Unicredit S.p.a. · MIL:UCG
Unicredit — Investor Day (December 2017)
29 slides from Unicredit's investor day presentation, Dec 12, 2017
Slide 1: One Bank, One UniCredit - Transform 2019 CFO presentation
One Bank, One UniCredit Transform 2019 CFO presentation M. Bianchi London, 12 December 2017
Slide 2: The five pillars
One Bank, One UniCredit The five pillars ONE BANK ONE 5 STRATEGIC PILLARS STRENGTHEN AND IMPROVE TRANSFORM MAXIMISE ADOPT LEAN OPTIMISE CAPITAL ASSET OPERATING MODEL COMMERCIAL BANK BUT STEERING QUALITY VALUE CENTRE 2
Slide 3: Transform 2019 key targets confirmed with an improved risk profile
Transform 2019 key targets confirmed with an improved risk profile Transform 2019 • 2019 revenues target confirmed: higher relative contribution of fees and commissions Transform 2019 • 2019 cost target confirmed: higher HR savings allowing for additional IT investments on track • 2019 RoTE target c
Slide 4: Eurozone: supportive economic outlook, rate increase expected 2H19
Supportive economic outlook whilst increase in rates now expected in 2H19 Macro Growth in line with consensus Interest rates and yield environment Real GDP growth y/y and average, % Bps, EoP 1Q 2Q 3Q 4Q 0 2.2 -14 1.8 1.8 -33 -33 1.5 2017 2018 2019 Avg. 2017-20191 Euribor 3M 1.2 Eurozone 0 -25 -26 20
Slide 5: Transform 2019 yielding tangible results underpinned by group-wide momentum
Transform 2019 yielding tangible results underpinned by group-wide business momentum Transform 2019 Achievements as of 9M17 • All announced decisive strategic actions successfully completed: 13bn rights >500bps generated by strategic actions Strengthen and issue, Pioneer and Pekao disposals optimise
Slide 6: Line adjustments from accounting changes (1/2)
Line adjustments from accounting changes (1/2) Line adjustments Accounting change1 Description Impact Net effect Combined effect New Bank of Italy regulation requires to NII in 2019 NPEs time value account for Time value release as NII and no €bn accounting2 longer as LLP write-back 0 LLP NII +0.2 I
Slide 7: Line adjustments from accounting changes (2/2)
Line adjustments from accounting changes (2/2) Line adjustments 2015 Transform 2019 targets Previous Delta Restated Previous Delta Restated P&L, €bn Revenues 19.9 0.5 20.4 20.4 0.2 20.6 of which NII 10.9 0.51 11.5 10.9 0.21 11.1 LLP -4.0 -0.51 -4.5 -2.4 -0.21 -2.6 Net income 1.5 0 1.5 4.7 0 4.7 Comb
Slide 8: 2019 key targets confirmed: RoTE >9%, further 4.0bn NPE reduction
2019 key targets confirmed RoTE target >9% and further 4.0bn reduction of NPEs Key targets 2018 2019 Line adjustment €bn, unless otherwise stated Revenues 20.1 20.6 +0.21 Cost -11.0 -10.6 unchanged LLP -2.6 -0.21 Net Income 4.7 unchanged Cost/income <55% <52% unchanged Cost of risk 68bps 55bps +6bps
Slide 9: 2019 overall revenues target confirmed: higher fees and commissions
2019 overall revenues target confirmed: higher relative contribution of fees and commissions P&L - Revenues Revenues target confirmed1 2019 different mix1 €bn €bn CAGR: +0.2% 2019 target confirmed 20.4 20.6 20.6 20.6 2.4 2.5 2.5 2.5 6.5 7.1 7.0 7.1 +0.1 \ -0.1 11.5 11.0 11.1 11.0 2015 2019 Restated
Slide 10: Increased fee target thanks to higher investment and transactional fees
Increased fee target thanks to higher investment and transactional fees P&L - Fees Fees and commissions mix evolution AuM penetration and dynamics in Italy €bn CAGR: +2.3% increased from previous target of 7.0bn 7.1 6.5 41% 33% 36% 5.0 AuM/TFA, % 148 111 123 2015 9M17 2019 AuM, €bn Investment Financ
Slide 11: NII target affected by lower for longer rates and less dynamic loan growth
NII target affected by lower for longer interest rate scenario and less dynamic loan growth P&L – NII NII evolution − Main components 2019 CAGR '15-19 loans4 net [xx]% updated: €bn €bn Lower by 0.1bn vs. previous 467 -12 target1 455 -11 444 11.5 0.3 0.5 11.0 10.2 0.3 -0.1 -0.1 -0.1 -0.2 Commercial d
Slide 12: 2019 cost target confirmed: adjusted mix with higher HR savings
2019 cost target confirmed: adjusted mix with higher HR savings P&L – Cost Cost reduction confirmed 2019 CAGR '15-19savings: adjusted mix updated: [xx]% €bn €bn 1.7 1.7 1.7bn annual recurring net cost savings 35% 30% 2019 target 12.2 confirmed -1.2 10.6 65% 70% -0.5 4.8 4.3 Previous New Non-HR Cost
Slide 13: FTE and branch reductions ahead of schedule
FTE and branch reductions ahead of schedule P&L – Cost HR costs evolution Non-HR costs evolution €bn €bn CAGR: -4.2% 7.5 -4.7% 6.3 CAGR: -2.8% 5.5 5.2 4.8 -2.5%1 4.3 3.4 3.4 2015 9M16 9M17 2019 2015 9M16 9M17 2019 -14k / -14% -944 Branches2, FTE, # '000 101 99 94 87 3,809 3,629 3,252 2,865 51% achie
Slide 14: Improved NPE ratio thanks to decisive de-risking actions
Improved NPE ratio thanks to decisive de-risking actions Risk – Ratios NPE1 UTP1 Bad Loans1 % 16.0 15.2 CoR evolution2 Gross Ratio 10.6 5.2 bps 4.6 10.2 10.1 7.8 4.3 103 2019 target 2.9 6.1 confirmed 4.7 68 55 2015 9M16 9M17 2019 2015 9M16 9M17 2019 2015 9M16 9M17 2019 2015 2018 2019 Coverage Ratio
Slide 15: Gross NPEs down by a further 4.0bn by end 2019
Gross NPEs down by a further 4.0bn by end 2019, better than initial Transform 2019 target Asset Quality Group Core – NPEs evolution1 Non Core evolution1 Gross NPEs, €bn Gross loans, €bn 2.0bn better than FINO phase 2 previous target of 56.3 25.1bn signed5 6.7 2.0bn better 25.2 23.1 1.5 22.5 than pre
Slide 16: 2019 CET1 ratio target confirmed and FY19 dividend payout increased to 30%
2019 fully loaded CET1 ratio target confirmed and FY19 dividend payout increased from 20% to 30% Capital Fully loaded CET1 ratio evolution to 2019, % % 9M17 4Q17 2018 2019 Regulation, models and -0.4 -0.1 -0.31 -0.3 Confirmed procyclicality expected regulatory impacts IFRS92 -0.4 of -1.5 EBA guideli
Slide 17: Cumulative organic capital generation above estimated regulatory impacts post 2019
Cumulative organic capital generation above estimated regulatory impacts post 2019 Regulatory Headwinds post 2019 – CET1 ratio impact (managerial estimates) Estimated % of cumulative phase-in CET1 impact, % 2020 2021 2022 2023 2024 2025 up to 2027 EBA guidelines (remaining) -0.9 20% 100% Calendar pr
Slide 18: SREP Pillar 2 requirement lowered by 50bps to 200bps
SREP Pillar 2 requirement lowered by 50bps to 200bps, CET1 MDA buffer above 250bps after 2019 Capital – Requirements Capital evolution1 % CET1 ratio Tier 1 Capital ratio Total Capital ratio 16.1/16.5 >16.0 3.4/3.8 >2.4 13.7/14.2 >14.0 12.2/12.7 >12.5 Lower Pillar 2 >2.4 3.0/3.5 >2.4 Requirement 3.0/
Slide 19: Optimised TLAC funding plan
Optimised TLAC funding plan TLAC 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 requirement1: >19.6% >20.5% 18.3 26.3 Senior outst. TLAC eligible2 2.5% Senior bond 20.0 5.8 Senior Pre
Slide 20: 2019 Group Core profitability above 10%
2019 Group Core profitability above 10% Group Core profitability 2019 Group profitability 2019 Non Core Allocated Capital to cover all future losses Allocated 13.2 4.5 2.8 11.9 11.6 4.3 3.5 3.5bn Capital1, until final rundown…. €bn 12.9 13.3 13.4 11.7 ..hence, Group Core represent future normalised
Slide 21: 2019 key targets confirmed
2019 key targets confirmed Key targets 2015 9M17 2018 2019 Revenues, €bn 20.41 20.11 20.61 Cost, €bn -12.2 -11.0 -10.6 Net income, €bn 1.5 4.7 Cost/income, % 60.01 57.9 <551 <521 Cost of Risk, bps 1031 54 681 551 RoTE, % 4 82 >9 CET1 ratio,% 10.4 13.8 12.2 / 12.7 >12.5 RWA, €bn 361 350 406 down by 4
Slide 22: Closing remarks
Closing remarks Closing remarks Transform 2019 yielding tangible results underpinned by group-wide business momentum 2019 key targets confirmed Gross NPEs down by a further 4.0bn by end 2019, better than initial Transform 2019 target Self-funded full rundown of Non Core by 2025 SREP Pillar 2 require
Slide 23: Annex
Annex 23 NY
Slide 24: Key financial targets 2019 by Division
Key financial targets 2019 by Division KPIs Commercial Commercial Commercial Banking Banking Banking CEE CIB GCC1 Non Core Italy Germany Austria Revenues, 2.5 1.6 4.4 3.9 0.0 €bn 7.5 0.0 Costs, 1.7 1.0 1.6 1.6 €bn 4.0 0.4 0.1 C/I, 52.6 67.0 63.3 36.9 40.2 n.m. n.m. % CoR, 58 15 16 102 21 bps 0 n.m.
Slide 25: Non Core - key financial targets
Non Core - key financial targets Non Core 2015 9M17 2019 P&L, €bn Revenues 0.0 -0.1 0.0 Gross Operating Profit -0.1 -0.2 -0.1 Loan Loss Provision -1.7 -0.6 -0.6 Net income -1.3 -0.6 -0.5 Others Gross Loans, €bn 63.4 32.5 17.2 Net Loans, €bn 35.8 15.6 7.4 NPE Coverage, % 52.4 57.1 > 57 25 1. 2015, 9M
Slide 26: Transparency on sector-wide regulatory headwinds up to end 2019 and beyond
Transparency on sector-wide regulatory headwinds1 up to end 2019 and beyond Regulatory headwinds Regulation, models and Model changes, recalibrations and other impacts from regulation procyclicality During Transform IFRS9 First time adoption of Fair Value accounting and new provisioning rules 2019 p
Slide 27: New SREP Pillar 2 Requirement lowered by 50 bps to 200bps
New SREP Pillar 2 Requirement lowered by 50 bps to 200bps Capital – Requirements CET1 requirements T1 requirements2 Total Capital requirements Pillar 2 Guidance MDA MDA 10.07% 11.57% level 13.57% level (P2G) Pillar 2 Guidance 10.70% 12.70% MDA level (P2G) 9.20% 3.57% 3.57% Regulatory 3.57% Regulator
Slide 28: Strong and disciplined liquidity management
UniCredit Group: strong and disciplined liquidity management Liquidity Group ample liquidity buffer Funding plan adequately on track 9M17 strong liquidity buffer Compliant with key liquidity ratios 2017 M/L term funding plan by region €bn 26.9bn 195 LCR NSFR Additional eligible assets available with
Slide 29: 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