Unicredit S.p.a. · MIL:UCG
Unicredit — Unicredito Spa Ord New — Q3 2024 Earnings Presentation
45 slides from Unicredit's earnings presentation, Nov 6, 2024
Slide 1: UniCredit Unlocked
UniCredit Unlocked 15th consecutive quarter of profitable growth: record third quarter and nine-month results Milan, 06 November 2024
Slide 2: Ushering in a new era of UniCredit Unlocked
Ushering in a new era of UniCredit Unlocked 15th consecutive quarter of profitable growth: record third quarter and nine-month results 15 consecutive quarters of quality growth Sustainable and sequential improvements to our KPIs underscore the success of our Quality Growth transformation, and marks
Slide 3: Transformed Bank: UniCredit Unlocked 2021 to 2024
Transformed Bank UniCredit Unlocked: 2021 to 2024 Clients at the Center From Laggard, to Leader WINNING STRATEGY Rank vs. Our clients and their communities, channelling FY211 1 1 1 our focus and the transformation of our Bank # from #9 # from #5 # from #8 People & Organisation: Net Revenue / RWA Cos
Slide 4: 15 consecutive quarters of profitable growth, record 3Q and 9M
15 consecutive quarters of profitable growth, record 3Q and 9M In million 3Q24 Y/Y 9M24 9M/9M 9M KEY HIGHLIGHTS ACROSS OUR LEVERS Net Revenue 5,978 +2.6% 18,559 +5.4% o/w NII o/w LLPs 3,564 -165 -1.0% Q/Q +19.0% Flat 10,707 -283 +3.0% +14.0% +8.7% excl. current account fees reduction NET REVENUE QUA
Slide 5: Net Revenue
Net Revenue High-quality, resilient top line NET REVENUE, bn Strong net revenue base with record 3Q, bn CONSISTENT REVENUE GROWTH ... 9.1% +5.4% 8.0% 8.6% Net revenue / RWA Net Revenue continues to grow 6.0% (+5.4% 9M/9M, +2.6% Y/Y) 18.6 5.8 6.3 6.0 Net revenue 4.7 ... IN A SELECTIVE, PROFITABLE, HI
Slide 6: Net Interest Income
Net Interest Income Solid and highly profitable on its own merit NET INTEREST INCOME, bn RESILIENCE & QUALITY DISCIPLINE 2.1% 2.1% 2.0% 1.3% Resilient NII, flat sequentially with NIM1 3.6 3.6 3.6 3M Euribor down 25bps; down 1% Y/Y +3.0% Highly profitable NII reaching 2.5 NII evolution, c.19% ROA
Slide 7: Asset Quality and Cost of Risk
Asset Quality and Cost of Risk Structurally lower cost of risk protected by strong coverage LLPs, m STRUCTURALLY LOWER TODAY 16 bps 17 bps Strong and well-covered asset CoR ex. Russia 20 bps 283 12 11 bps 15 quality, with continued back-to- 7 performing (c.1.1bn writebacks 1 1Q22-3Q24). High overl
Slide 8: Fees
Fees Continued strong momentum across all main categories FEES, bn CONTINUED STRONG MOMENTUM Strong fees from increased client appetite and broader product offering Strong fee growth +8.5% Y/Y and +7.2% +8.7% excl. CAFR in Italy 9M/9M (+8.7% excl. CAFR and securitization and securitization costs 155
Slide 9: Costs and operational efficiency
Costs and operational efficiency Firm discipline led to continued cost decline despite inflation and investments COSTS, bn CONFIRMING EXCELLENCE Superior Operational Excellence Continued cost reduction − 1.2% Non-HR costs: -3.0% 9M/9M − 1.4% Y/Y (-1.2% 9M/9M, -1.4% Y/Y) despite inflation and ongoi
Slide 10: RWAs and Capital efficiency
RWAs and Capital efficiency Excellent organic capital generation continues SBB2: -54bps CET1 ratio % Cash dividend3: -36bps QUALITY GROWTH AT1 & Cashes4: -2bps OCG strongest quarter ever at 126bps +47bps (3.5bn) o/w: -9bps from capital reserves 126bps, and still best in class 16.1 -93bps4 -3bps BUIL
Slide 11: Italy
Italy Quality earnings powerhouse continuing delivering high profitability and growth QUALITY GROWTH +4.6% ✓ Gross revenue: growing to 8.6bn (+5.1%) MAIN KPIs Net revenue, bn • NII: +5.4% due to excellent pass-through 7.9 8.2 • Fees: +7.4% thanks to Investment Products, 6.3 39% Payments, Corporate F
Slide 12: Germany
Germany Sustained Operational and Capital excellence leading to best 9M profit in a decade QUALITY GROWTH -0.8% ✓ Gross revenue: resilient at 4.2bn (+0.4%) MAIN KPIs Net revenue, bn • NII: -4.7% due to higher funding costs on 4.1 4.0 market positions, otherwise flat 2.3 3.3 3.6 29% • Fees: +1.6% tha
Slide 13: Central Europe
Central Europe Resilient growth coupled with further improvement in cost and capital efficiency QUALITY GROWTH +3.0% ✓ Gross revenue: growing to 3.3bn (+3.6%) MAIN KPIs Net revenue, bn • NII: +0.7% resilient despite downwards 3.2 3.3 rates environment 28% • Fees: +9.9% owing to strong investment 1.9
Slide 14: Eastern Europe
Eastern Europe Core growth engine delivering across all revenue streams QUALITY GROWTH ✓ Gross revenue: strong growth to 2.1bn +13.6% (+11.1%) MAIN KPIs Net revenue, bn 2.2 • NII: +11.4% quality commercial growth 1.9 26% • Fees: +10.5% robust growth driven by 1.5 GROWTH APPROACH OUR QUALITY THREE FI
Slide 15: Russia: 2025 targets almost met; reviewing next steps
Russia 2025 targets almost met; reviewing next steps 2025 targets almost met one Continuing a clear strategy Local Deposits3,4, bn Net Local Loans3, bn year in advance, reviewing 77 78 -31% 8.3 7.3 next steps ACCELERATED ORDERLY SOLVENT WIND-DOWN of Russian exposure always − % − % Virtually nil with
Slide 16: Client Solutions: strong performance across the board
Client Solutions: strong performance across the board Engine of sustainable capital-light, fee-based revenue (>65% Fees) Sustainable capital-light Fees / Total Leveraging Group scale revenue generation Revenue Revenue 8.6 4.1 #1 #2 Advisory & Trade & Client Risk >65% Financing Cor. Banking Managemen
Slide 17: Setting the benchmark: defining superior quality growth
Setting the benchmark: defining superior quality growth Demonstrating what quality growth means, widening competitive gap SUPERIOR QUALITY BEST-IN-CLASS CAPITAL & BEST-IN-CLASS PROFITABILITY AND TOP-LINE OPERATIONAL EXCELLENCE SUSTAINABLE OUTSIZED DISTRIBUTIONS NII RoAC NET REVENUE / RWA ROTE @13% C
Slide 18: Sustainable Quality Growth
Sustainable Quality Growth UniCredit Unlocked: 2025 and beyond Ushering in a new era of sustainable quality growth NII normalization Improving our achieved leadership and setting a new benchmark European growth outlook STRUCTURAL STRENGTHS Diversified geographic, quality client and business mix, wit
Slide 19: Structural strength: diversified and synergistic geographic mix
Structural strength: diversified and synergistic geographic mix Leveraging our diversified pan-European franchise, connecting Europe with strong synergies A superior PRO Quality growth potential geographic mix, 41% RS FIT AB Structural strength in leveraging our Group scale O and scope, connecting E
Slide 20: Structural strength: quality client and business mix
Structural strength: quality client and business mix Continuous focus on increasing the quality and profitability of our franchise A clear strategy built on our clients’ needs, putting clients at the center OUR PEOPLE: ENHANCING OUR CLIENT AND BUSINESS MIX EMPOWERED, TRAINED, POSITIONED IN THE RIGHT
Slide 21: Idiosyncratic accelerators: propelling us forward
Idiosyncratic accelerators: propelling us forward Our investments are underway, with their full impact on results still to come Extent of transformation and benefits of lines of defence will become more apparent as macro normalises, STILL UNLOCKING unlocking differentiated value and widening competi
Slide 22: Commerzbank and UniCredit in Germany (1 of 4)
Idiosyncratic accelerators: strategic flexibility Commerzbank and UniCredit in Germany (1 of 4) Two mirror-image banks High geographical complementarity Commerzbank and UniCredit in Germany have … THE SAME ROOTS Both banks have deep roots and a longstanding presence Foundation year in Germany, ensur
Slide 23: Commerzbank and UniCredit in Germany (2 of 4)
Idiosyncratic accelerators: strategic flexibility Commerzbank and UniCredit in Germany (2 of 4) CONCERNS RAISED vs. FACTS Would CBK depositors be at higher risk in case of merger? NO 1. Are UC GER deposits less protected than CBK ones? ✓ Both banks benefit in same way from German protection schemes;
Slide 24: Commerzbank and UniCredit in Germany (3 of 4)
Idiosyncratic accelerators: strategic flexibility Commerzbank and UniCredit in Germany (3 of 4) Diverging performance in Germany STRONGER TOP-LINE GROWTH SUPERIOR CAPITAL & COSTS EFFICIENCY HIGHER PROFITABILITY TRAJECTORY Underpinned by strong fees growth, highlighting With gap on Rev./RWA and C/I f
Slide 25: Commerzbank and UniCredit in Germany (4 of 4)
Idiosyncratic accelerators: strategic flexibility Commerzbank and UniCredit in Germany (4 of 4) Clear steps taken Flexibility of two options ahead In line with our strategy to look for external growth opportunities INVESTED CAPITAL INCREASE OUR INVESTMENT, MAXIMISING SHAREHOLDERS VALUE sitting idle,
Slide 26: Clear quality growth trajectory: set managerial actions
Clear quality growth trajectory: set managerial actions People delivering alpha, with proven execution capabilities i ness… …focus o UNPARALLELED QUALITY AND PROFITABILITY MIX OF OUR TOP-LINE t bus n ri gh GROW OUR FEE BASE1 TARGETING 40% OF TOTAL REVENUE gh tc li Further leverage product factorie
Slide 27: Clear quality growth trajectory: guidance and ambitions
Clear quality growth trajectory: guidance and ambitions Confident to deliver on 2024 guidance and 2025-26 ambitions NET PROFIT 2024 GUIDANCE 2025-26 AMBITIONS c.10bn2 Net revenue c.24bn calendar year Sustainable Growth Clean Net c.10bn distributions EPS, DPS Strong growth Profit1 o/w Cost of Risk <2
Slide 28: Ushering in a new era of UniCredit Unlocked
Ushering in a new era of UniCredit Unlocked 15th consecutive quarter of profitable growth: record third quarter and nine-month results Transformed bank, moved from retrenchment 1 Set a clear vision, distinctive culture and winning strategy, our progressive transformation allowed us to become leaders
Slide 29: Annex
Annex 29
Slide 30: Exceeding our ESG and related commitments
Exceeding our ESG and related commitments Leading by example to support our clients in a just and fair transition al LEAD BY EXAMPLE CLIENTS DIVERSITY & INCLUSION ACCOUNTABILITY Member of Net Zero Banking Focus on ESG share over total business nt G Group Executive Committee: ESG representation at Al
Slide 31: Group P&L and selected metrics
Group P&L and selected metrics All figures in bn unless otherwise stated 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 9M23 9M24 Revenue 5.9 6.0 6.0 6.0 6.4 6.3 6.1 17.9 18.8 o/w Net interest income 3.3 3.5 3.6 3.6 3.6 3.6 3.6 10.4 10.7 o/w Fees 2.0 1.9 1.8 1.8 2.1 2.1 1.9 5.8 6.2 Costs -2.3 -2.3 -2.3 -2.5 -2.
Slide 32: Updated base case macro scenario
Updated base case macro scenario Scenarios 2024, 2025, 2026 EUROZONE UNICREDIT FOOTPRINT Group Group excl. Russia 2024 2.4 0.7 2024 3.3 1.1 2.2 0.5 2025 1.8 1.1 2025 2.7 1.1 2.0 1.3 2026 1.9 1.4 2026 2.4 1.6 2.0 1.6 Inflation,% ◼ GDP growth, % Estimates based on UniCredit Research data GDP growth
Slide 33: Balance sheet and liquidity profile
Balance sheet and liquidity profile (€bn) LIQUIDITY PROFILE Cash and cash balances 38 3Q24 26 43 Other liabilities Other Assets 39 Financial liabilities & hedging liabilities Balance 64 Equity and equity instruments LCR c.140% Financial Assets at Amortised Cost 90 Sheet NSFR >125% Sound and stable 8
Slide 34: Deposit details
Deposit details Deposits from customers (Net of repos and IC - EoP) 458bn (-1.4% Q/Q) 3Q24 avg commercial deposits, bn vs 2Q24 Gross customer deposits rates 3Q24 (vs 2Q24) Italy 180 -0.53% Italy -0.4% (+5bps) Germany By Central Europe region Eastern Europe -1.77% Russia Germany 127 -2.4% (+11bps) Ce
Slide 35: Loan details
Loan details Loans to customers (Net of repos and IC - EoP) 403bn (-0.8% Q/Q) 3Q24 avg gross commercial performing loans, bn vs 2Q24 Gross customer performing loan rates 3Q24 (vs 2Q24) Italy Italy 144 -0.2% 4.74% Germany (-10bps) By Central Europe region Eastern Europe Germany 108 -2.1% 3.89% (-8bps
Slide 36: Total Financial Assets
Total Financial Assets 14 13 TFAs1, bn TFAs DYNAMICS 13 9 8 9 AuM+AuA gross sales 8 + 7% 3 2 2 3 3 2 2 Insurance gross sales 759 757 781 796 800 808 751 TFA evolution 136 138 142 808 126 127 126 130 AuM 757 quarterly 12 13 13 14 15 18 20 165 172 170 187 199 199 204 AuA 57 57 56 57 58 58 58 AuC Insur
Slide 37: Asset quality details
Asset quality details TOTAL GROSS NPE TOTAL GROSS NPE ALMOST STABLE KEY HIGHLIGHTS 12.6 − 44% Gross NPE evolution 12.1 12.0 11.7 12.1 11.7 11.8 NPE COVERAGE RATIO Stable Q/Q at 47% on book by quarter, bn 21.2 Gross Past Due Gross Bad Loans SOUND LEVEL OF Gross UTP PROVISIONS NPE coverage does not 1Q
Slide 38: Group gross loans breakdown by stages
Group gross loans breakdown by stages o/w Gross NPE GROUP GROSS LOANS1 AND PROVISIONS EOP, bn 2.7% 2.7% 2.7% 2.6% 2.7% Stage 3 447 445 444 48.1% 47.2% 45.5% 47.2% 47.0% 440 441 Stage 3 12 12 12 12 12 62 52 51 Stage 2 79 76 o/w Stage 2 17.6% 17.2% 14.0% 11.7% 11.6% o/w Gross performing loans Stage 1
Slide 39: RWA details
RWA details RWA, bn CONTINUED RWA EFFICIENCIES RWA evolution by quarter 299 295 290 − 4% 285 280 277 278 Market risk Operational risk 290 Credit risk 278 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Q/Q EVOLUTION DETAILS, bn Y/Y EVOLUTION DETAILS, bn Mainly driven by o/w -2.2bn strategic investment Including
Slide 40: End notes
End notes 40
Slide 41: Disclaimer
Disclaimer This presentation may contain “forward-looking statements” which includes all offer or solicitation would be unlawful (the “Other Countries”), and there will be no statements that do not relate solely to historical or current facts and which are therefore public offer of any such securiti
Slide 42: General notes related to this presentation
General notes related to this presentation 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 rounding Russia includes the local bank and lega
Slide 43: Main definitions
Main definitions Allocated Capital Calculated as 13.0% of RWA plus deductions CAFR Current Account Fee Reduction in Italy Clients Clients that made at least one transaction in the last three months Cost of risk Based on reclassified P&L and Balance sheet, calculated as (i) LLPs of the period annuali
Slide 44: Main definitions
Main definitions HQLA Assets which can be easily and immediately converted into cash at little or no loss of value even in periods of severe idiosyncratic and market High-Quality Liquid Assets stress. These assets are unencumbered, which means free of legal, regulatory, contractual, or other restric
Slide 45: Main definitions
Main definitions PD scenario Impacts deriving from probability of default scenario, including rating dynamics RoAC Annualized ratio between (i) Net profit after AT1/Cashes minus excess capital charge (where applicable) and (ii) average allocated capital, both as defined above RoTE (i) Annualized Net
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