Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (May 2014)
35 slides from Unicredit's debt investor presentation, May 2014
Slide 1: UniCredit Group: 1Q14 Results, Presentation to Fixed Income Investors
UniCredit Group: 1Q14 Results Presentation to Fixed Income Investors May 2014
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: UniCredit at a glance
UniCredit at a glance A clear international profile based on a strong European identity UniCredit Highlights Shareholders’ Structure(1) Domestic Institutional Investors Strong local roots in almost 20 countries 2.2% Retail Around 131,000 employees International 21.6% Institutional 35.4% Investor
Slide 4: A new strategic agenda
A new strategic agenda UCG journey towards sustainable profitability 2008-2010 2010-2013 2013-2018 PREVIOUS PLAN: NEW PLAN: FACING THE CRISIS STRENGTHENING ACCELERATING THE JOURNEY TOWARDS FUNDAMENTALS SUSTAINABLE PROFITABILITY AMBITION Capital shortage Balance sheet 13 restructuring UCG Cost of
Slide 5: Financial targets
Financial targets The Group overall will benefit from a very solid balance sheet strategy GROUP AVERAGE DIVIDEND PAYOUT RATIO OF 40% (1)Excluding effects related to relevant buy-backs, restructuring costs, goodwill and PPA impairments, Ukraine evaluation under IFRS5, gain on Bank of Italy stake, cha
Slide 6: Agenda
Agenda Group Core Bank Non Core Annex 6
Slide 7: 1Q14 Results: Executive Summary
1Q14 Results: Executive Summary Core Bank net profit at 1 bn thanks to solid contribution of Commercial Bank Italy. Non Core assets further down. CET1 ratio at 9.5% fully loaded Net profit at 712 mln at Group level, implying a 7% RoTE, a remarkable step towards the 2 bn 2014 target The Core Bank
Slide 8: Group - Results
Group - Results A strong 712 mln in 1Q14 is a remarkable step to achieve the 2 bn target net profit by the end of the year, while maintaining a prudent risk approach Total Assets, bn Tangible Equity, bn -5.7% -10.4% +1.7% +1.8% 893 870 865 828 842 47.0 46.1 46.2 41.4 42.1 Net Profit, mln Mar. ’13 Ju
Slide 9: Group Asset Quality
Group Asset Quality Stock down for the first time since the inception of the crisis in 2008 Solid coverage ratio on impaired loans at over 52% (63% on NPLs) Gross impaired loans (bn) NPLs (bn) -1.3% +0.4% 81.1 83.6 82.5 45.7 49.1 49.2 Mar. 13 Dec. 13 Mar. 14 Coverage Mar. 13 Dec. 13 Mar. 14 ratio 56
Slide 10: Group Asset Quality in Italy
Group Asset Quality in Italy Improving new flows trend vs market confirmed also in 2014. The sale of vintage NPLs for 1.1 bn had a 60 bps impact on coverage ratio and positive P&L effect Impaired loans y/y growth, % 40% 30% 20% ABI Sample(1) 10% UCG Italy 0% Dec- Jun- Dec- Jun- Dec- Jun- Dec- Mar- 1
Slide 11: Group - Capital
Group - Capital CET1 ratio fully loaded increasing to 9.5% First Italian bank to issue a CRD IV compliant AT1 instrument Basel 3 - Common Equity Tier I ratio: q/q evolution (basis points) +44 bp 9.91% +17 bp -4 bp 9.47% 9.36% -22 bp +25 bp -3 bp +10 bp -12 bp Dec.13 RWAs Shortfall AFS FX Reserve Low
Slide 12: Medium-Long Term funding plan
Medium-Long Term funding plan Around 42% of the funding plan already realized (45% in Italy) UniCredit repaid 10 out of 26 bn LTRO Funding Mix, managerial data % of m/l term run offs by Region(1) 30.4 bn 31.5 bn 13.4 bn 13.4 bn % M/L TERM Network run-offs(2) 27% 24% 22.7bn 27.0 bn 33.5 bn 10% Italy
Slide 13: Very strong liquidity position
Very strong liquidity position 1-year liquidity buffer exceeds 12m wholesale funding Liquidity buffer (12 months) as of March 2014 (bn) (1) 162 Additional eligible assets 27 available within 12 months Cash and Deposits 26 with Central Banks Unencumbered assets 135 109 (immediately available) Liquidi
Slide 14: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access Strong debt market franchise confirmed Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 7Y Sen (1,250) 3Y Sen (1.250) 5.5Y 2Y 12nc7 5Y 10Y OBG Senior LTII Sen OBG (1,000) (750) (1.000) (500) (1.000) 7Y AT1 10Y 7Y 5Y Sen 3Y Sen Unicredit OBG (1000) (1.2
Slide 15: USD 1.25bn PERPNC2024 Additional Tier 1
USD 1.25bn PERPNC2024 Additional Tier 1 First AT1 deal from an Italian bank with an orderbook of over USD 8bn USD 1.25bn PERPNC2024 Additional Tier 1 Investor and geographical distribution (allocated) Issuer UniCredit Spa 7% 5% 5% 9% 3% Issue Size USD 1.25 bn 8% 39% 10% Maturity Date Perpetual 12% C
Slide 16: Agenda
Agenda Group Core Bank Non Core Annex 16
Slide 17: Core Bank – Net Profit
Core Bank – Net Profit The Core Bank started 2014 with 1 bn net profit, mostly driven by the Commercial Bank Italy, CIB and CEE. All divisions closed the quarter with profits Net Profit, mln Divisional Breakdown – 1Q14 Net Profit, mln RoAC CB Italy 496 +27.5% +12.1% n.m. 978 1,001 CB Germany 115 +16
Slide 18: Core Bank - Net Operating Profit breakdown
Core Bank - Net Operating Profit breakdown Fast rebound in NOP after non-recurring items in 4Q13, driven by Cost and Loan Loss Provisions. Revenues held up well Revenues, mln -1.5% -2.5% 5,571 5,895 5,527 5,630 5,487 Net Operating Profit, mln 1Q13 2Q13 3Q13 4Q13 1Q14 Costs, mln -0.7% -1.9% n.m. -7.2
Slide 19: Core Bank – Total revenues
Core Bank – Total revenues Net interest growing y/y (and q/q net of the two days less in 1Q). Positive trend in fees and commissions confirmed. Turkey impacted by lower AFS gains Net interest, mln Net Fees and Commissions, mln +3.5% +1.5% -0.9% +2.7% 2,930 2,959 2,944 3,060 3,032 1,802 1,741 1,724 1
Slide 20: Core Bank – Net interest
Core Bank – Net interest Net interest increased by 2.9% q/q net of FX and methodological changes Positive repricing effect offset loan volumes still affecting the trend Net interest bridge q/q (mln) +2.9% 3,060 3,032 -75 -6 -2 +56 -39 2,946 -34 +77 -5 4Q13 FX and Methodological 4Q13 Loans Deposits L
Slide 21: Core Bank – Customer Loans
Core Bank – Customer Loans Customer Loans held up thanks to Institutional and Market Counterparts Divisional Breakdown – Customer Loans, bn Customer Loans, bn q/q y/y -3.8% CB Italy 131.8 +0.7% -2.6% +0.3% 449.5 447.4 443.4 431.0 432.5 CB Germany 76.6 -0.3% -3.3% CB Austria 43.3 -0.5% -2.3% Poland 2
Slide 22: Core Bank – Direct Funding
Core Bank – Direct Funding Also on the direct funding side the Institutional and Market Counterparts contribution increased, whereas CEE and Poland declined partially due to FX Divisional Breakdown – Direct Funding, bn Customer Direct Funding, bn q/q y/y -0.3% CB Italy 147.8 -1.6% -5.6% 0.0% 451.9 4
Slide 23: Core Bank – Customer Rates
Core Bank – Customer Rates Improving margins thanks to the ongoing repricing on deposits and in this quarter also positive contribution from customer lending rate Lending customer rate, % (managerial figures) Deposits customer rate, % (managerial figures) -4 bps +6 bps -35 bps 3.86% 3.78% 3.76% 3.76
Slide 24: Core Bank – New origination in Italy
Core Bank – New origination in Italy The remarkable increase in new origination in Italy is a tangible sign that the Group is ready to redeploy capital and funding in new healthy business Household mortgages new flows, mln Personal loans new flows, mln +7.5% +153% 755 627 583 598 575 513 457 298 371
Slide 25: Core Bank – Loan Loss Provisions
Core Bank – Loan Loss Provisions CoR dropped to 48 bps with CIB posting no writedowns and Commercial Bank Italy and CEE dropping after the additional LLP in 4Q13 Divisional Breakdown – 1Q14 Cost of Risk, bps Loan Loss Provisions, mln q/q y/y -1.5% CB Italy 85 -141bp +44bp -73.7% 1,990 CB Germany 8 -
Slide 26: Agenda
Agenda Group Core Bank Non Core Annex 26
Slide 27: Non Core – Gross Customer Loans
Non Core – Gross Customer Loans Gross exposure dropped by 2.0 bn in 1Q14 mostly driven by 1.7 bn reduction in Special Network Leasing Non Core, bn Special Network, bn -10.5% -9.1% -1.6% -2.7% Gross Customer Loans, bn 11.4 11.0 10.7 67.4 65.6 64.4 62.9 10.3 10.2 61.2 -9.0% (-8.3 bn) -2.3% (-2.0 bn) 9
Slide 28: Non Core – Asset Quality
Non Core – Asset Quality Reduction in total gross impaired loans while maintaining a solid coverage ratio NPLs, bn Doubtful Loans, bn +10.4% +3.1% +0.4% -1.8% 32.1 35.3 35.5 17.5 18.4 18.0 Total Gross Impaired Loans, bn Mar. 13 Dec. 13 Mar. 14 Mar. 13 Dec. 13 Mar. 14 +2.5% -1.5% 56,5% 64,4% 63,4% 32
Slide 29: Non Core – Results
Non Core – Results The drop in provisioning after the efforts made in 4Q13 explain the lower loss in the quarter. The drop in revenues is driven by lower interest accruals Revenues, mln Costs, mln -0.1% -57.4% +14.3% 214 -35.1% 173 173 204 152 143 135 140 121 91 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q
Slide 30: Concluding Remarks
Concluding Remarks Sizeable 1 bn net profit in the Core Bank and 12% RoAC Strong progression in Commercial Bank Italy: 0.5 bn net profit and 27% RoAC New lending in Italy revamped in 1Q14 with 2.7 bn new MLT business Asset quality improving with impaired loans down for the first time since t
Slide 31: Agenda
Agenda Group Core Bank Non Core Annex 31
Slide 32: Group – P&L and Volumes
Group – P&L and Volumes Back to profit with a strong 7% RoTE Euro (mln) 1Q13 2Q13 3Q13 4Q13 1Q14 ∆ % vs. ∆ % vs. 4Q13 1Q13 Total Revenues 5.785 6.099 5.662 5.770 5.578 -3,3% ▼ -3,6% ▼ Operating Costs -3.576 -3.484 -3.447 -3.746 -3.510 -6,3% ▼ -1,8% ▼ Gross Operating Profit 2.209 2.615 2.215 2.024 2.
Slide 33: Core Bank – P&L and Volumes
Core Bank – P&L and Volumes Back to profit after exceptional loss in 4Q13, with a remarkable 12% RoAC Significant improvement in terms of Cost / Income ratio Euro (mln) 1Q13 2Q13 3Q13 4Q13 1Q14 ∆ % vs. ∆ % vs. 4Q13 1Q13 Total Revenues 5.571 5.895 5.527 5.630 5.487 -2,5% ▼ -1,5% ▼ Operating Costs -3.
Slide 34: Non Core – P&L and Volumes
Non Core – P&L and Volumes Net loss reduced after the exceptionally high LLP in 4Q Customer loans down 2% q/q and 21% y/y in line with Strategic Plan targets Euro (mln) 1Q13 2Q13 3Q13 4Q13 1Q14 ∆ % vs. ∆ % vs. 4Q13 1Q13 Total Revenues 214 204 135 140 91 -35,1% ▼ -57,4% ▼ Operating Costs -173 -121 -1
Slide 35: Ratings Overview
Ratings Overview All senior ratings of UniCredit SpA were confirmed recently Issuer Ratings(1) Recent actions and key individual rating drivers Italy BBB/Neg/A2 UC SpA affirmed on the 24th March as S&P believes that the impact of the full-year-2013 results on the capital position is manageable and