Unicredit S.p.a. · MIL:UCG

Unicredit — Debt Investor Presentation (February 2018)

30 slides from Unicredit's debt investor presentation, Feb 15, 2018

  1. Slide 1: Fixed Income Presentation

    Fixed Income Presentation Milan, 15 February 2018

  2. 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

  3. Slide 3: Agenda

    Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 4Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 3

  4. Slide 4: Strong underlying performance supporting Transform 2019 – All first year targets achieved

    Strong underlying performance supporting Transform 2019 – All first year targets achieved 1 2 3 4 5 6 UniCredit at a glance Group underlying financial performance strong with net operating profit at 5.7bn up 74% FY/FY. Adjusted net profit(1) of 3.7bn. FY17 adjusted RoTE(1) at 7.2%. FY19 RoTE target

  5. Slide 5: UniCredit: a simple successful Pan European Commercial Bank with inherent competitive advantages

    UniCredit: a simple successful Pan European Commercial Bank with inherent competitive advantages and CIB fully plugged-in 1 2 3 4 5 6 UniCredit at a glance 25.9 million clients(1) Commercial Banking model delivering unique Western, Central and Eastern 80% revenues from European network to extensive

  6. Slide 6: Strong competitive advantage across countries and products

    Strong competitive advantage across countries and products 1 2 3 4 5 6 UniCredit at a glance Strong local "Go to" bank for European "Mittelstand" Best-in-class Commercial Banks Corporates CIB product provider # clients, m(1) Rank by assets in Loans to corporates in EU zone, €bn(4) EMEA rankings(5) E

  7. Slide 7: Transform 2019 update

    Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 4Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7

  8. Slide 8: UniCredit key targets

    UniCredit key targets 1 2 3 4 5 6 Transform 2019 update 2015 4Q17 FY17 2018 2019 Revenues, €bn 20.4 4.8 19.6 20.1 20.6 Cost, €bn -12.2 -2.8 -11.4 -11.0 -10.6 Net Income, €bn 1.5 0.8 5.5 4.7 Cost/income 60.0% 57.7% 57.9% <55% <52% Cost of Risk 103bps 69bps 58bps 68bps 55bps (1) (1) RoTE 4% 5.5% 7.2%

  9. Slide 9: Transform 2019 achievements (1/2)

    Transform 2019 achievements (1/2) 1 2 3 4 5 6 Transform 2019 update 5 Strategic Pillars Achieved 2019 Target  13bn rights issue, Pioneer and Pekao disposals completed  CET1 ratio at 13.02% pro forma of IFRS9(1) and STRENGTHEN AND • Bold actions taken: disposals of Pioneer, FINO(2) OPTIMIZE CAPITAL

  10. Slide 10: Transform 2019 achievements (2/2)

    Transform 2019 achievements (2/2) 1 2 3 4 5 6 Transform 2019 update 5 Strategic Pillars Achieved 2019 Target  682 branch closures since December 2015 in TRANSFORM • Transformation of operating model to a C/I ratio <52% (costs 10.6bn) Western Europe, 72% of 944 2019 target OPERATING sustainable lowe

  11. Slide 11: 4Q17 P&L results

    Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 4Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 11

  12. Slide 12: Group – Net operating profit up 73.7% FY/FY

    Group – Net operating profit up 73.7% FY/FY thanks to strong underlying commercial performance and strict cost and risk discipline 1 2 3 4 5 6 4Q17 P&L results Main drivers Data in m FY16 adj. FY17 ∆ % vs. FY16 adj. 4Q16 adj. 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 adj. • Resilient NII at 10.3bn in FY17

  13. Slide 13: Group Core – FY17 adjusted net profit 4.4bn, adjusted RoTE of 9.1%

    Group Core(1) – FY17 adjusted net profit 4.4bn, adjusted RoTE of 9.1% Gross NPE ratio at 4.9%, down 73bps Y/Y 1 2 3 4 5 6 4Q17 P&L results Main drivers Data in m FY16 adj. FY17 ∆ % vs. FY16 4Q16 adj. 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 adj. Total revenues 19,567 19,770 +1.0% 4,640 4,674 4,876 +4.3%

  14. Slide 14: Group – Resilient 4Q17 net interest, fees up 12.3% Y/Y

    Group – Resilient 4Q17 net interest mainly thanks to lower funding costs Fees up 12.3% Y/Y 1 2 3 4 5 6 4Q17 P&L results Net Interest, m Fees & commissions, m 7.1% 6,708 -0.1% 6,263 10,307 10,299 Average 2,792 Euribor 3M 2,411 +7.0% Investment fees -0.33% +12.3% 3.3% Financing fees (flat Q/Q) 1,768 1

  15. Slide 15: Group – Trading income up 3.5% FY/FY; Dividends

    Group – Trading income up 3.5% FY/FY, client activity picking up in 4Q17 1 2 3 4 5 6 4Q17 P&L results Trading income, m Dividends(1), m +3.5% Client driven Other dividends and Turkey (at equity) equity investments 1,818 Other trading 1,756 -21.9% 817 638 1,321 -16.4% 1,422 439 -19.1% +0.8% 327 -27.5

  16. Slide 16: Group – Costs 4.0% lower FY/FY, ahead of schedule

    Group – Costs 4.0% lower FY/FY, ahead of schedule FY18 11.0bn and FY19 10.6bn total cost targets confirmed 1 2 3 4 5 6 4Q17 P&L results Main drivers Costs, m FTEs (EoP) -6,352 • Execution of Transform 2019 progressing well: -2,113 Q/Q  64% of FTE reduction target -4.0% 98,304 94,066 91,952 achieved

  17. Slide 17: Group – FY17 CoR of 58bps in line with guidance

    Group – FY17 CoR of 58bps in line with guidance. 4Q17 CoR of 69bps driven by models impact 1 2 3 4 5 6 4Q17 P&L results Main drivers(1) Loan loss provisions, m • FY17 LLPs down 38.1% FY/FY to 2,605m, with CoR at -38.1% 58bps, of which 5bps impact from models 4,207 -48.1% • Group gross NPE ratio down

  18. Slide 18: Group – FY17 3.7bn adjusted Group net profit

    Group – FY17 3.7bn adjusted Group net profit Very good performance across all business divisions 1 2 3 4 5 6 4Q17 P&L results Net profit, m Net profit by division FY17, m 3.7bn adjusted(1) RoAC(2) CB Italy 1,231 12% 5,473 838m adjusted(1) CB Germany 639 14% 708m adjusted(1) 2,820 CB Austria 557 20%

  19. Slide 19: Asset quality

    Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 4Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 19

  20. Slide 20: NPEs deleveraging plan on track and further reduced in 2019

    NPEs deleveraging plan on track and further reduced in 2019 thanks to proactive actions in Non Core 1 2 3 4 5 6 Asset quality Non Core evolution Actions of Non Core run down Gross Loans, Gross loans, €bn -26.5 Sep16-Dec17 Dec17-Dec19 €bn 56.3 2.0bn lower FINO FINO phase 2 closed in Jan 2018 -17.0 6.

  21. Slide 21: Group – Asset quality further improved in the quarter

    Group – Asset quality further improved in the quarter with lower NPE, improved NPE ratios and strengthened coverage ratios 1 2 3 4 5 6 Asset quality Non performing exposures, bn o.w. Gross bad loans, bn -51.93% -46.10% -44.5% -35.3% 50.1 27.8 24.1 74.8 Net bad 19.3 9.5 <8.6 loans 48.4 3Q16 4Q17 2019

  22. Slide 22: Capital position

    Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 4Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 22

  23. Slide 23: Group – Transitional ratios well above MDA levels

    Group – Transitional ratios well above MDA levels SREP Pillar 2 requirement lowered by 50bps to 200bps, effective from 2018 1 2 3 4 5 6 Capital position Transitional CET1 ratio Transitional Tier 1 ratio Transitional Total Capital ratio MDA as of Dec-17 @8.78%(1) MDA as of Dec-17 @10.28%(1) MDA as of

  24. Slide 24: Solid fully loaded CET1 ratio at 13.60% and leverage ratio at 5.55%

    Solid fully loaded CET1 ratio at 13.60% and leverage ratio at 5.55% 1 2 3 4 5 6 Capital position Fully loaded CET1 capital(1) as of Dec-17, €bn €/bn 108.1 4Q17 65.6 75.6 3Q17 40.1 40.2 40.2 45.5 48.4 48.5 24.1 24.5 35.2 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 UC Peer 9 Peer 10 Peer 1

  25. Slide 25: Funding & Liquidity

    Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 4Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 25

  26. Slide 26: Well diversified and centrally coordinated funding and liquidity profile

    Well diversified and centrally coordinated funding and liquidity profile 1 2 3 4 5 6 Funding & Liquidity • UniCredit SpA is operating as the Group Holding as well as the Italian operating bank:  TLAC/MREL issuer assuming Single-Point-of-Entry (SPE)  Coordinated Group-wide funding and liquidity man

  27. Slide 27: Strong and disciplined liquidity management

    Strong and disciplined liquidity management 1 2 3 4 5 6 Funding & Liquidity 4Q17 strong liquidity buffer Compliant with key liquidity ratios €bn Additional eligible 207 assets available LCR NSFR(2) 19 within 12 months(1) Cash and Deposits >100% >100% with Central Banks 90 Unencumbered 188 assets (im

  28. Slide 28: Optimised TLAC funding plan

    Optimised TLAC funding plan: all issuances from UniCredit SpA coherent with SPE model 1 2 3 4 5 6 Funding & Liquidity UniCredit SpA TLAC funding plan: 2017 – 2019 UniCredit Group funding plan 2017 – 2019 Updated of which €bn Target 2019 78.7 76.0 funding plan to be issued €bn TLAC requirement(1): >1

  29. Slide 29: UniCredit Group 2017-18 funding plan

    UniCredit Group 2017-18 funding plan 1 2 3 4 5 6 Funding & Liquidity 2017 M/L Term Funding Plan by region 2018 M/L Term Funding Plan by product 27.5bn 26.9bn TLAC Funding Plan 22.5bn Unsecured Funding 29.7% Covered Bonds Italy 49.8% Supranational and other m/l term funding Italy 34.4% 30.5% TLAC Fun

  30. Slide 30: Ratings Overview

    Ratings Overview 1 2 3 4 5 6 Funding & Liquidity BBB/Stable/A2(1) Baa1/Positive/P2(1) BBB/Stable/F2(1) SpA (bbb)(2) (ba1)(2) (bbb)(2)  UC SpA upgraded at end of Oct'17: “…capital  UC SpA's outlook changed to positive from  UC SpA affirmed on Dec-17: “the bank has strengthening contributed to our

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