Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (March 2015)
39 slides from Unicredit's debt investor presentation, March 2015
Slide 1: UniCredit Group: 4Q14 & FY14 preliminary results
UniCredit Group: 4Q14 & FY14 preliminary results Presentation to Fixed Income Investors Milan, March 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) Retail, Miscellaneous and Unidentified Investors* Strong local roots in almost 20 countries Around 130,000 employees 24.3% About 7,500 branches Institutional
Slide 4: 4Q14 & FY14 Preliminary Results highlights
4Q14 & FY14 Preliminary Results highlights Management actions yielded remarkable achievements in 2014 Group net profit 2 bn in 2014 with 12 cents scrip dividend (35% pay-out ratio) Net profit target despite macroeconomic and geopolitical challenges, supported by: delivered improving core revenue
Slide 5: Agenda
Agenda Group Core Bank Non Core Annex 5 UniCredit Group - INTERNAL USE ONLY -
Slide 6: Group – Results
Group – Results Management actions delivered 2bn net profit in 2014, in line with target despite a worse than expected scenario Total assets, bn Tangible equity, bn +2.2% +5.9% Net profit, m -1.4% -4.5% 2,008 840 856 844 43.5 45.9 43.8 826 837 41.4 42.1 722 170 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Dec
Slide 7: Group – Asset quality
Group – Asset quality Gross impaired loans stabilizing in 2014 and coverage ratio up by 30bp q/q. Other impaired down due to lower inflows to impaired, confirming positive trend Gross impaired loans, bn Gross NPL(2), bn +6.3% +8.8% 79.7 83.6 83.5 84.4 49.1 50.6 52.1 45.1 Net impaired 19.0 18.1 19.3
Slide 8: Asset quality in Italy
Asset quality in Italy Confirmed better asset quality trend vs. banking system. Gross impaired growth rates decelerating driven by Non Core and workout 35% UniCredit SpA 30% ABI Sample(1) 25% Gross impaired 20% loans – yearly variations 15% 10% 5% Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun
Slide 9: Group – Regulatory capital (1/2)
Group – Regulatory capital (1/2) RWA up by 8bn q/q in compliance with CRR regulatory requirements impacting the credit component RWA(1) eop, bn Divisional breakdown - RWA, bn q/q y/y -2.3% CB Italy 76 +0.1% -1.5% +2.0% CB Germany 34 -0.3% -0.9% 419 411 409 CB Austria 24 -0.1% -4.4% 400 399 401 385 5
Slide 10: Group – Regulatory capital (2/2)
Group – Regulatory capital (2/2) CET1 ratio fully loaded at 10%, ahead of Strategic Plan target despite the negative impact of FX reserves. Basel 3 LR fully loaded at a sound 4.5% Basel 3 - Common Equity Tier I ratio: y/y evolution +39bp 10.41% +46bp -4bp 10.02% +24bp -37bp +23bp +10bp +4bp 9.36% De
Slide 11: Group – Medium-long term funding plan
Group – Medium-long term funding plan 2015 Funding Plan: 27% of yearly target already realized Funding mix, managerial data % of M/L term run offs by region(1) 10.1bn TLTRO 31.7 not included 26.6 Germany 28.9 24.6 28.2 13% 23% Austria 11% Italy 52% 60% 13% 69% 8% 0% Poland 14% 25% 76% Germany 28% 24
Slide 12: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 3mE + 98 bps 3Y Sen MS + 610 bps MS + 3 bps (1.250) 10Y AT1 3mE + 491 bps MS + 12 bps MS + 25 bps MS + 90 bps MS + 370 bps 3mE + 105 bps Pfand (1.000) (500) AT1 10Y 7Y
Slide 13: Debut Conditional Pass Through OBG
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 December 2014 (€bn) (1) 155 Additional eligible assets 39 available within 12 months LCR >100% under current CRD IV / Basel III assumptions Cash and Deposits 21 w
Slide 15: Agenda
Agenda Group Core Bank Non Core Annex 15 UniCredit Group - INTERNAL USE ONLY -
Slide 16: Core Bank – Net profit
Core Bank – Net profit Net profit at 3.7bn in FY14, supported by all divisions. Sound RoAC at c.11% Net profit, m Divisional breakdown – 4Q14 net profit, m RoAC(1) 3,749 CB Italy 459 24.9% -21.3% 1,102 868 CB Germany 215 30.8% CB Austria -67 n.m. -7,445 28.9% Poland 83 -10,200 CEE 129 6.4% 4Q13 3Q14
Slide 17: Core Bank – Net operating profit
Core Bank – Net operating profit NOP strongly up in 2014 with cost discipline offsetting revenue pressure. Significant reduction in LLP in 2014 Revenues, m -2.0% 22,644 22,183 +1.0% 5,650 5,475 5,530 Net operating profit, m 4Q13 3Q14 4Q14 FY13 FY14 +29.9% Costs, m 6,801 5,234 -2.9% +3.6% 13,649 13,2
Slide 18: Core Bank – Total revenues (1/2)
Core Bank – Total revenues (1/2) Lower revenues in 2014 mainly due to buy-back in 2013 and CVA adjustments. Revenue improvement accelerated in CB Italy Divisional breakdown – 4Q14 revenues, m Revenues, m At const. FX q/q y/y -2.0% CB Italy 2,043 +0.9% +4.2% 22,644 22,183 CB Germany 637 -0.1% -6.3% C
Slide 19: Core Bank – Total revenues (2/2)
Core Bank – Total revenues (2/2) Healthy progression of core revenues (net interest and fees). Turkey progressed q/q with commercial efforts offsetting regulatory changes Net interest(1), m Net fees and commissions, m +3.4% +4.3% 11,894 12,293 7,053 7,355 -0.9% +1.5% 3,061 3,079 3,053 1,782 1,804 1,
Slide 20: Core Bank – Net interest
Core Bank – Net interest Deposits re-pricing underpin a sound trend of NII in FY14. Lower rates in 4Q14 partly compensated by lower cost of liabilities and increasing lending volumes Net interest bridge y/y (m) +3.4% 12,293 11,894 +279 -186 -7 -268 -94 +845 -171 FY13 FX effect Loans volume Deposits
Slide 21: Core Bank – Customer loans
Core Bank – Customer loans Commercial lending volumes up by 1.4bn in 4Q mainly driven by CIB, offsetting negative FX effect in CEE & Poland Divisional breakdown – Customer loans, bn Customer loans(1), bn At const. FX q/q y/y -1.6% CB Italy 130.0 -0.1% -0.7% +0.5% 430.0 431.2 423.7 420.9 423.2 CB Ger
Slide 22: Core Bank – Customer direct funding
Core Bank – Customer direct funding Commercial direct funding up by almost 6.8bn, supported by all divisions Divisional breakdown – Direct funding, bn At const. FX q/q y/y Customer direct funding(1), bn CB Italy 145.2 +2% -3.1% CB Germany 72.1 +0.7% +0.4% +1.8% +1.8% 452.6 +7.5% CB Austria 51.4 +1.2
Slide 23: Core Bank – Customer rates
Core Bank – Customer rates Re-pricing actions on deposits offset lower interest rates translating into stable margins y/y. Quarterly trend also affected by lower rates on TLTRO lending Lending customer rate, % (managerial figures) Deposits customer rate, % (managerial figures) -24bp 3.82% 3.81% 3.74
Slide 24: Core Bank – New loan origination in Commercial Bank Italy (1/2)
Core Bank – New loan origination in Commercial Bank Italy (1/2) MLT new flows higher than run offs, with higher margins despite lower rates and focused on best rating customers. Stock down y/y due to short term loans Net customer loans(1), bn Run off MLT: -11.1bn New Flows MLT: +13.2bn +5.2 -3.0 -3.
Slide 25: Core Bank – New loan origination in Commercial Bank Italy (2/2)
Core Bank – New loan origination in Commercial Bank Italy (2/2) Positive trend continued with over 13bn new MLT loans granted in FY14. 7.8bn TLTRO almost fully deployed to date Household mortgages new flows, m Personal loans new flows, m +111.6% +3.3% 3,442 2,151 2,222 1,627 755 892 870 924 457 624
Slide 26: Core Bank – Loan loss provisions
Core Bank – Loan loss provisions LLP up q/q after positive one-offs in 3Q14 but materially down y/y after additional LLP in 4Q13 to enhance coverage. CoR at 50bp in 2014 (-34bp y/y) Divisional breakdown – 4Q14 cost of risk, bp Loan loss provisions, m q/q y/y CB Italy 99 +59bp -127bp -43.2% 3,760 CB
Slide 27: Core Bank – CEE performance
Core Bank – CEE performance Balanced contribution across countries in CEE. South Eastern Europe and Central Europe gaining weight CEE: shares of main contributors Turkey(3),(4) South Eastern Europe(1) 100% 100% y/y const. y/y const. FY14 FY14 FX(4) FX South Eastern 18% Europe(1) 23% Net profit 341 -
Slide 28: Core Bank – UniCredit Bank Russia
Core Bank – UniCredit Bank Russia Resilient performance in 2014 despite headwinds. Given its sound fundamentals UniCredit Bank Russia is better positioned to weather the crisis (1) Euro, m FY13 FY14 Y/Y curr. Y/Y const. FX Revenues 942 796 -15.5% +1.6% o/w net interest 676 697 3.1% +24.0% o/w fees 1
Slide 29: Agenda
Agenda Group Core Bank Non Core Annex 29 UniCredit Group - INTERNAL USE ONLY -
Slide 30: Non Core – Gross customer loans
Non Core – Gross customer loans Gross exposure further down by over 4bn in 4Q14 and by 10bn y/y, proforma for 3.1bn performing loans transferred back to Core bank. Gross customer loans(1), bn 85.5 SPV 1.8 83.5 1.8 81.0 -10bn y/y proforma 79.6 0.7 75.2 for 3.1bn back to Leasing 10,3 0.7 0.7 Core Bank
Slide 31: Non Core – Asset quality
Non Core – Asset quality Downward trend of impaired loans confirmed y/y, with sound coverage at 53%. NPL up due to internal migrations whilst other impaired loans down NPL, bn Doubtful loans, bn +3.1% -7.5% 35,3 36,4 37,6 18,4 16,5 15,3 Total gross impaired loans, bn Dec-13 Sep-14 Dec-14 Dec-13 Sep-
Slide 32: Non Core – Results
Non Core – Results LLP up q/q after positive one-offs, significantly down y/y after additional LLP in 4Q13 to enhance coverage. Loss down to 1.7bn in FY14 Revenues, m Costs, m 691 604 591 330 -8.0% 139 155 143 127 77 65 4Q13 3Q14 4Q14 FY13 FY14 4Q13 3Q14 4Q14 FY13 FY14 LLP, m Net loss, m -77.8% -73.
Slide 33: Concluding remarks
Concluding remarks Management actions in 2014 succeeded to bring UniCredit back on a profitable path leveraging on our sound balance sheet UniCredit delivered 2bn net profit target in 2014 as a result of progressing core revenue mix, effective cost-cutting and on the back of positive underlying
Slide 34: Agenda
Agenda Group Core Bank Non Core Annex 34 UniCredit Group - INTERNAL USE ONLY -
Slide 35: Group – Regulatory capital
Group – Regulatory capital CET1 ratio fully loaded at 10% at December 2014, with a quarterly trend mostly affected by negative impact of FX reserve Basel 3 - Common Equity Tier I ratio: q/q evolution +39bp 10.41% 10.27% -6bp -26bp -3bp +4bp -7bp +13bp 10.02% Sep-14 RWAs FX reserve Reserves 4Q14 earn
Slide 36: Leverage Ratio
Leverage Ratio A sound level is confirmed, comparing well with peers Leverage Ratio Dec. 14 Sept. 14 6.7 5.9 5.2 5.0 4.7 4.5 4.1 4.2 3.8 3.8 3.5 3.5 3.6 3.4 Fully Loaded BIS3 Leverage Ratio, % (Dec. 2014) (4) (5) (4) (3) (3) CBK DBK BARC BNP CS SG CASA UBS UCG KBC SAN Erste BBVA ISP (1) SFT: Securit
Slide 37: Group – P&L and volumes
Group – P&L and volumes Net profit of 2bn for 2014, in line with target. Revenue trend in 2014 affected by trading, despite improving core revenues Euro (mln) 4Q13 1Q14 2Q14 3Q14 4Q14 ∆ % vs. ∆ % vs. FY13 FY14 ∆ % vs. 3Q14 4Q13 FY13 Total Revenues 5,789 5,578 5,789 5,551 5,595 +0.8% ▲ -3.4% ▼ 23,335
Slide 38: Core Bank – P&L and volumes
Core Bank – P&L and volumes Visible improvement delivered a sound net profit at almost 4bn in 2014 Euro (mln) 4Q13 1Q14 2Q14 3Q14 4Q14 ∆ % vs. ∆ % vs. FY13 FY14 ∆ % vs. 3Q14 4Q13 FY13 Total Revenues 5,650 5,479 5,699 5,475 5,530 +1.0% ▲ -2.1% ▼ 22,644 22,183 -2.0% ▼ Operating Costs -3,591 -3,337 -3,
Slide 39: Non Core – P&L and volumes
Non Core – P&L and volumes Loss at 1.7bn in FY14 significantly down vs FY13. Cost of risk at 425bp in 2014, threefold lower versus 2013 Euro (mln) 4Q13 1Q14 2Q14 3Q14 4Q14 ∆ % vs. ∆ % vs. FY13 FY14 ∆ % vs. 3Q14 4Q13 FY13 Total Revenues 139 99 89 77 65 -15.4% ▼ -53.3% ▼ 691 330 -52.2% ▼ Operating Cos