Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (April 2013)
35 slides from Unicredit's debt investor presentation, April 2013
Slide 1: UniCredit Group Presentation to Fixed Income Investors
UniCredit Group Presentation to Fixed Income Investors April 2013
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: Executive Summary
Executive Summary UniCredit – a strong investment proposition with a successfully strengthened Balance Sheet A well diversified pan-European bank with a leading market franchise in Italy, Germany, Austria and Central Eastern Europe Continued strengthening of our capital base (including a 7.5bn capit
Slide 4: Agenda
Agenda Introduction & Strategy Consolidated Results 4Q12 Annex 4
Slide 5: UniCredit at a glance
UniCredit at a glance A clear international profile based on a strong European identity UniCredit Highlights Shareholders’ Structure(1) Domestic Strong local roots in over 20 countries Institutional Investors Over 156,000 employees 3.4% Retail International About 9,400 branches 22.5% Institutional A
Slide 6: UniCredit in Europe
UniCredit in Europe About 33 million customers across Europe Unique positioning in mature markets and fast growing CEE economies RWA composition, eop (%) Italy Rank & Market Share #2 13.2% Loans (bn) 274.3 Direct Funding (bn) 225.9 FTE ('000) 60.4 Germany Germany 25% Italy Rank & Market Share #3 2.7
Slide 7: CEE Region: market leading franchise with a full coverage
CEE Region: market leading franchise with a full coverage Ranking, Employees and Branches by Country % Loans mkt share # 1 Franchise in CEE 10.1% ’sPoland #2 #2 Markets, Baltics, Baltics, #7 #8 #10 - #10 - 1.4% - 8.1% 19,231 employees 200 185 employees employees 1.7% CzechCzech Rep., Rep., #4 #4 Rus
Slide 8: Pillars of Strategic Plan 2013 – 2015
Pillars of Strategic Plan 2013 – 2015 How to achieve our strategic objectives Balance Sheet Simplification & Business Italy Structure Cost Management Refocusing Turnaround Capital Central Functions CIB: business New service model strengthening streamlining reshaping and run-off portfolio Improving a
Slide 9: Italy's Macro Picture 1/3
Italy’s Macro Picture 1/3 Despite negative GDP growth, Deficit and Debt to GDP ratio under control Third largest economy in Euro-zone; no housing sector bubble burst Deficit/GDP ratio is under control: 2012 stood at c. -3%, lower than the Euro-zone (-4.1%)(1) Primary budget surplus at 2.5%, higher t
Slide 10: Italy's Macro Picture 2/3
Italy’s Macro Picture 2/3 Total indebtedness is in line with France and Germany… …but primary balance even better Public 426 Non Financial Private 372 117 Debt / GDP (%)(1) 120 289 263 254 259 77 234 212 90 90 127 74 82 309 251 212 164 161 169 135 131 Ireland Portugal Spain Italy France Austria Germ
Slide 11: Italy's Macro Picture 3/3
Italy’s Macro Picture 3/3 Italian Trade Balance back to positive in 2012; Unemployment still under control compared to other peripheral countries 26.3 Unemployment Rate (%)(1) 17.5 14.2 11.6 12.0 10.8 5.4 4.8 Spain Portugal Ireland Italy France Germany Austria Euro area Italian Trade Balance 9.2 11.
Slide 12: Agenda
Agenda Introduction & Strategy Consolidated Results 4Q12 Annex 12
Slide 13: Executive Summary
Executive Summary Net Profit at 0.9 bn in FY12 while prudentially increasing coverage ratio in Italy; UniCredit well positioned to economic recovery FY12 Net Profit at 865 mln vs. 9,206 mln loss in FY11. Macro-driven decrease in revenues and conservative coverage enhancement provisioning policy affe
Slide 14: Net Profit and Net Operating Profit
Net Profit and Net Operating Profit Profitability mainly affected by impaired loans coverage enhancement actions NOP sustained by cost containment in a challenging environment Net Profit (mln) Net Operating Profit (3) (mln) Integration costs, one off non-cash Buy back (impacts before taxes) items an
Slide 15: Net Operating Profit Breakdown
Net Operating Profit Breakdown Revenues and LLP trends reflect the negative economic cycle Positive contribution to Net Operating Profit from effective cost management Net Operating Profit(1) Composition (mln) Net Operating Profit(1) by region (mln) Net of Buy Back(2) Western Europe CEE & Poland 3,8
Slide 16: Volumes
Volumes Direct Funding slightly decrease q/q due to market and institutional counterparties, mirroring the same trend on the loan side Customer loans (mln) Customer deposits (mln) -1.6% -2.1% +3.6% 558,709 -1.8% 555,946 547,144 395,288 417,048 409,514 Western 467.373 464.601 452.663 Western Europe -
Slide 17: Operating Costs
Operating Costs Group efforts paid off with another quarter of decrease, despite renewed investments in CEE&Poland Total Operating Costs (mln) Total Operating Costs by Region (mln) Net of buy-back(1) Western Europe -2.7% CEE & Poland -2.9% -1.1% 3,786 3,724 3,685 15,431 14,979 3,786 3,724 15,431 3,6
Slide 18: FTEs
FTEs Staff reduction continued this quarter both in Western Europe, primarily driven by Italy and Germany, and in CEE&Poland FTEs(1) (unit) FTEs by Region (unit) -4,006 -837 Western Europe 160,360 157,190 CEE & Poland 156,354 160,360 157,190 156,354 Business 124.287 121.970 -928 121.042 Divisions 92
Slide 19: Cost management actions
Cost management actions NPV of 1.8 bn of savings from cost management efforts thanks to several projects Integration Actions NPV costs in 4Q12(1) 350 branches closing (2) Italy HR actions offset impact of ~860 mln 119 mln pension reform Corporate Center optimization Germany ~270 mln 90 mln and Netwo
Slide 20: Cost of Risk
Cost of Risk Significant efforts to enhance coverage in Italy Loan Loss Provisions (mln) – Group COR (bps) Cost of Risk (bps) Western Europe 4Q11 3Q12 4Q12 CEE & Poland 466 270 9,613 163 132 138 108 119 119 4,608 83 5,733 8,558 CIB F&SME CEE 4,277 545 1,776 4,834 1,420 188 1,525 151 1,165 139 118 10
Slide 21: Group Asset Quality
Group Asset Quality Conservative approach boosted coverage ratio leading to an overall stable net impaired loans ratio in the quarter despite shrinking volumes NPLs (bn) +2.0% 40.4 43.5 44.4 Gross Impaired Loans (bn) +2.6% 77.8 79.8 69.8 Dec. 11 Sept. 12 Dec. 12 Coverage ratio 57.2% 55.6% 56.4% Othe
Slide 22: Asset Quality in Italy
Asset Quality in Italy Sizeable provisions helped to enhance coverage across all categories and reduce net stocks, against a difficult economic back drop NPLs (bn) +2.7% Gross Impaired Loans (bn) 27.2 30.1 31.0 +3.2% 54.9 56.7 48.1 Dec. 11 Sept. 12 Dec. 12 Coverage ratio 56.2% 53.7% 56.0% Other Impa
Slide 23: Asset Quality in Italy
Asset Quality in Italy Collateral and guarantee values exceed the net value of Gross Impaired Loans, leading to a 140% coverage ratio Group Impaired Loans, bn 24.6 1.5 56.7 30.5 42.6 12.1 Gross Specific Generic Net Value Collateral and Over- Impaired Provisions Reserve Guarantee collateralization Lo
Slide 24: Balance Sheet structure
Balance Sheet structure Total assets down due to lower loans to banks and to customers Leverage ratio keeps reducing thanks to the growth in Tangible Equity Total Assets (bn) Tang. Shareholders’ Equity(1) (bn) Leverage Ratio(2) +1.5% TE per share (eur) 8.1 -2.4% -4.9x 938,6 949,8 926,8 46,9 47,1 22.
Slide 25: Balance Sheet structure
Balance Sheet structure Securities in issue up due to the significant funding activity in the last quarter of 2012 Securities in issue (bn) Net Interbank Position (bn) Financial investments(1) (bn) +6.5 bn +2% 108,7 99,2 99,5 102,2 +5.8 bn 162 162 165 170 Wholesale 97 90 89 95 -40,5 -43,0 Customers
Slide 26: Medium-Long Term Funding Plan
Medium-Long Term Funding Plan 2012 Funding Plan above target: high quality and diversified issuances Funding Mix % of m/l term run-offs by Region(1) 34.7 bn 29 bn 28.5 Germany Austria 26.3 30% 25.8 19% 19% 7% Italy 48% 8% 5% Poland 51% 54% 9% 11% Germany 33% 34% 35% 27% 57% Italy Austria 19% 19% 201
Slide 27: Liquidity
Liquidity Sound position: 1Y Liquidity buffer exceeds wholesale funding maturing within one year Liquidity buffer (12 months) as of December 2012 (bn)(1) 170.1 Additional eligible assets 21.3 available within 12 months Cash and Deposits 42.3 with Central Banks 148.8 Unencumbered assets 106.4 (immedi
Slide 28: Capital
Capital RWA down q/q driven by a sharp reduction in Credit and Market RWA Leverage ratio amongst the lowest in the sector RWA, eop (bln) LEVERAGE RATIO FY2012(2) 50.0 460.4 -2.2% 28.6 436.8 26.4 26.4 Operat. 51.5 427.1 23.3 52.4 21.9 -2.2% 51.2 Market 31.5 19.1 18.6 -9% 17.9 18.0 17.4 15.7 376.8 365
Slide 29: Capital – CIB RWA development
Capital – CIB RWA development Massive de-leveraging continued also in 2012 -36.0 bn -53 bn before Basel 2.5 impact +17.0 -20.6 198.6 -12.6 -13.1 -6.6 -0.1 162.6 2011: -3.6 bn 2012: -32.4 bn Dec. 2010 Basel 2.5 De-leveraging Ring-fenced Volume Market risk Other Dec. 2012 Portfolio dynamics % on Total
Slide 30: Capital
Capital Stable capital ratios benefiting from RWA dynamics Capital Ratios Basel 2.5 CET1 Ratio Basel 3 fully-loaded at Dec 12 14.52% 13.83% 11.26% 11.44% 10.84% Total Capital 12.37% -0.96% Tier I 9.32% -0.68% 9.20% 10.67% +17bp 10. 84% -4.1 31.4 Core Tier I 8.40% Dec 11 Sep 12 Dec 12 CT 1 Deductions
Slide 31: Capital – Active management of Group asset portfolio
Capital – Active management of Group asset portfolio Business re-focusing in CEE Ongoing capital optimization within the Group continues Rationalization of the CEE Presence Merger of Russia: Sales Merger of 2 Baltic Russia: JV Slovakian bank Exit from Sale of Yapi of non-core banks in countries with
Slide 32: Outlook
Outlook Given the current economic environment, the Strategic Plan financial targets will be revised. The underlying set of actions are confirmed 2013 2012 Comments outlook Interest rates bottoming out Management actions (e.g. asset repricing and product re-mix) Net interest 14,285 mln New MLT fundi
Slide 33: Agenda
Agenda Introduction & Strategy Consolidated Results 4Q12 Annex 33
Slide 34: Group Profit & Loss and main KPIs
Group Profit & Loss and main KPIs Good profitability but still significant upside q/q y/y y/y 4Q11 3Q12 4Q12 FY11 FY12 % % % Total Revenues 6,048 6,078 5,709 -6.1% -5.6% 25,013 25,049 0.1% Operating Costs -3,786 -3,724 -3,685 -1.1% -2.7% -15,431 -14,979 -2.9% Gross Operating Profit 2,262 2,354 2,024
Slide 35: UniCredit Ratings Overview
UniCredit Ratings Overview UniCredit’s excellent diversification is a key rating strength, but the tough operating environment and Eurozone sovereign crisis are key concerns – UC SpA is currently constrained by Italy’s ratings, but German and Austrian subsidiaries are rated higher Ratings Comments L
UniCredit Group — Debt Investor Presentation (April 2013) on 6ix