Slide 1: UniCredit Group Presentation to Fixed Income Investors
UniCredit Group Presentation to Fixed Income Investors March 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,
Slide 3: Agenda
Agenda Consolidated Results 4Q12 Annex 3
Slide 4: 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 af
Slide 5: 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 6: 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 7: Total Revenues
Total Revenues Revenues weakened due to bottoming interest rates and adverse macro and market conditions Revenues composition (mln) Revenues by Region (mln) Net of buy-back (1) Western Europe Net of buy-back(1) CEE & Poland 25,013 25,049 -5.6% +0.1% 6,048 6,078 25,013 25,049 6,048 6,078 5,709 Others
Slide 8: 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 9: 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 10: 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 11: 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 12: 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 13: 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 14: 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 15: 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 16: Asset quality
Asset quality Higher coverage in Italy in a still challenging environment; asset quality remained broadly stable in other countries Italy Germany Austria 52.2 54.9 56.7 9.4 8.4 8.3 8.4 8.4 4.5 4.6 4.7 5.0 44.0 48.1 4.2 Gross Impaired Loans (bn) Dec10 Dec11 Jun12 Sep12 Dec12 Dec10 Dec11 Jun12 Sep12 D
Slide 17: 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 18: 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 19: 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 20: 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 (immed
Slide 21: Capital
Capital RWA down q/q driven by a sharp reduction in Credit and Market RWA Group’s geographical diversification confirmed RWA, eop (bln) RWA composition, eop (%) 460.4 -2.2% 436.8 Operat. 51,5 427.1 52,4 Germany -2.2% 51,2 Market 31,5 Italy 25% 19,1 -9% 17,4 34% 376.8 365.3 Credit -1.8% 358.6 (1) 8%
Slide 22: 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 23: Capital
Capital Stable capital ratios benefiting from RWA dynamics Capital Ratios Core Tier I Ratio: QoQ evolution (%) Bis 2.5 Bis 2.5 Bis 2.5 +0.10% 10.84% +0.24% 10.67% -0.17% 14.52% 13.83% Total Capital 12.37% 11.26% 11.44% Tier I 9.32% Sept 12 Retained RWA Other Dec 12 earnings dynamics 10.67% +17bp 10.
Slide 24: Capital – Basel 3
Capital – Basel 3 Sound capital position with a 9.2% fully loaded ratio as of December 2012, 10.36% at the starting period of the phase in, before any earnings accrual CET1 Ratio fully-loaded at Dec. 12 2014-19 BIS3 Phase-in impact, not considering earnings’ accruals Cumulated 160 bps 164 bps 10.84%
Slide 25: 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 26: Italy Turnaround – Italian optimization portfolio
Italy Turnaround – Italian optimization portfolio A portion of the Italian loan portfolio has been identified for optimization through ad hoc risk mitigating strategies Net customer loans, bn Net Customer Loans, bn Expected RACE -8.3% 7.1 Loss, bn -60% -60% 45 45 Other Impaired Households 10 loans w
Slide 27: 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 28: Agenda
Agenda Consolidated Results 4Q12 Annex 28
Slide 29: P&L
P&L UniCredit closed 2012 with a 865 mln net profit 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 -14.0% -10.5% 9,582 10,070 5.