Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (May 2024)
44 slides from Unicredit's debt investor presentation, May 7, 2024
Slide 1: UniCredit Unlocked: Fixed Income & ESG presentation
UniCredit Unlocked Record results, significant value ahead Fixed Income & ESG presentation Milan, 07 May 2024
Slide 2: Agenda
Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisation ESG 2
Slide 3: Redefining Excellence
Redefining Excellence Consistently delivering outstanding results, leading peers across all KPIs 6.3bn Net Revenue +7.5% Y/Y DELIVERED the best Q1 in UniCredit’s history, beating records once again, the 13th consecutive quarter of quality profitable growth 2.6bn Net Profit +23.9% Y/Y IMPROVED furthe
Slide 4: 13th consecutive quarter of quality profitable growth
UniCredit - Public UNICREDIT AT A GLANCE 13th consecutive quarter of quality profitable growth Continuing our journey of success: across all metrics 1Q24 HIGHLIGHTS ACROSS OUR 3 LEVERS 1Q24 KEY METRICS In million 1Q24 7.5 Y/Y Q/Q QUALITY + % Net Revenue 6,268 +7.5% +10.9% NET +5.3% REVENUE GROWTH Ne
Slide 5: Client Solutions: quality capital-light growth with best-in-class factories
UniCredit - Public UNICREDIT AT A GLANCE Client Solutions: quality capital-light growth with best-in-class factories Enhancing our three Group product factories, and capitalising on scale and scope to deliver best-in-class products to our clients Gross Revenue, bn Y/Y Corporate Solutions 1.4 4 + % 2
Slide 6: Payment Solutions explained
UniCredit - Public UNICREDIT AT A GLANCE Payment Solutions explained A differentiated sizeable … uniquely capital-light business … positioned to lead … VISION 2.5 bn Revenue1 UNIVERSAL BANK NATURE Serving 15 million clients, Every European FY23 Retail (14m) and client’s first choice Corporates (1m)
Slide 7: Looking ahead
UniCredit - Public UNICREDIT AT A GLANCE Looking ahead Upgrading 2024 Guidance … … Continue to progress in 2025-2026 Intention to either deploy or return excess capital no later than 2027 NET REVENUE CONFIRMED c.22.5bn c. 10bn calendar year 1 Sustainable Growth EPS, DPS Strong growth In the event of
Slide 8: Agenda
Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisation ESG 8
Slide 9: Net Revenue up 7.5% Y/Y on growing Fees and robust NII
UniCredit - Public FINANCIAL HIGHLIGHTS Net Revenue up 7.5% Y/Y on growing Fees and robust NII NET REVENUE, GROWING NET REVENUE BASE WITH RECORD 1Q KEY HIGHLIGHTS bn bn NET INTEREST INCOME +9.0% excl. Net 5.8 6.0 6.3 Focus on quality growth, Current Account Fee 5.8 5.7 Reduction in Italy and reven
Slide 10: Robust and high quality net interest income
UniCredit - Public FINANCIAL HIGHLIGHTS Robust and high quality net interest income NET INTEREST INCOME, STRONG RISK ADJUSTED NII KEY HIGHLIGHTS bn SOUND NII GROWTH +8% Y/Y 2.0% 2.1% 2.1% 2.2% 2.1% WHILE -1% Q/Q DRIVEN BY 1.9% +5.3% Net NII2 1.3% 1.3% Disciplined pass-through 1.2% NIM1 management:
Slide 11: Structurally low CoR proving transformed and superior asset quality
UniCredit - Public FINANCIAL HIGHLIGHTS Structurally low CoR proving transformed and superior asset quality QUARTERLY EVOLUTION KEY HIGHLIGHTS Underlying CoR1 22 19 19 Stated CoR remains very low Higher than stated 6 10 14 7 11 mainly due to bps -3 at 10bps mainly due to continued Russia net reversa
Slide 12: Strong start to the year with broad-based fee growth
UniCredit - Public FINANCIAL HIGHLIGHTS Strong start to the year with broad-based fee growth FEES, DYNAMIC DRIVEN BY RENEWED CLIENT APPETITE AND PRODUCT OFFERING KEY HIGHLIGHTS +7.6% excl. Current bn Account Fee SIZEABLE BASE Reduction in Italy and 151 140 135 136 138 140 139 144 152 securitization
Slide 13: Continued cost reduction despite inflation and investments
UniCredit - Public FINANCIAL HIGHLIGHTS Continued cost reduction despite inflation and investments COSTS, SUPERIOR OPERATIONAL EXCELLENCE KEY HIGHLIGHTS Non-HR costs: -2.5% Y/Y bn HR costs: +0.5% Y/Y Impacted by bonus pool increase TARGETED EFFICIENCIES −1% Streamlining the organisation, 2.3 Cost ev
Slide 14: Increase in CET1r driven by excellent organic capital generation
UniCredit - Public FINANCIAL HIGHLIGHTS Increase in CET1r driven by excellent organic capital generation NET REVENUE / RWA KEY HIGHLIGHTS (%) QUALITY GROWTH +118bps Share buyback1: -54bps Our discipline and focus on (3.4bn) Cash dividend2: -36bps client segments with an above Cashes coupon: -2bps Co
Slide 15: Agenda
Agenda UniCredit at a glance Financial highlights Funding, liquidity and securitisation ESG 15
Slide 16: 2024 Group Funding Plan
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION 2024 Group Funding Plan • UniCredit S.p.A. acts as the Group Holding as well as the Italian operating bank and is the MREL issuer under Single-Point-of-Entry (SPE) • Geographical footprint and well-established name with recognition in domestic
Slide 17: 2024 MREL Funding Plan: c.45% executed, focus on more senior instruments
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION 2024 MREL Funding Plan: c.45% executed, focus on more senior instruments UniCredit SpA 2024 MREL expected funding plan, €/bn Main drivers Funding Plan Issued in Expected by MREL Funding Plan 2024 already executed for 2024 20243 YE24 c.45% with
Slide 18: Limited redemptions in the next three years allows for selective issuances
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION Limited redemptions in the next three years allows for selective issuances Group liabilities structure breakdown1 M/L term liability structure Maturity profile up to 2027, €bn2 18 17 4% AT1 UC SPA 8% 12 7 T2 UC SPA 7 42% 5 2 1 SENIOR UNSECURED
Slide 19: Balance Sheet & liquidity profile
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION Balance Sheet & liquidity profile 1Q24 balance sheet: 811bn €bn LIQUIDITY PROFILE Other Assets 40 24 Other liabilities Cash and cash balances 65 41 Financial liabilities & hedging liabilities LCR >140% 66 Equity and equity instruments Financia
Slide 20: 1Q24 ample buffers over MREL requirement
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION 1Q24 ample buffers over MREL requirement MREL1 Eligible instruments Ample buffers over capital Actual 32.81% 91.8bn regulatory requirement 1Q24 Buffer 621bps SP2 24.0bn SNP3 8.4bn CET1 ratio Tier 1 ratio Tier 2 8.8bn Fully Loaded5 transitional
Slide 21: Covered Bonds (CB) program
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION Covered Bonds (CB) program ITALY GERMANY AUSTRIA CZECH REPUBLIC UniCredit is a key Mortgage Mortgage Public Sector Mortgage Public Sector Mortgage mortgage provider and a leading Covered Bond Program size (Euro) 35bn 50bn 50bn 40bn 40bn 10bn i
Slide 22: ARTS program to be expanded
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION ARTS program to be expanded ARTS: a single program for Securitisations cross assets and regions In 2024, plan is to strengthen 4Q21-2023 2024 the ARTS program by executing ITALY • Residential Mortgages Already securitized transactions on alrea
Slide 23: Performance recognized in improved stand-alone creditworthiness
UniCredit - Public FUNDING, LIQUIDITY AND SECURITISATION Performance recognized in improved stand-alone creditworthiness BBB / Stable / A-21 Baa3 / Stable / P-31 BBB / Stable / F21 Covered Bonds (Italian OBG I / OBG II)2 AA- / n.r. UniCredit’s stand-alone rating Aa3 / Aa3 UniCredit’s deposit and sen
Slide 24: Agenda
Agenda UniCredit at a glance Financial highlights Funding and liquidity ESG 24
Slide 25: Updated ESG Targets: focus on more meaningful penetration for 2024
UniCredit - Public ESG Updated ESG Targets: focus on more meaningful penetration for 2024 … to ESG penetration ESG Lending1 13% Positive performance with c.19bn environmental lending A more transparent view on and 8.7bn social lending since 15% UniCredit’s ESG performance beginning of 2022 over tota
Slide 26: Leading by example and supporting our clients' green and social transition
UniCredit - Public ESG Leading by example and supporting our clients’ green and social transition Environment Social Governance Promoting sustainable financial instruments Promoting sustainable financial instruments CEO & Top Management remuneration2 11 c. 6.5bn 1 own Social Bond (155m, Sep21) Commu
Slide 27: Main strategic commitments supporting our ESG stance beyond climate
UniCredit - Public ESG Main strategic commitments supporting our ESG stance beyond climate • Achieve gender equity at all organisational levels and promote a more diverse, inclusive and sustainable workplace UNEP-FI FOR NET ZERO BANKING • Allocated c.100m to close the Non-Demographic Gender Pay FINA
Slide 28: Net Zero target setting in progress and Net Zero transition plan defined
UniCredit - Public ESG Net Zero target setting in progress and Net Zero transition plan defined UniCredit focus so far Going forward in 2024 Oil & Gas Power Generation Automotive UCG Priority Sectors Fully implement • Interim emissions targets disclosure in January 2023, in pursuit of UniCredit Net
Slide 29: New target set on Steel and progress monitored on three priority sectors
UniCredit - Public ESG New target set on Steel and progress monitored on three priority sectors UniCredit Design Elements Baseline Progress Target Sector Value chain Primary metric Emission coverage Year Measure Value1 2022 vs. 2021 By 20301 NEW Steel Crude steel producers2 Physical intensity Scope
Slide 30: Strong environmental, social and reputational risk management and policies
UniCredit - Public ESG Strong environmental, social and reputational risk management and policies Client applicability Other sector policies. Defence/Armaments OIL & GAS A B C COAL A B C Mining sector Water infrastructure3 Current revenues from >25% & Increase in coal business Civil Nuclear3 ≤ 25% >
Slide 31: Supporting the integration of ESG into UniCredit's strategy
UniCredit - Public ESG Supporting the integration of ESG into UniCredit’s strategy Chair Organisational and Audit Committee Board of Directors governance structure, Defines the overall strategy of the bank, including the focus on ESG Group’s ESG strategy, and overseeing its implementation Governance
Slide 32: Delivering on commitment to sustainability
UniCredit - Public ESG Delivering on commitment to sustainability 1Q23 2Q23 3Q23 4Q23 1Q24 2023 Group Remuneration Improved to “64” from “60” (Advanced) Best Bank for Sustainability Policy approved by the mainly thanks to improvement in in Central and Eastern Shareholders’ Meeting As signatory bank
Slide 33: ESG ratings and indices: UniCredit efforts recognised thanks to improvements
UniCredit - Public ESG ESG ratings and indices: UniCredit efforts recognised thanks to improvements CCC B BB BBB A AA AAA ● Rating upgraded to “AA” as of July 23. Included in the Bloomberg MSCI Green Bond Index ● Improvements in efforts to manage social risks and robust integration of ESG practices
Slide 34: Annex
Annex
Slide 35: Focus on Commercial Real Estate (CRE) portfolio
UniCredit - Public ANNEX Focus on Commercial Real Estate (CRE) portfolio CRE vs total loans in line or below market1 in Italy, Germany and Austria; volume stable over recent years with declining gross NPE at c.4% CRE portfolio as of 4Q23 Split by Region, bn Split by asset class, bn Portfolio towards
Slide 36: Group gross loans breakdown by stages
UniCredit - Public ANNEX Group gross loans breakdown by stages Stage 3 Group gross loans1 and provisions EoP, bn 2.7% 2.6% 2.7% 2.7% 2.7% o/w Gross NPE (% of gross loans) Stage 3 1Q23 2Q23 3Q23 4Q23 1Q24 465 462 Coverage Stage 3 13 12 447 440 445 ratio 48.5% 47.9% 48.1% 47.2% 45.5% 12 12 Reduction m
Slide 37: Russia: resized and de-risked with discipline, at minimum cost
UniCredit - Public ANNEX Russia: resized and de-risked with discipline, at minimum cost REDUCTION OF GROUP EXPOSURE, DERISKING AT MINIMUM COST DECISIVE ACTIONS TAKEN Impact from extreme loss NON-LOCAL EXPOSURE AT PRACTICALLY ZERO assessment (bps)3 Conservatively provisioned our Cross –border exposur
Slide 38: New representation of fees and recast
UniCredit - Public ANNEX New representation of fees and recast NEW REPRESENTATION OF FEES PREVIOUS SPLIT BY PRODUCT NEW SPLIT BY PRODUCT MAINLY INCLUDES FEE AND COMMISSIONS DERIVING FROM INVESTMENT INVESTMENT PRODUCTS Asset under Management (AuM)1, Asset under Advisory (AuA)2 and Asset under Custody
Slide 39: End notes
End notes
Slide 40: Disclaimer
UniCredit - Public END NOTES Disclaimer This presentation may contain “forward-looking statements” which includes all statements Canada or Japan or any other jurisdiction where such an offer or solicitation would be that do not relate solely to historical or current facts and which are therefore inh
Slide 41: Information related to this presentation (1/4)
UniCredit - Public END NOTES Information related to this presentation (1/4) General notes End notes are an integral part of this presentation All data throughout the documents are in Euros Numbers throughout the presentation may not add up precisely to the totals provided in tables and text due to r
Slide 42: Information related to this presentation (2/4)
UniCredit - Public END NOTES Information related to this presentation (2/4) Main definitions “Allocated capital” calculated as 13.0% of RWA plus deductions “Clients” means those clients that made at least one transaction in the last three months “Cost of risk” based on reclassified P&L and Balance s
Slide 43: Information related to this presentation (3/4)
UniCredit - Public END NOTES Information related to this presentation (3/4) Main definitions “Gross NPE Ratio” Gross non performing exposures over gross loans to customers (including active repos, excluding debt securities and IFRS5 reclassified assets) “HQLA” High-Quality Liquid Assets - assets, wh
Slide 44: Information related to this presentation (4/4)
UniCredit - Public END NOTES Information related to this presentation (4/4) Main definitions “Pass-through” calculated as average cost of total deposits on average Euribor 3M or equivalent interest rate in the period. Deposit amount including term and sight products. “PD scenario” Impacts deriving f