Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (May 2015)
40 slides from Unicredit's debt investor presentation, May 2015
Slide 1: UniCredit Group: 1Q15 results – Presentation to Fixed Income Investors
UniCredit Group: 1Q15 results Presentation to Fixed Income Investors Milan, May 2015
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: UniCredit at a glance
UniCredit at a glance A clear international profile based on a strong European identity UniCredit Highlights Shareholders’ Structure(1) Strong local roots in almost 20 countries Around 130,000 employees About 7,400 branches More than 31 mn customers in Europe One of the most important bank
Slide 4: 1Q15 Results highlights
1Q15 Results highlights Net profit at 512m in 1q15 with 4.8% RoTE, despite new charges for Single Resolution Fund (SRF). Core bank net profit at 876m with 9.4% ROAC Earnings Group net profit 512m despite low interest rates and the first contribution to the SRF generation Return on Tangible Equit
Slide 5: Agenda
Agenda Group Core Bank Non Core Annex 5 UniCredit Group - INTERNAL USE ONLY -
Slide 6: Group – Results
Group – Results Net profit at 512m with 4.8% RoTE, despite additional charges for Single Resolution Fund. Tangible equity increased by almost 2bn q/q Total assets, bn Tangible equity, bn +7.2% +8.3% +6.7% +4.1% Net profit, m 901 43.5 45.9 43.8 45.6 856 42.1 840 837 844 712 Mar-14 Jun-14 Sep-14 Dec-1
Slide 7: Group – Asset quality
Group – Asset quality Gross impaired down q/q due to the ongoing disposal of UCCMB, with coverage stable net of UCCMB. Other gross impaired reduction driven by lower inflows Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn -0.5% +4.8% +4.9% +8.8% 83.6 84.4 83.2 45.1 49.1 49.2 52.1 51.
Slide 8: Asset quality in Italy
Asset quality in Italy Confirmed better asset quality trend vs. banking system UCI Spa ABI sample(1) Gross impaired loans Gross bad loans (sofferenze) Other gross impaired loans Base 100 at Dec-12 Base 100 at Dec-12 Base 100 at Dec-12 139 150 127 127 137 146 138 134 118 124 129 113 118 117 117 122 1
Slide 9: Group – Regulatory capital (1/2)
Group – Regulatory capital (1/2) RWA increased by 12bn q/q with credit risk up by 8bn and market risk up by 4bn, mainly due to FX RWA eop, bn Divisional breakdown - RWA, bn +0.4% q/q y/y +2.8% CB Italy 83 +3.2% +5.2% 419 421 409 CB Germany 33 -1% -5.7% 399 401 44 Oper. 52 CB Austria 28 +17.6% +4.1%
Slide 10: Group – Regulatory capital (2/2)
Group – Regulatory capital (2/2) CET1 ratio fully loaded up to 10.35% in Mar-15, including Pioneer deal. Leverage ratio at a sound 4.5% fully loaded, among the best in Europe. Basel 3 - Common Equity Tier I ratio fully loaded(1): q/q evolution +15bp -20bp 10.35% incl. +13bp -8bp Pioneer deal +12bp -
Slide 11: Group – Medium-long term funding plan
Group – Medium-long term funding plan 2015 Group Funding Plan ahead of schedule given 2.5bn issuance of Tier 2 instruments in 1q15 Funding mix, managerial data % of M/L term run offs by region(1) 10.1bn TLTRO 7.9bn TLTRO 31.4bn not included 26.6bn not included 29.2bn 24.6bn Germany 28.2bn 21% 23% 60
Slide 12: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 MS + 610 bps MS + 3 bps 10Y AT1 MS -14 bps MS + 25 bps MS + 90 bps MS + 370 bps 3mE + 105 bps Pfand (1.000) (500) 7Y 5YSen 6Y 5Y 5YSen 5YSen Unicredit Pfand (500) (1.0
Slide 13: Debut Conditional Pass Through OBG 1bn 0.75% due April 2025
Debut Conditional Pass Through OBG 1bn 0.75% due April 2025 Transaction details Investors and Geographical distribution (allocated) Issuer/Guarantor UniCredit SpA / UniCredit OBG Srl Rating (Exp.) AA+ (Fitch) Issue size EUR 1,000mln Status Obbligazioni Bancarie Garantite – Conditional Pass Through M
Slide 14: Very strong liquidity position confirmed
Very strong liquidity position confirmed 1-year Group liquidity buffer exceeds 12m wholesale funding Liquidity buffer (12 months) as of March 2015 (€bn) (1) 163 Additional eligible assets 28 available within 12 months LCR >100% under Cash and Deposits current CRD IV / Basel 20 with Central Banks I
Slide 15: Ratings Overview
Ratings Overview Issuer Ratings(1) Recent actions and key individual rating drivers Italy BBB-/Stable/A3 On the 18th December 2014, UC SpA's rating was aligned with the sovereign Italy, as S&P's criteria caps the rating at the same level UC SpA BBB-/Stable/A3 The outlook is stable – also because
Slide 16: Agenda
Agenda Group Core Bank Non Core Annex 16 UniCredit Group - INTERNAL USE ONLY -
Slide 17: Core Bank – Net profit
Core Bank – Net profit Sound RoAC at 9.4% with most divisions positively contributing to a net profit of 0.9bn in 1q15, despite 90m of SRF contribution booked in 1q15 Net profit, m Divisional breakdown – 1Q15 net profit, m +2.5% RoAC(1) 1,006 854 876 CB Italy 564 27.1% CB Germany 42 6.2% CB Austria
Slide 18: Core Bank – Net operating profit
Core Bank – Net operating profit Significant hike in NOP supported by higher revenues, thorough cost control and a reduction in LLP Revenues, m +2.8% 5,481 5,531 5,685 Net operating profit, m +27.6% 1Q14 4Q14 1Q15 1,863 1,722 Costs, m 1,460 -1.8% 3,236 3,311 3,251 1Q14 4Q14 1Q15 Loan loss provisions
Slide 19: Core Bank – Total revenues (1/2)
Core Bank – Total revenues (1/2) Strong progression of revenue generation by CB Italy, CEE and CIB. AM&AG units positively growing above 20% y/y Divisional breakdown – 1Q15 revenues, m Revenues, m At const. FX q/q y/y CB Italy 2,203 +6.8% +3.3% +2.8% 5,685 CB Germany 645 +1.2% -6.9% 5,531 5,481 CB A
Slide 20: Core Bank – Total revenues (2/2)
Core Bank – Total revenues (2/2) Core revenues increased with fees from AuM more than offsetting net interest. Higher trading income due to Markets activities Net interest(1), m Net fees and commissions, m -3.4% +7.4% 3,015 3,042 2,937 1,968 1,830 1,833 1Q14 4Q14 1Q15 1Q14 4Q14 1Q15 Trading income,
Slide 21: Core Bank – Net interest
Core Bank – Net interest Net interest broadly flat in 1q15 with loan volumes and deposits re-pricing mitigating the impact of low interest rates Net interest bridge q/q (m) 3,042 -0.4% -57 -92 -11 -15 +21 2,950 +56 2,937 -78 +19 -6 Commercial dynamics: -7m 4Q14 Days and Baseline Loans volume Deposit
Slide 22: Core Bank – Customer loans
Core Bank – Customer loans Commercial lending volumes up by 9.3bn in 1q15 mainly driven by CB Italy and Poland. CEE & Poland benefitting from FX effect Divisional breakdown – Customer loans, bn Customer loans, bn At const. FX q/q y/y +2.0% CB Italy(1) 133.9 +3% +1.4% +4.0% 440.0 431.4 CB Germany (1)
Slide 23: Core Bank – Customer direct funding
Core Bank – Customer direct funding Commercial direct funding up by 5.3bn. Commercial banks and CEE & Poland are top contributors Divisional breakdown – Direct funding, bn At const. FX q/q y/y Customer direct funding(1), bn CB Italy(2) 144.1 -0.8% -2.5% CB Germany(2) 72.0 -0.2% +1.8% +4.1% +2.7% 465
Slide 24: Core Bank – New origination in commercial banks
Core Bank – New origination in commercial banks New MLT loans growing in all commercial banks with Italy supported by Corporate, Germany and Austria by households New flows o/w household mortgages o/w Corporates +62.3% +148.8% 4,448 +0.1% 2,168 CB Italy, m 2,741 758 759 872 1Q14 1Q15 1Q14 1Q15 1Q14
Slide 25: Core Bank – New loan origination in Commercial bank Italy
Core Bank – New loan origination in Commercial bank Italy MLT new flows at 4.4bn in 1q15 (+62% y/y) offsetting run offs: new flows show higher spreads despite lower rates. Total loans up to 133.9bn as of Mar-15 Net customer loans(1), bn Run off MLT: -2.7bn New Flows MLT: +4.4bn +1.9 +2.2 -1.0 +0.9 -
Slide 26: Core Bank – Total costs
Core Bank – Total costs Cost efficiency under way, with total costs further down by 1.8% q/q thanks to lower administrative expenses and depreciation Staff expenses, m +0.5% 2,047 2,047 2,057 Costs, m -1.8% 1Q14 4Q14 1Q15 3,236 3,311 3,251 Other administrative expenses(1), m -5.4% 973 1,025 970 1Q14
Slide 27: Core Bank – Key strategic pillars
Core bank – Key strategic pillars Execution is ongoing… Transform commercial bank(1) Invest in Growth business Global platforms Direct Costs, m Revenues CEE&Poland(2), m Revenues CIB incl. shadow(3), m -33 +74 +107 (-2.2%) (+5.5%) (+6.5%) 1,472 1,439 1,335 1,409 1,641 1,748 1Q14 1Q15 1Q14 1Q15 1Q14
Slide 28: Core Bank – Loan loss provisions
Core Bank – Loan loss provisions LLP down q/q, with CoR at 53bp decreasing across most divisions Divisional breakdown – 1Q15 cost of risk, bp Loan loss provisions, m q/q y/y CB Italy 85 -16bp 0bp -24.8% 759 CB Germany 12 0bp +5bp 571 523 CB Austria 23 -12bp -17bp Poland 47 -1bp -9bp CEE 120 -22bp +1
Slide 29: Core Bank – CEE performance
Core Bank – CEE performance Balanced contribution to operating performance across countries in CEE. South Eastern Europe and Central Europe gaining share within the division Turkey(1), (2) - NOP, m const. FX South Eastern Europe(2), (3) - NOP, m const. FX +26.1% +20.5% +174.7% -34.4% 135 182 145 89
Slide 30: Core Bank – UniCredit Bank Russia
Core Bank – UniCredit Bank Russia Resilient business with positive performance in 1Q15 confirms that UCG is better positioned than peers to weather a harsh environment Q/Q Q/Q Y/Y Y/Y €, m 1Q14 4Q14 1Q15 curr. FX const. FX curr. FX const. FX Revenues 195 133 166 +25.4% +35.5% -14.7% +25.9% o/w net i
Slide 31: Agenda
Agenda Group Core Bank Non Core Annex 31 UniCredit Group - INTERNAL USE ONLY -
Slide 32: Non Core – Gross customer loans
Non Core – Gross customer loans Gross loans further down by 3bn in 1Q15 (-11bn y/y) due to the ongoing UCCMB disposal and continued de-risking Gross customer loans, bn €, m 1Q14 4Q14 1Q15 Q/Q Y/Y Revenues 107 73 64 -12.4% -40.0% -11bn Costs 174 121 167 +38.2% -4.2% 83.2 -3bn LLP 315 938 409 -56.4% +
Slide 33: Non Core – Asset quality
Non Core – Asset quality Impaired loans decreased both q/q and y/y. Gross impaired loans y/y confirm downward trend, driven by continued reduction of other impaired Gross impaired loans(1), bn Gross bad loans (sofferenze)(1), bn -3.4% -3.5% 57.0 56.8 54.9 35.5 37.6 36.3 Net 26.7 26.8 26.5 13.0 14.0
Slide 34: Concluding remarks
Concluding remarks Group net profit at 512m, with a sound performance of the Core bank and Non Core portfolio, despite additional charges related to the SRF, translating into a RoTE of 4.8% Core bank showed continued progress in earnings generation as a result of an increase in core revenues, co
Slide 35: Agenda
Agenda Group Core Bank Non Core Annex 35 UniCredit Group - INTERNAL USE ONLY -
Slide 36: Group – Leverage ratio
Group – Leverage ratio Basel 3 leverage ratio fully loaded at 4.5%, among the best in Europe. Leverage ratio trans. at 4.7%, embedding a further phase-in of 40% for 2015 Basel 3 leverage ratio fully loaded(1) Basel 3 leverage ratio(1) Fully loaded 2014 Basel 3 2015 Basel 3 Transitional 2014 Basel 3
Slide 37: Leverage Ratio
Leverage Ratio A sound level is confirmed, comparing well with peers Leverage Ratio 6.5 6.2 4.9 5.0 4.5 4.6 4.6 4.4 3.6 3.7 3.7 3.7 3.4 3.4 Fully Loaded BIS3 Leverage Ratio, % (Mar. 2015) (2) (3) (2) (1) (1) DBK BNP CS CBK BARC SG CASA UCG UBS SAN KBC Erste BBVA ISP (1) Transitional Data (2) Swiss r
Slide 38: Group – P&L and volumes
Group – P&L and volumes Net profit of 512m in 1q15, improving thanks to all P&L lines Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 ∆ % vs. ∆ % vs. 4Q14 1Q14 Total Revenues 5,588 5,798 5,561 5,604 5,749 +2.6% ▲ +2.9% ▲ Operating Costs -3,410 -3,336 -3,328 -3,432 -3,418 -0.4% ▼ +0.2% ▲ Gross Operating Profit 2,1
Slide 39: Core Bank – P&L and volumes
Core Bank – P&L and volumes Confirmed positive dynamics underpinned by operating profitability and lower cost of risk Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 ∆ % vs. ∆ % vs. 4Q14 1Q14 Total Revenues 5,481 5,686 5,476 5,531 5,685 +2.8% ▲ +3.7% ▲ Operating Costs -3,236 -3,188 -3,183 -3,311 -3,251 -1.8% ▼ +0
Slide 40: Non Core – P&L and volumes
Non Core – P&L and volumes Loss at 364m in 1q15, improving q/q with lower cost of risk more than offsetting lower gross operating profit Euro (m) 1Q14 2Q14 3Q14 4Q14 1Q15 ∆ % vs. ∆ % vs. 4Q14 1Q14 Total Revenues 107 112 85 73 64 -12.4% ▼ -40.0% ▼ Operating Costs -174 -148 -145 -121 -167 +38.2% ▲ -4.