UniCredit S.p.A. · MIL:UCG

UniCredit — Goldman Sachs European Financials Conference 2017

22 slides from UniCredit's conference presentation, Jun 9, 2017

  1. Slide 1: Goldman Sachs European Financials Conference

    Goldman Sachs European Financials Conference Jean Pierre Mustier, CEO of UniCredit Group Madrid, June 9th, 2017

  2. 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

  3. Slide 3: Agenda

    Agenda 1 The Italian NPE environment 2 UniCredit NPE strategy - Transform 2019 3 UniCredit NPE operational plan 4 Achievements 5 Conclusions 3

  4. Slide 4: Italian NPE stock showing first signals of decrease after 2015 peak

    Italian NPE stock showing first signals of decrease after 2015 peak 1 2 3 4 5 The Italian NPE environment Gross NPE/ Loans to Customer (%) Gross Bad Loans/ Loans to Customer (%) % €bn 400 Bad Loans (€Bn) 20 Unlikely to pay (€Bn) 350 360 349 350 319 Past Due (€Bn) 300 261 15 250 220 197 210 175 215 1

  5. Slide 5: NPE dynamics show net improvement over the last three years

    NPE dynamics show net improvement over the last three years in terms of average default rate and recovery rate 1 2 3 4 5 The Italian NPE environment 2014 2015 2016 Inflows to NPE (m) 55,392 37,482 26,478 Outflows to performing (m) -13,024 -10,084 -7,867 Default Rate1 (%) 5.2 3.7 2.6 Cure Rate (%)2 5

  6. Slide 6: Recovery rate hit bottom in 2014 and is expected to further improve

    Recovery rate hit bottom in 2014 and is expected to further improve in coming three years 1 2 3 4 5 The Italian NPE environment 7 6.3% 6 5.5% 4.8% 5 4.5% 3.8% 4.1% 3.8% 4 3.2% 3.4% 2.9% 3.1% 3 2 1 0 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E Source: Bain, average of top 15 Italian ban

  7. Slide 7: Positive coverage trend in Italy

    Positive coverage trend in Italy 1 2 3 4 5 The Italian NPE environment 86.7% 89.1% Collateral coverage(1) LLP coverage 37.2% 42.1% 44.4% 51.9% 44.6% 2014 2015 2016 Bad loans coverage (%) 58.7 58.2 63.4 UTP coverage (%) 27.0 26.7 33.5 Past due coverage (%) 13.9 22.1 24.5 Note : 1. Value of the guaran

  8. Slide 8: The Italian NPE market: increasing levels of disposals

    The Italian NPE market: increasing levels of disposals 1 2 3 4 5 The Italian NPE environment NPE Disposals 2012/17 Disposals (€Bn) Expected 65(1) CAGR +69% ~40 18 12 5 4 7 2012 2013 2014 2015 2016 2017 8 Note 1: Disposals figures include FINO Source: Bain

  9. Slide 9: Key Players in the Italian NPE sector

    Key Players in the Italian NPE sector - Equity investors, financing providers and servicing providers 1 2 3 4 5 The Italian NPE environment Equity Investors Investors with servicing platforms / Investors that participated to NPL projects in Italy banks in Italy and Europe Apollo Arrow Algebris Anaca

  10. Slide 10: Agenda - UniCredit NPE strategy - Transform 2019

    1 The Italian NPE environment 2 UniCredit NPE strategy - Transform 2019 3 UniCredit NPE operational plan 4 Achievements 5 Conclusions 10

  11. Slide 11: De-risking of the balance sheet key to reduce the cost of capital

    De-risking of the balance sheet key to reduce the cost of capital of the Group 1 2 3 4 5 UniCredit NPE strategy Transform 2019 Comments Group, 1Q17 Gross loans, €bn 36.4 486.0 449.7 141.6 • At end September 2016, Group NPE Ratio of Gross NPE ratio, % 85.0% 15.1%, while the lowest of Italian banks, w

  12. Slide 12: UniCredit legacy NPE mainly originated 2005 to 2010, addressed with Non Core division

    UniCredit legacy mainly originated from 2005 to 2010 in Italy and addressed with the setup of the Non Core division 1 2 3 4 5 Non Core 2019 UniCredit NPE strategy Transform Italy Non Core NPE stock by origination year Gross NPE stock at 9M2016, €bn 22% 64% 14% 64% of total NPE, 1.0 0.8 0.6 0.4 49.7(

  13. Slide 13: Non Core rundown to reach 8.1bn net exposure by 2019

    Non Core rundown to reach 8.1bn net exposure by 2019, reducing gross loans by over 37bn 1 2 3 4 5 UniCredit NPE strategy Transform 2019 Non Core evolution Actions of Non Core run down Gross loans, €bn -€37.2bn Gross loans, Total -€37.2bn €bn 60.5 56.4 19.2 o/w gross NPE, 51.4 49.7 19.2 FINO • Full d

  14. Slide 14: Agenda - UniCredit NPE operational plan

    Agenda 1 The Italian NPE environment 2 UniCredit NPE strategy - Transform 2019 3 UniCredit NPE operational plan 4 Achievements 5 Conclusions 14

  15. Slide 15: NPE Operational Plan finalised to ensure reduction of NPE stock

    NPE Operational Plan finalised to ensure reduction of NPE stock Key objectives 1 2 3 4 5 UniCredit NPE operational plan NPE Stock • Reduce NPE stock at Group level by 30 bn in 2019 within Transform 2019 Recovery Performance • Accelerate reduction of NPE stock and improve recovery performance Recover

  16. Slide 16: Key Pillars of NPE Operational Plan

    Key Pillars of NPE Operational Plan 1 2 3 4 5 UniCredit NPE operational plan  Guidance and monitoring at Group level  Organizational framework to be applied in each Legal Entity Governance  Effective end-to-end process ensuring continuous interaction between Group Risk Management (Holding) and NP

  17. Slide 17: Agenda - Achievements

    1 The Italian NPE environment 2 UniCredit NPE strategy - Transform 2019 3 UniCredit NPE operational plan 4 Achievements 5 Conclusions 17

  18. Slide 18: Group – Lower NPE, improved NPE ratios and strengthened coverage ratios

    Group – Lower NPE, improved NPE ratios and strengthened coverage ratios 1 2 3 4 5 Achievements Non performing exposures(1), bn o.w. Gross bad loans, bn -38.8% -2.2% -28.2% 50.8 31.8 31.1 77.1 -1.8% Net bad loans 19.9 10.9 10.4 56.3 55.3 Mar-16 Dec-16 Mar-17 Coverage ratio 60.8% 65.6% 66.6% Net NPE 3

  19. Slide 19: UniCredit took a decisive step with FINO to accelerate Non Core run down

    UniCredit took a decisive step with FINO to accelerate the Non Core run down 1 2 3 4 5 Achievements  Two phases approach: FINO • Phase 1: "Segregation and Market Validation" Transaction • Phase 2: "Optimization and Active Portfolio Management"  Two signed framework agreements with PIMCO and Fortre

  20. Slide 20: Non Core – De-risking on track

    Non Core – De-risking on track 1 2 3 4 5 Achievements Actions of Non Core run down Gross loans, bn FINO Disposal of majority stake on track -24.1bn 60.5 -0.8bn Repayments 0.1bn in 1Q17 37.1 36.4 NPE 0.1bn in 1Q17, additional 0.5bn disposals Disposals signed in 2Q17 Perfoming 9.1 5.7 5.4 0.3bn in 1Q1

  21. Slide 21: Agenda - Conclusions

    1 The Italian NPE environment 2 UniCredit NPE strategy - Transform 2019 3 UniCredit NPE operational plan 4 Achievements 5 Conclusions 21

  22. Slide 22: Ongoing decisive actions to improve Group asset quality and de-risk balance sheet

    Ongoing decisive actions to improve Group asset quality and de-risk balance sheet in order to reduce Group Cost of Capital 1 2 3 4 5 Conclusions Active • Gross NPE reduced by 28.2% Y/Y 55.3 bn in 1Q17 and NPE ratio improved from 15.5% to 11.4% in 1Q17 Balance Sheet • Higher coverage ratio at 56.3% f

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