Unicredit S.p.a. · MIL:UCG
Unicredit — Q1 2024 Earnings Presentation
48 slides from Unicredit's earnings presentation, May 7, 2024
Slide 1: UniCredit Unlocked: Record results, significant value ahead
UniCredit Unlocked Record results, significant value ahead Milan, 07 May 2024
Slide 2: UniCredit Unlocked: delivering a new benchmark for banking
UniCredit Unlocked: delivering a new benchmark for banking Redefining Perpetual Excellence Transformation DELIVERED the best Q1 in UniCredit’s history, ITERATE UniCredit Unlocked with beating records once again, the 13th consecutive further focus on targeted client-centric Record results, quarter of
Slide 3: Redefining Excellence
Redefining Excellence Consistently delivering outstanding results, leading peers across all KPIs 6.3bn Net Revenue +7.5% Y/Y DELIVERED the best Q1 in UniCredit’s history, beating records once again, the 13th consecutive quarter of quality profitable growth 2.6bn Net Profit +23.9% Y/Y IMPROVED furthe
Slide 4: 13th consecutive quarter of quality profitable growth
UniCredit - Public REDEFINING EXCELLENCE 13th consecutive quarter of quality profitable growth Continuing our journey of success: across all metrics 1Q24 HIGHLIGHTS ACROSS OUR 3 LEVERS 1Q24 KEY METRICS In million 1Q24 7.5 Y/Y Q/Q QUALITY + % Net Revenue 6,268 +7.5% +10.9% NET +5.3% REVENUE GROWTH Ne
Slide 5: Net Revenue up 7.5% Y/Y on growing Fees and robust NII
UniCredit - Public REDEFINING EXCELLENCE Net Revenue up 7.5% Y/Y on growing Fees and robust NII NET REVENUE, GROWING NET REVENUE BASE WITH RECORD 1Q KEY HIGHLIGHTS bn bn NET INTEREST INCOME +9.0% excl. Net 5.8 6.0 6.3 Focus on quality growth, Current Account Fee 5.8 5.7 Reduction in Italy and reve
Slide 6: Robust and high quality net interest income
UniCredit - Public REDEFINING EXCELLENCE Robust and high quality net interest income NET INTEREST INCOME, STRONG RISK ADJUSTED NII KEY HIGHLIGHTS bn SOUND NII GROWTH +8% Y/Y 2.0% 2.1% 2.1% 2.2% 2.1% WHILE -1% Q/Q DRIVEN BY 1.9% +5.3% Net NII2 1.3% 1.3% Disciplined pass-through 1.2% NIM1 management
Slide 7: Structurally low CoR proving transformed and superior asset quality
UniCredit - Public REDEFINING EXCELLENCE Structurally low CoR proving transformed and superior asset quality QUARTERLY EVOLUTION KEY HIGHLIGHTS Underlying CoR1 22 19 19 Stated CoR remains very low Higher than stated 6 10 14 7 11 mainly due to bps -3 at 10bps mainly due to continued Russia net revers
Slide 8: Strong start to the year with broad-based fee growth
UniCredit - Public REDEFINING EXCELLENCE Strong start to the year with broad-based fee growth FEES, DYNAMIC DRIVEN BY RENEWED CLIENT APPETITE AND PRODUCT OFFERING KEY HIGHLIGHTS +7.6% excl. Current bn Account Fee SIZEABLE BASE Reduction in Italy and 151 140 135 136 138 140 139 144 152 securitization
Slide 9: Continued cost reduction despite inflation and investments
UniCredit - Public REDEFINING EXCELLENCE Continued cost reduction despite inflation and investments COSTS, SUPERIOR OPERATIONAL EXCELLENCE KEY HIGHLIGHTS Non-HR costs: -2.5% Y/Y bn HR costs: +0.5% Y/Y Impacted by bonus pool increase TARGETED EFFICIENCIES −1% Streamlining the organisation, 2.3 Cost e
Slide 10: Increase in CET1r driven by excellent organic capital generation
UniCredit - Public REDEFINING EXCELLENCE Increase in CET1r driven by excellent organic capital generation NET REVENUE / RWA KEY HIGHLIGHTS (%) QUALITY GROWTH +118bps Share buyback1: -54bps Our discipline and focus on (3.4bn) Cash dividend2: -36bps client segments with an above Cashes coupon: -2bps C
Slide 11: Italy: exceptional performance with ever increasing quality
UniCredit - Public REDEFINING EXCELLENCE Italy: exceptional performance with ever increasing quality ✓ Gross Revenue: +7.0% QUALITY GROWTH ✓ NII: +13.1%, Net NII1 +14.0%, thanks to favourable Italy Net Revenue rate environment combined with excellent pass- 2.6 2.6 2.8 through management 2.3 THREE FI
Slide 12: Germany: sustained profitability growth as transformation yields results
UniCredit - Public REDEFINING EXCELLENCE Germany: sustained profitability growth as transformation yields results ✓ Gross Revenue: -2% from a high base QUALITY GROWTH ✓ NII: -9%, due to higher funding costs on markets Germany Net Revenue positioning which are counterbalanced in trading 1.3 1.5 1.4 r
Slide 13: CE: Strong profitable growth capitalising on its corporate reach
UniCredit - Public REDEFINING EXCELLENCE CE: Strong profitable growth capitalising on its corporate reach ✓ Gross Revenue: +9.3% QUALITY GROWTH ✓ NII: +10.8%, Net NII1 +15.4%, supported by Central Europe Net Revenue positive interest rates environment 1.0 1.0 1.1 0.8 ✓ Fees: +9.7% driven by business
Slide 14: EE: catalyst for top-line growth; highest profitability
UniCredit - Public REDEFINING EXCELLENCE EE: catalyst for top-line growth; highest profitability ✓ Gross Revenue: +18.6% QUALITY GROWTH Eastern Europe Net Revenue ✓ NII: +22.7% driven by strong commercial business along favorable rate environment 0.6 0.7 0.7 ✓ Fees: +13% driven by Current Accounts &
Slide 15: Client Solutions: quality capital-light growth with best-in-class factories
UniCredit - Public REDEFINING EXCELLENCE Client Solutions: quality capital-light growth with best-in-class factories Enhancing our three Group product factories, and capitalising on scale and scope to deliver best-in-class products to our clients Gross Revenue, bn Y/Y Corporate Solutions 1.4 4 + % 2
Slide 16: Corporate Solutions explained
UniCredit - Public REDEFINING EXCELLENCE Corporate Solutions explained Our businesses are sizeable, profitable … and supported by strong and capital generative … trajectory … VISION 4.9 bn Revenue Rev/RWA avg. Cost / Income RoAC To be the go-to bank FY23 1Q24 1Q24 1Q24 for our small and mid ADVISORY
Slide 17: Payment Solutions explained
UniCredit - Public REDEFINING EXCELLENCE Payment Solutions explained A differentiated sizeable … uniquely capital-light business … positioned to lead … VISION 2.5 bn Revenue1 UNIVERSAL BANK NATURE Serving 15 million clients, Every European FY23 Retail (14m) and client’s first choice Corporates (1m)
Slide 18: Payment Solutions: Transactional Payments
UniCredit - Public REDEFINING EXCELLENCE Payment Solutions: Transactional Payments Transactional Payments1 OUR AMBITION Become the go-to bank for pan-European ✓ Further boost our leading position in Pan payments, with a European payments space compelling client OUR INHERENT ✓ Maintain our domestic l
Slide 19: Payment Solutions: Issuing and Acquiring
UniCredit - Public REDEFINING EXCELLENCE Payment Solutions: Issuing and Acquiring Issuing Acquiring OUR AMBITION Achieving a best-in-class ✓ Better leverage our ✓ Propel a merchant position in our own strategic partners acquiring business markets offering fully fully integrating integrated issuing a
Slide 20: Perpetual Transformation
Perpetual Transformation Progressing on all pillars to secure a sustainable, profitable future ITERATE UniCredit Unlocked with further focus on targeted Further supported by … client-centric profitable growth our unique buffers PROPEL our top-line leveraging our dual engines: further expanding our f
Slide 21: Refining our strategy towards a truly client-centric organisation
UniCredit - Public PERPETUAL TRANSFORMATION Refining our strategy towards a truly client-centric organisation A winning strategy Refining our client-centric approach Increasing number of clients and product penetration Commercial machine pointing to more profitable client segments SIMPLIFIED ORGANIS
Slide 22: Our dual-engine powered quality top line: profitable NII and strong Fees
UniCredit - Public PERPETUAL TRANSFORMATION Our dual-engine powered quality top line: profitable NII and strong Fees A dual-engine powered top-line delivering quality profitable growth … Top-tier high and diversified working in unison to underpin our superior RoTE in any macro scenario fee base larg
Slide 23: Leveraging operational, capital and risk excellence
UniCredit - Public PERPETUAL TRANSFORMATION Leveraging operational, capital and risk excellence Our confidence in maintaining industry leading operational and capital excellence is deeply rooted in tangible achievements and unique strategic foresight FOUNDATION OF PROVEN SUCCESS IDIOSYNCRATIC PROACT
Slide 24: Looking ahead
UniCredit - Public PERPETUAL TRANSFORMATION Looking ahead Upgrading 2024 Guidance … … Continue to progress in 2025-2026 Intention to either deploy or return excess capital no later than 2027 NET REVENUE CONFIRMED c.22.5bn c. 10bn calendar year 1 Sustainable Growth EPS, DPS Strong growth In the event
Slide 25: Still one of lowest P/Es and the lowest Price to Distribution in the sector
UniCredit - Public PERPETUAL TRANSFORMATION Still one of lowest P/Es and the lowest Price to Distribution in the sector We retained our leadership … but remain a unique investment opportunity, across key metrics … as valuation still not reflecting our past and future 1Q24 FY24E adjusted P/E at signi
Slide 26: Still significant value ahead
Still significant value ahead REDEFINING EXCELLENCE This quarter has once again demonstrated the Net Revenue +7.5% Y/Y 6.3 bn effectiveness of our UniCredit Unlocked strategy and our ability to create the Bank for Europe’s future and set a benchmark for our industry Net Profit +23.9% Y/Y 2.6 bn RoTE
Slide 27: Annex
Annex
Slide 28: We are transforming industrially, to sustainably deliver financially
UniCredit - Public ANNEX We are transforming industrially, to sustainably deliver financially Commercial Operating Our machine machine Culture Key Highlights of UniCredit Unlocked ongoing industrial transformation Share Price performance One revised and Simplifying and From siloed CIB to set- From h
Slide 29: Exceeding our ESG and related commitments
UniCredit - Public ANNEX Exceeding our ESG and related commitments CLIENTS SOCIAL EDUCATION ACCOUNTABILITY Published our Net Zero c.€9bn social Enhanced funding to ESG representation at inaugural Transition Plan financing1,4 via UniCredit Foundation - Group Executive Committee micro-credit, €30m to
Slide 30: Russia: resized and de-risked with discipline, at minimum cost
UniCredit - Public ANNEX Russia: resized and de-risked with discipline, at minimum cost REDUCTION OF GROUP EXPOSURE, DERISKING AT MINIMUM COST DECISIVE ACTIONS TAKEN Impact from extreme loss NON-LOCAL EXPOSURE AT PRACTICALLY ZERO assessment (bps)3 Conservatively provisioned our Cross –border exposur
Slide 31: Russia exposure details
UniCredit - Public ANNEX Russia exposure details RESIDUAL2 NET EXTREME IMPACT FROM GROSS MAX GROSS EXTREME LOSS LOSS EXPOSURE ASSESSMENT1 EXTREME LOSS ASSESSMENT1 ASSESSMENT1 CET1r impact bn bn bps bn bps Participation -2.8 3 -2.8 3 -35 4 -2.8 3 -35 4 Stable with 1Q24 profits offset by dividend dist
Slide 32: Updated base case macro scenario
UniCredit - Public ANNEX Updated base case macro scenario EUROZONE UNICREDIT FOOTPRINT Scenarios 2024-2025-2026 Scenarios 2024-2025-2026 Group Group excl. Russia BASE CASE BASE CASE BASE CASE MACRO MACRO MACRO SCENARIO SCENARIO SCENARIO 2024 2.3 0.5 2024 3.3 1.1 2.5 0.7 Inflation,% Inflation,% ◼
Slide 33: Group P&L and selected metrics
UniCredit - Public ANNEX Group P&L and selected metrics All figures in bn Unless otherwise stated 1Q23 2Q23 3Q23 4Q23 1Q24 Revenue 5.9 6.0 6.0 6.0 6.4 o/w Net interest income 3.3 3.5 3.6 3.6 3.6 o/w Fees 2.0 1.9 1.8 1.8 2.1 Costs -2.3 -2.3 -2.3 -2.5 -2.3 Gross Operating Profit 3.6 3.6 3.6 3.5 4.1 LL
Slide 34: New representation of fees and recast
UniCredit - Public ANNEX New representation of fees and recast NEW REPRESENTATION OF FEES PREVIOUS SPLIT BY PRODUCT NEW SPLIT BY PRODUCT MAINLY INCLUDES FEE AND COMMISSIONS DERIVING FROM INVESTMENT INVESTMENT PRODUCTS Asset under Management (AuM)1, Asset under Advisory (AuA)2 and Asset under Custody
Slide 35: Balance Sheet & liquidity profile
UniCredit - Public ANNEX Balance Sheet & liquidity profile 1Q24 balance sheet: 811bn €bn LIQUIDITY PROFILE Other Assets 40 24 Other liabilities Cash and cash balances 65 41 Financial liabilities & hedging liabilities LCR >140% 66 Equity and equity instruments Financial Assets at Amortised Cost 90 NS
Slide 36: Deposit details
UniCredit - Public ANNEX Deposit details Deposits from customers 467bn 1Q24 avg commercial vs 4Q23 Customer deposits (Net of repos and IC - EoP) (-2% Q/Q) deposits, bn rates 1Q24 (vs 4Q23) Italy Italy 181 -0.57% Germany -1% (-2bps) By Central Europe region Eastern Europe -1.79% Russia Germany 130 +0
Slide 37: Loan details
UniCredit - Public ANNEX Loan details Loans to customers 408bn 1Q24 avg gross commercial vs 4Q23 Gross customer performing (Net of repos and IC - EoP) (flat Q/Q) performing loans, bn loan rates 1Q24 (vs 4Q23) Italy Italy 146 4.84% Germany -2% (+14bps) By Central Europe region Eastern Europe Germany
Slide 38: Total Financial Assets
UniCredit - Public ANNEX Total Financial Assets TFAs1, bn STRONG TFAs DYNAMICS IN 1Q 14 9 8 8 9 AuM+AuA gross sales 3 +6% Insurance 3 2 2 2 gross sales 796 796 751 TFA evolution 751 759 757 781 130 136 AuM 126 127 126 13 15 quarterly 12 13 13 AuA 165 172 170 187 199 57 57 56 57 58 AuC 390 390 392 39
Slide 39: Asset quality details
UniCredit - Public ANNEX Asset quality details TOTAL GROSS NPE TOTAL GROSS NPE ALMOST STABLE KEY HIGHLIGHTS 12.6 12.1 12.0 12.1 11.7 NPE COVERAGE RATIO -43% slightly down Q/Q at 46% on book driven by single name in 21.2 GROSS NPE Italy evolution by quarter, bn HIGH LEVEL OF PROVISIONS 1Q23 2Q23 3Q23
Slide 40: Focus on Commercial Real Estate (CRE) portfolio
UniCredit - Public ANNEX Focus on Commercial Real Estate (CRE) portfolio CRE vs total loans in line or below market1 in Italy, Germany and Austria; volume stable over recent years with declining gross NPE at c.4% CRE portfolio as of 4Q23 Split by Region, bn Split by asset class, bn Portfolio towards
Slide 41: Group gross loans breakdown by stages
UniCredit - Public ANNEX Group gross loans breakdown by stages Stage 3 Group gross loans1 and provisions EoP, bn 2.7% 2.6% 2.7% 2.7% 2.7% o/w Gross NPE (% of gross loans) Stage 3 1Q23 2Q23 3Q23 4Q23 1Q24 465 462 Coverage Stage 3 13 12 447 440 445 ratio 48.5% 47.9% 48.1% 47.2% 45.5% 12 12 Reduction m
Slide 42: RWA details
UniCredit - Public ANNEX RWA details RWA, bn CONTINUED RWA EFFICIENCIES 299 295 290 285 -6% 280 299 RWA 280 evolution by quarter 1Q23 2Q23 3Q23 4Q23 1Q24 Credit risk Operational risk Market risk Q/Q EVOLUTION DETAILS, bn Y/Y EVOLUTION DETAILS, bn o/w -0.7bn o/w -2.8bn securitizations securitizations
Slide 43: End notes
End notes
Slide 44: Disclaimer
UniCredit - Public END NOTES Disclaimer This presentation may contain “forward-looking statements” which includes all statements Canada or Japan or any other jurisdiction where such an offer or solicitation would be that do not relate solely to historical or current facts and which are therefore inh
Slide 45: Information related to this presentation (1/4)
UniCredit - Public END NOTES Information related to this presentation (1/4) General notes End notes are an integral part of this presentation All data throughout the documents are in Euros Numbers throughout the presentation may not add up precisely to the totals provided in tables and text due to r
Slide 46: Information related to this presentation (2/4)
UniCredit - Public END NOTES Information related to this presentation (2/4) Main definitions “Allocated capital” calculated as 13.0% of RWA plus deductions “Clients” means those clients that made at least one transaction in the last three months “Cost of risk” based on reclassified P&L and Balance s
Slide 47: Information related to this presentation (3/4)
UniCredit - Public END NOTES Information related to this presentation (3/4) Main definitions “Gross NPE Ratio” Gross non performing exposures over gross loans to customers (including active repos, excluding debt securities and IFRS5 reclassified assets) “HQLA” High-Quality Liquid Assets - assets, wh
Slide 48: Information related to this presentation (4/4)
UniCredit - Public END NOTES Information related to this presentation (4/4) Main definitions “Pass-through” calculated as average cost of total deposits on average Euribor 3M or equivalent interest rate in the period. Deposit amount including term and sight products. “PD scenario” Impacts deriving f