Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (December 2014)
37 slides from Unicredit's debt investor presentation, December 2014
Slide 1: UniCredit Group: 3Q14 Results
UniCredit Group: 3Q14 Results Presentation to Fixed Income Investors December 2014 UC group - INTERNAL USE ONLY -
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 7,700 branches Institutional
Slide 4: A new strategic agenda
A new strategic agenda UCG journey towards sustainable profitability 2008-2010 2010-2013 2013-2018 PREVIOUS PLAN: NEW PLAN: FACING THE CRISIS STRENGTHENING ACCELERATING THE JOURNEY TOWARDS FUNDAMENTALS SUSTAINABLE PROFITABILITY AMBITION Capital shortage Balance sheet 13 restructuring UCG Cost of
Slide 5: Financial targets
Financial targets The Group overall will benefit from a very solid balance sheet strategy GROUP AVERAGE DIVIDEND PAYOUT RATIO OF 40% (1)Excluding effects related to relevant buy-backs, restructuring costs, goodwill and PPA impairments, Ukraine evaluation under IFRS5, gain on Bank of Italy stake, cha
Slide 6: 3Q14 Highlights
3Q14 Highlights Strong Group net profit at 1.8bn in 9M14 on track towards 2bn target for 2014. Solid balance sheet: CET1 ratio at 10.8% and coverage ratio above 50% Group net profit 3Q14 almost doubled q/q at 722m (+17% excluding BankIT tax in 2Q14), 1.8bn in 9M14 (+81% y/y) achieving a ROTE of 6.
Slide 7: Agenda
Agenda Group Core Bank Non Core Annex 7 UniCredit Group - INTERNAL USE ONLY -
Slide 8: Group – Results
Group – Results Net profit up by c.17% excluding the tax on BankIT in 2Q14, +81% 9M/9M. Tangible equity further up by 2.4bn also thanks to 1bn AT1 and Fineco IPO Total assets, bn Tangible equity, bn -0.8% -0.5% +2.3% +5.4% 865 858 46,2 43,5 45,9 828 842 839 41,4 42,1 Net profit(1), m +81.3% Sep. ’13
Slide 9: Group – Asset quality
Group – Asset quality Impaired loans broadly stable q/q with a sound coverage ratio in excess of 50%, and over 60% on NPLs Gross impaired loans, bn Gross NPLs(2), bn +1.3% +2.1% 83.4 82.4 83.5 47,3 49,6 50,6 Sep-13 Jun-14 Sep-14 Coverage Sep-13 Jun-14 Sep-14 ratio 56.4% 61.1% 61.8% Coverage ratio(1)
Slide 10: Group – Regulatory capital (1/2)
Group – Regulatory capital (1/2) RWA flat at around 400bn both q/q and y/y RWA(1) eop, bn Divisional breakdown - RWA, bn q/q y/y +0.4% 423 CB Italy 76 +2.1% -0.4% 419 +0.6% 411 401 CB Germany 34 +2.8% -3.6% 400 399 Oper. 51 385 52 +1% -5.4% 52 CB Austria 24 44 44 52 CEE 85 +3.5% +1.4% 52 Poland 25 +
Slide 11: Group – Regulatory capital (2/2)
Group – Regulatory capital (2/2) CET1 ratio fully loaded confirmed at a sound level of 10.35%. Basel 3 leverage ratio at 4.7% fully loaded, among the best in Europe Basel 3 - Common Equity Tier I ratio: q/q evolution +46bp 10.81% 0.08% +18bp -4bp -9bp +16bp -6bp 10.35% 10.12% 0.08% 10.73% 10.27% Jun
Slide 12: Group – Medium-long term funding plan
Group – Medium-long term funding plan First TLTRO take-up of 7.8bn, tapping the maximum allotment for Italy. Well diversified execution of funding plan 2014 Funding mix, managerial data % of m/l term run offs by region(1) 30.4 31.5 7.8bn TLTRO excluded 32.3 22.4 27.4 27.4 27% 22.4 22% 12% Italy 49%
Slide 13: UniCredit has continuous wholesale market access
UniCredit has continuous wholesale market access Strong debt market franchise confirmed Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 7Y 3mE + 98 bps Sen MS + 170 bps (1,250) 3Y MS + 135 bps Sen MS + 610 bps (1.250) 5Y 10Y AT1 Sen MS + 158 bps OBG MS + 98 bps 3mE + 491 bps MS + 12 bps MS + 25 bps
Slide 14: 1bn PERPNC7 Additional Tier 1
1bn PERPNC7 Additional Tier 1 Second AT1 deal for UniCredit and from an Italian bank with an orderbook of over 2bn 1bn PERPNC7 Additional Tier 1 Geographical and Investors distribution (allocated) Issuer UniCredit Spa 13% 25% Issue Size 1bn 34% 2% 0% Maturity Maturity MaturityDate Date Date Perpetua
Slide 15: Very strong liquidity position
Very strong liquidity position 1-year liquidity buffer exceeds 12m wholesale funding Liquidity buffer (12 months) as of September 2014 (bn) (1) 147 Additional eligible assets 21 LCR >100% under available within 12 months current CRD IV Cash and Deposits assumptions 22 with Central Banks NSFR sti
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 Robust growth of 11% q/q to over 1bn in 3Q14, driven by CB Italy, CEE and CIB, with all divisions profitable for the third quarter in a row Net profit(1), m Divisional breakdown – 3Q14 net profit, m RoAC(2) +13.0% CB Italy 617 33.2% 3.110 2.751 CB Germany 70 10% +26.0% +11.1%
Slide 18: Core Bank – Net operating profit
Core Bank – Net operating profit Cost discipline and one-off LLP reduction underpin positive NOP progression both on a quarterly and on a yearly basis Revenues(1), m +2.4% +0.3% 16,560 16,604 -3.2% 5,347 5,651 5,473 Net operating profit(1), m 3Q13 2Q14 3Q14 9M13 9M14 +12.5% Costs, m 5.361 4.767 +34.
Slide 19: Core Bank – Total revenues (1/2)
Core Bank – Total revenues (1/2) Positive y/y trend mainly supported by CB Italy, representing c.40% of total. CEE & Poland showed a sound quarterly progression Divisional breakdown – 3Q14 revenues, m Revenues(1), m q/q y/y +0.3% CB Italy 2,021 -6% +4.1% 16.560 16.604 CB Germany 637 -5.3% -2.8% CB A
Slide 20: Core Bank – Total revenues (2/2)
Core Bank – Total revenues (2/2) Revenue dynamics affected by typical 3q seasonality in fees and dividends. Turkey confirmed positive trend on the back of sound operating performance Net interest, m Net fees and commissions, m +4.6% +4.8% 9,238 5.525 8,832 5.272 +4.5% +4.6% -1.9% -4.6% 2,944 3,137 3
Slide 21: Core Bank – Net interest
Core Bank – Net interest Lower lending rates partly compensated by lower cost of liabilities q/q. Repricing of deposits and term funding underpin a sound y/y trend Net interest bridge q/q (m) -1.9% 3,137 -3 -6 -11 3,077 -72 +31 +14 -12 2Q14 Days, FX effect Loans Deposits Loans rate Deposits rate Ter
Slide 22: Core Bank – Customer loans
Core Bank – Customer loans Commercial lending volumes slightly down by 1.4bn q/q with positive dynamics in CEE & Poland offset by lower loan demand in CIB Divisional breakdown – Customer loans, bn Customer loans(1), bn q/q y/y -4.8% CB Italy 130.1 -0.6% -2% -0.7% 441,9 430,0 431,1 CB Germany 76.8 +0
Slide 23: Core Bank – Customer direct funding
Core Bank – Customer direct funding Commercial direct funding up by 5.6bn, thanks to CB Austria, CEE & Poland and CIB Divisional breakdown – Direct funding, bn q/q y/y Customer direct funding(1), bn CB Italy 142.4 -1.1% -4.2% CB Germany 71.6 +1.4% +3.2% +2.3% -0.2% 446,7 445,4 CB Austria 50.8 +4.8%
Slide 24: Core Bank – Customer rates
Core Bank – Customer rates Deposits repricing supported margin trend, partially offsetting lower lending rates following Euribor decline q/q but providing visible support y/y Lending customer rate, % (managerial figures) Deposits customer rate, % (managerial figures) -4 bp -9 bp 3.82% 3.81% 3.76% 3.
Slide 25: Core Bank – Medium-long term new origination in Italy
Core Bank – Medium-long term new origination in Italy Positive trend confirmed with almost 9bn new loans granted in Italy in 9M14. TLTRO deployment on track: c.3bn granted from Oct. (remainder in pipeline) Household mortgages new flows, m Personal loans new flows, m +139.4% +0.3% 2.517 1.694 1.699 8
Slide 26: Core Bank – Loan loss provisions
Core Bank – Loan loss provisions LLP down q/q, due to one-off effects in Italy, Germany and CIB, reducing cost of risk to 43bp in 9M14 Divisional breakdown – 3Q14 Cost of Risk, bps Loan loss provisions, m q/q y/y CB Italy 40 -20.7% -50bp -21bp 1.728 CB Germany -9 -11bp -22bp 1.371 CB Austria 14 +11b
Slide 27: Agenda
Agenda Group Core Bank Non Core Annex 27 UniCredit Group - INTERNAL USE ONLY -
Slide 28: Non Core – Gross customer loans
Non Core – Gross customer loans Gross exposure further down by 1.3bn in 3Q14. Gross loans down by over 8bn y/y Gross customer loans, bn -9.4% ( -8.2 bn) 88.0 -1.6% 1.8 85.6 SPV 83.6 (-1.3 bn) 1.8 81.0 1.8 79.7 Leasing 10,7 0.7 10,3 0.7 10,2 10,0 9,8 UCCMB 11,1 10,6 10,4 9,8 9,7 64.4 62.9 61.2 60.6 5
Slide 29: Non Core – Asset quality
Non Core – Asset quality Downward trend of impaired loans confirmed y/y. NPLs up due to internal migrations and other impaired loans down NPLs, bn Doubtful loans, bn +9.5% -7.2% +3.3% -2.7% 33,3 35,3 36,4 17,8 17,0 16,5 Total gross impaired loans, bn Sep-13 Jun-14 Sep-14 Sep-13 Jun-14 Sep-14 -0.8% +
Slide 30: Non Core – Results
Non Core – Results LLP up q/q, embedding the most relevant part of AQR, CoR increased from 310bp to 405bp. Revenues up after negative valuation of equity stake in 2Q14 Revenues, m Costs, m -62.1% +4.0% 552 442 460 -2.4% -41.5% -3.3% +138.8% 209 145 146 141 135 79 33 3Q13 2Q14 3Q14 9M13 9M14 3Q13 2Q1
Slide 31: Concluding Remarks
Concluding Remarks 3Q14 results support progression towards the target of c.2bn net profit for 2014 Comprehensive Assessment confirms capital strength and balance sheet resilience with CET1 capital buffer in excess of 10bn CET1 ratio fully loaded at 10.4% in 3Q14 Group Asset Quality trends c
Slide 32: Agenda
Agenda Group Core Bank Non Core Annex 32 UniCredit Group - INTERNAL USE ONLY -
Slide 33: Group - From tangible equity to CET1 capital fully loaded
Group - From tangible equity to CET1 capital fully loaded Description of main items as of September 30th 2014 Tangible Equity 45.9 CASHES not eligible as CET1 -0.6 Equity instruments recognized as AT1 capital subject to phase-out AT1 -1.9 Equity instruments recognized as AT1 capital Dividend acc
Slide 34: Group – Total exposure and Leverage Ratio
Group – Total exposure and Leverage Ratio Fully loaded total exposure, composition +101.6 -8.0 894.7 858.0 -5.4 -67.4 -74.1 +41.9 +33.6 744.7 +14.5 Balance Intangibles Derivatives SFT(1) Other Eligible SFT(1) Derivatives Off-balance Regulatory Total Sheet Assets Accounting Adjustments balance Regula
Slide 35: Group – P&L and Volumes
Group – P&L and Volumes Positive quarterly progression on track towards c.2bn net profit for 2014 Euro (mln) 3Q13 4Q13 1Q14 2Q14 3Q14 ∆ % vs. ∆ % vs. 9M13 9M14 ∆ % vs. 2Q14 3Q13 9M13 Total Revenues 5,662 5,770 5,578 5,733 5,551 -3.2% ▼ -2.0% ▼ 17,546 16,863 -3.9% ▼ Operating Costs -3,447 -3,746 -3,5
Slide 36: Core Bank – P&L and Volumes
Core Bank – P&L and Volumes Net Profit broadly up above 1bn with operational excellence on track and lower cost of risk largely offsetting seasonal slowdown of revenues Euro (mln) 3Q13 4Q13 1Q14 2Q14 3Q14 ∆ % vs. ∆ % vs. 9M13 9M14 ∆ % vs. 2Q14 3Q13 9M13 Total Revenues 5,528 5,631 5,481 5,700 5,473 -
Slide 37: Non Core – P&L and Volumes
Non Core – P&L and Volumes Quarterly loss broadly stable with higher LLP offsetting improved GOP Euro (mln) 3Q13 4Q13 1Q14 2Q14 3Q14 ∆ % vs. ∆ % vs. 9M13 9M14 ∆ % vs. 2Q14 3Q13 9M13 Total Revenues 135 139 98 33 79 138.8% ▲ -41.5% ▼ 552 209 -62.1% ▼ Operating Costs -145 -153 -172 -146 -141 -3.3% ▼ -2
UniCredit Group — Debt Investor Presentation (December 2014) on 6ix