Unicredit S.p.a. · MIL:UCG
Unicredit — 2013 EBRD Annual Meeting
32 slides from Unicredit's conference presentation, May 10, 2013
Slide 1: CEE Region: rediscover the way to go
CEE Region: rediscover the way to go Gianni Franco Papa, Head of CEE Division Aurelio Maccario, Head of Group Strategic Planning 2013 EBRD Annual Meeting - Istanbul, May 10th 2013
Slide 2: Key findings
Key findings Catch-up potential in the CEE Region remains significant, GDP per capita is still roughly one third of the euro-area average. Enhancement of competitiveness indicators may only strengthen the growth path of the Region, which however is already ahead of LATAM. Foreign capital played
Slide 3: Agenda
Agenda Economic developments – still a solid growth potential Credit dynamics – growth maintained, supply improving UniCredit in CEE – leadership and commitment
Slide 4: Long term potential of the CEE Region is intact
Long term potential of the CEE Region is intact. The “convergence” story continues to hold, with improvement in infrastructure and institutional environment to be supportive GDP per capita in PPP Competitiveness of Infrastructure and Institutions* CEE-16 Infrastructure Institutions Euro area (12 cou
Slide 5: Room for improvement in labour productivity and competitiveness
Room for improvement in labour productivity (especially in some countries) as well as in competitiveness indicators highlights the catch-up potential. However, CEE already ahead of the LATAM Region Productivity and Unit Labour cost, 2012 Global Competitiveness Index and Index, 2005=100 Ease of Doing
Slide 6: Differentiation across countries in ease of doing business
Differentiation across countries is clearly visible in ease of doing business as well as in corruption perception. Getting credit looks to be relatively easy, while others, from construction to insolvency resolution, deserve more attention Ease of Doing Business (red) and Components of Ease of Doing
Slide 7: EU / EMU entry to boost business environment
The EU / EMU entry to give further boost to improving the business environment of the Region in the coming years CEE Countries EU and EMU membership - status quo and perspectives EE 10 countries within the CEE LV EMU: 2014 Region are already members of RU the European Union… LT EMU: 2015 …with C
Slide 8: FDI flows to CEE projected to increase gradually
After collapsing in the past few years, FDI flows to CEE are projected to increase gradually, comprising more sustainable projects Net FDI flows in CEE (EUR bn) Net FDI flows by country 114 116 Net FDI - % of GDP Net FDI - EUR bn 25 2012 2013 2012 2013 33 Bulgaria 3.1 3.9 1.2 1.6 21 77 Bosnia-Herzeg
Slide 9: External trade to remain a key driver of CEE economies
External trade to remain a key driver of CEE countries’ economic performance, though close links with WE represent a source of vulnerability, at least for some of them. Russia and China among the top 5 trading partners CEE Trade Flows Export and Import relative to GDP Share of trade with EU-27 CEE m
Slide 10: CEE GDP growth outpacing WE countries
CEE GDP growth outpacing WE countries reflects the long-term potential of the Region. Cross country differentiation remains visible, with some markets showing sluggish performance in the short term, but recovering over the longer horizon GDP growth: CEE vs WE countries, % CEE GDP growth, % CEE Turke
Slide 11: CEE GDP growth driven by exports and investments
CEE GDP growth will mainly be driven by exports and investments in the near term. Consumption to catch up gradually. In this respect, the Region is not homogenous either Growth drivers 2013-15, avg growth rate, % Growth drivers 2016-20, avg growth rate, % Consumption Investment Exports 9.5 7.1 7.1 7
Slide 12: Agenda
Agenda Economic developments – still a solid growth potential Credit dynamics – growth maintained, supply improving UniCredit in CEE – leadership and commitment
Slide 13: Credit standards and willingness to lend improving
Credit standards and willingness to lend improving, in general following dynamics in demand Emerging Europe Bank Lending Conditions, Change Over the Past Three Months Loans to commercial and industrial enterprises Residential real estate loans 67 75 Score of 50 = neutral Sharp deterioration 60 67 in
Slide 14: Lending growth to accelerate gradually
Lending growth to accelerate gradually supporting economic recovery. Corporate lending outpacing consumer loans in CE and SEE. Other countries, (Turkey and Russia) to outperform in retail lending Lending growth, CAGR 2013-15, % Lending growth, CAGR 2016-20, % Corporate Consumer Finance Housing 12.9
Slide 15: Lending penetration signals potential of corporate credit and bonds
Lending penetration signals the potential of bank credit to corporates and even more of corporate bonds Corporate loans penetration, % GDP, 2012 54 48 45 43 37 38 31 31 32 28 22 24 20 22 16 EMU PL RO CZ SK HU RU HR TK BH LV SRB UA BG SI Corporate bonds penetration, % GDP, 2012 10 9,8 9,2 7,8 3,8 2,4
Slide 16: SME to be a focal point of bank financing
Although one of the riskiest segments, SME to be one of the focal points of bank financing, considering the high relevance of this segment in CEE economies as well as SME’s reliance on bank credit SME, value added (% of GDP) and employment (1) SMEs preferences for sources of financing growth (2) 80%
Slide 17: Programs supporting CEE growth and SMEs
Several programs are in place to support CEE economic growth and SME segment in particular, with commercial banks playing a pivotal role Initiatives to support CEE economic growth Commercial Banks playing a pivotal role EU subsidized finance: EU subsidized finance: o In the period 2007-2013, EUR
Slide 18: EU financing a great part of funds available to CEE
Especially in the most recent years, EU financing has represented a great part of funds available to the CEE Region. The positive impact of these funds to the Region will increase if higher absorption rates are reached Relevance of EU-funding versus FDI in CEE*, EUR bn Absorption of EU funds by coun
Slide 19: Lending penetration of Retail
Lending penetration of Retail also signals the potential of bank credit to this segment Retail lending penetration, % GDP, 2012 40 Housing Consumer Finance* 27 20 21 19 19 19 15 15 14 13 13 14 12 12 12 11 9 9 10 9 8 6 6 6 3 4 1 EMU RU UA TK RO SRB BG HU SI SK HR PL CZ LV Note: EMU includes 17 countr
Slide 20: Retail market potential: deposits and internet banking
Retail market potential to be seen, not only in terms of lending opportunities, but also in terms of deposit gathering and using banking services, also through the internet banking Share of population with a bank account, % 97 93 90 88 81 80 73 70 62 58 56 53 48 45 41 SI EU 15 LV HR CZ SK HU PL SRB
Slide 21: FX lending in CEE and regulations
Prior to crisis cheaper FX lending expanded strongly in CEE, whilst the crisis brought stagnation. In some CEE economies, authorities introduced regulations limiting FX lending mainly to Retail. Future FX lending will be restrained Share of FX lending in CEE*, % Regulations on FX lending Ban of FX
Slide 22: Enhanced cooperation across banks, IFIs and regulators
Economic growth acceleration will likely stem from enhanced domestic competitiveness. Enhanced cooperation across banks, IFIs and regulators remains crucial to support this dynamic Governments / Regulators Commercial Banks International Financial Institutions 22
Slide 23: Agenda
Agenda Economic developments – still a solid growth potential Credit dynamics – growth maintained, supply improving UniCredit in CEE – leadership and commitment
Slide 24: UniCredit at a glance
UniCredit at a glance Rock-solid pan-European commercial bank Leadership positions in Austria, Germany, Italy and Poland. Strong presence in other high-growth CEE countries, including Turkey Strong presence in the top financial centers in the world, rounded off with a broad coverage including
Slide 25: UniCredit in CEE
UniCredit in CEE FIRST IN THE REGION IN TERMS OF NETWORK AND EXPERTISE PREFERRED PARTNER FOR LOCAL AND CROSS-BORDER BUSINESS With a clear understanding of the difficulties that come with managing a local business, we offer customers our deep knowledge of CEE markets. This includes expertise in loc
Slide 26: Our unrivalled network in CEE
Our unrivalled network in CEE Czech Republic Poland Latvia* 7% market share 11% market share 3% market share #4 1,042 branches #2 8 branches #8 103 branches Slovakia Russia 7% market share 2% market share 78 branches #5 #8 109 branches Hungary 6% market share Ukraine 122 bran
Slide 27: UniCredit commitment for growth via various initiatives
UniCredit commitment for growth via various initiatives #1 bank in the CEE Region*: with ~ € 56 bn loans and ~ € 42 bn deposits to/from Focus CIB customers on CEE with ~ € 35 bn loans and ~ € 41 bn deposits to/from Retail and PB customers Trends that matter: Focus on New branch and service mod
Slide 28: IFIs play a pivotal role in SME lending
International Financial Institutions play a pivotal role in UniCredit Group‘s SME lending activities FUNDING provided by IFIs are: Among the few instruments available to source medium / long term lending at very competitive conditions Competitively priced funding instrument in countries not ha
Slide 29: CEE Retail, Branch of the Future
CEE Retail, Branch of the Future: a new customer experience NOVELTIES Retail operating model is changing As a consequence, a new branch format has been designed on a new customer experience In particular: - High street retail look 'n feel – based on customer journey logic - Introduction of new techn
Slide 30: UniCredit professional support widely recognized
UniCredit professional support to its customers in CEE has been widely recognized Cash Management & eBanking Trade & Supply Chain Finance Best Trade Finance Bank CEE 2012 and 2013 Best Overall Bank for Cash Management in CEE Best Trade Finance Bank in Bulgaria in 2013, 2012 and 2013 Czech Repu
Slide 31: Disclaimer
Disclaimer Our recommendations are based on information obtained from, or are based upon public information sources that we consider to be reliable but for the completeness and accuracy of which we assume no liability. All estimates and opinions included in the report represent the independent judgm
Slide 32: Disclaimer (cont.)
Disclaimer (cont.) Notice to Austrian investors This document does not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any securities and neither this document nor any part of it shall form the basis of, or be relied on in connect