs. 4Q15 1Q15 Total Revenues 5,706 5,720 5,330 5,634 5,490 -2.6% ▼ -3.8% ▼ Operating Costs -3,264 -3,331 -3,258 -3,293 -3,191 -3.1% ▼ -2.2% ▼ Gross Operating Profit 2,442 2,389 2,072 2,340 2,299 -1.8% ▼ -5.9% ▼
Slide 33: 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 ∆ % vs. ∆ % vs. 4Q15 1Q15 Total Revenues 43 15 2 -45 -14 n.m. ▲ n.m. ▼ Operating Costs -154 -104 -125 -89 -99 +11.7% ▲ -35.5% ▼ Gross Operating Profit -111 -89 -123 -134 -113 -15.5% ▲ +1.9% ▲ LLP -405 -317 -460 -491 -3