Fixed Income Presentation 2Q18 and 1H18 Results Milan, 7 August 2018
Agenda UniCredit at a glance 1 Transform 2019 update 2 2Q18 P&L results 3 Asset quality 4 Capital position 5 Funding & Liquidity 6 2
Resilient commercial dynamics delivering sustainable results 2 3 4 5 6 1 UniCredit at a glance Transform 2019 is fully on track, delivering sustainable results. Strong Core Bank performance with 1H18 Group Core net profit at 2.6bn, up 4.2% 1H/1H vs. adjusted (1) . 1H18 Group Core RoTE at 10.9%, up 0.2p.p. 1H/1H vs. adjusted (1) . FY19 Group Core RoTE target >10% confirmed Resilient underlying Group revenues with net interest up 1.6% Q/Q and fees down 0.3% Y/Y. Positive commercial dynamics with higher lending volumes (+9.0bn Q/Q Group Core) and positive net AuM sales (+3.2bn in 2Q18 Group) despite challenging markets Operating model transformation progressing ahead of schedule. Achieved 87% of FTE reduction target and 84% of branch closure target. FY18 Group costs below 11.0bn and FY19 10.6bn cost target confirmed Accelerated Non Core rundown proceeding as planned. 2Q18 Non Core gross NPEs at 22.2bn, new target 19bn for year end 2018 2Q18 Group Core gross NPE ratio down 85bps Y/Y to 4.4%. FY18 Group CoR expected to be below 68bps 2Q18 Group CET1 ratio at 12.51%. CET1 ratio for year end 2018 confirmed between 12.3% and 12.6%. 2019 CET1 ratio target confirmed >12.5%. CET1 ratio target for year end 2018 and 2019 are both assuming BTP spreads remain at current levels (2) UniCredit: a pan-European winner 1. Group and Group Core adjusted net profit and RoTE exclude the net impact of the Pekao disposal (-310m 2Q17) and the net profit from Pekao and Pioneer (+48m in 1Q17, +73m in 2Q17). RoTE calculated at CMD perimeter, taking into account the capital increase and Pekao and Pioneer disposals as of 1 January 2017 2. As of 29 June 2018. BTP sensitivity: +10bps parallel shift of BTP 3 asset swap spreads has a -3.8bps (or -137m) pre and -2.6bps (or -95m) post tax impact on the fully loaded CET1 ratio (capital)
UniCredit: a simple successful pan-European Commercial Bank with a fully plugged in CIB, delivering a unique Western, Central & Eastern European network 2 3 4 5 6 1 UniCredit at a glance 26.1 million clients (1) Commercial Banking model delivering unique Western, Central and Eastern 81% revenues from European network to extensive Retail and Corporate client franchise Commercial Banking (2) Commercial Banks with "One Bank" business model replicated across full network, driving synergies leadership position (3) in and streamlined operations 12 out of 14 countries (4) € 1.3bn CIB fully plugged into Commercial Banking , enabling cross-selling and joint CIB-Commercial synergies across business lines and countries Banking revenues (5) Low risk profile business model benefiting from diversification and a more 51% revenues stable macro/regulatory environment outside Italy 1. Data as of 2Q18 includes 100% clients in Yapi 2. Business division revenues as of 1H18: CB Italy, CB Germany, CB Austria, CEE and Fineco 3. Data as of 4Q17, ranking between #1 and #5 of market share in terms of total assets according to local accounting standard 4. Austria, Bosnia, Bulgaria, Croatia, Czech Republic, Germany, Hungary, Italy, Romania, Serbia, Slovakia, Slovenia 5. Data as of 4 June 2018 includes revenues from GTB, ECM, DCM, M&A, Markets products from Commercial Banking clients and structured finance products from Corporate Sources: for total assets, central bank statistics, if available, or local company reports
Strong competitive advantage across countries and products 2 3 4 5 6 1 UniCredit at a glance Strong local "Go to" bank for European "Mittelstand" Best-in-class Commercial Banks Corporates CIB product provider # clients, m (1) Rank by assets in Loans to corporates in EU zone, € bn (4) EMEA rankings (5) Europe (2) 2 1 Italy All Bonds in Italy and Germany (5) 8.9 Peer 1 3 Germany 1.6 1 Syndicated Loans in Italy, Austria, CEE (5) 1 Austria 1.6 UniCredit CEE 1 14.0 2 EMEA Bonds in Euro by # of transactions (5) Revenues by geography (3) Peer 2 Awards CEE 20% Peer 3 • #1 Global Trade Finance Best Services Provider in 2018 (6) • #1 in CEE, Bosnia & Herzegovina, Bulgaria, Croatia, 49% Italy Hungary, Italy, Romania, Serbia and Turkey in 2018 (6) Austria 9% • #1 Bank for Trade Finance in Austria, Peer 4 Bulgaria, Croatia and CEE in 2018 (7) • #1 Supply Chain Finance Provider in CEE in 2018 (7) 21% • #1 Bank for Liquidity Management Western Europe and in CEE, in Italy and in Austria in 2018 (7) Peer 5 Germany • #1 Sub-custodian Bank in CEE, Austria, Bulgaria, Czech Republic, Serbia and Slovenia in 2018 (7) 1. Data as of 2Q18 includes 100% clients on Yapi 2. Data as of FY17 based on available public data. For Germany, only private banks, for CEE compared to Erste, KBC, Intesa Sanpaolo, OTP, RBI (data as of FY17) 3. Data as of 1H18 based on regional view 4. Data as of 2Q18 based on available public data; peers include: BNP Paribas, Deutsche Bank, Intesa Sanpaolo, Santander, Société Générale 5. 5 Dealogic as of 4 July 2018; period: 1 Jan – 30 Jun 2018. All Syndicated Loans in Euro, All EMEA Bonds in Euro 6. Source: www.euromoney.com 7. Source: www.gfmag.com
Agenda UniCredit at a glance 1 Transform 2019 update 2 2Q18 P&L results 3 Asset quality 4 Capital position 5 Funding & Liquidity 6 6
UniCredit key targets 1 3 4 5 6 2 Transform 2019 update 2Q18 1H18 2018 2019 2015 20.4 4.9 10.1 20.1 20.6 Revenues, € bn -12.2 -2.7 -5.4 -11.0 -10.6 Cost, € bn Net Income, € bn 1.5 1.0 2.1 4.7 Cost/income 60.0% 53.7% 53.6% <55% <52% Cost of Risk 103bps 45bps 45bps 68bps 55bps RoTE 4% 8.5% 8.7% >9% CET1 FL ratio 10.4% 12.51% 12.51% 12.3-12.6% >12.5% RWA, € bn 361 360.7 360.7 406 Group Gross NPEs, € bn 77.8 42.6 42.6 37.9 Non Core Gross NPE, € bn 52.0 22.2 22.2 19 14.9 Group Gross NPE Ratio 16.0% 8.7% 8.7% 7.5% Group Core Gross NPE Ratio 6.1% 4.4% 4.4% 4.7% Group Net NPEs, € bn 38.3 16.7 16.7 16.6 7
Transform 2019 achievements (1/2) 1 2 3 4 5 6 Transform 2019 update • 2Q18 Group fully loaded CET1 ratio at 12.51%, impacted by -35bps from FVOCI (1) STRENGTHEN AND • Fully loaded CET1 ratio for year end 2018 confirmed between 12.3% and 12.6% (2) Strong capitalisation OPTIMISE CAPITAL • 2019 fully loaded CET1 ratio target confirmed >12.5% (2) • 2Q18 Group gross NPE ratio improved to 8.7% (-243bps Y/Y) with Group gross NPEs Ongoing de-risking down 10.2bn Y/Y and 2.0bn Q/Q, of which 1.1bn (3) disposals in 2Q18 IMPROVE • Group Core gross NPE ratio 4.4% down 85bps Y/Y, getting closer to the EBA average (4) ASSET Accelerated QUALITY Non Core rundown • Accelerated Non Core rundown proceeding as planned. 2Q18 Non Core gross NPEs at by 2021 22.2bn, new target 19bn for year end 2018 • 58 branch closures Q/Q and 790 since December 2015 in Western Europe. 84% of 944 TRANSFORM Branch and FTE Transform 2019 target achieved OPERATING reductions ahead of • FTEs down by 1,725 Q/Q and 12,312 since December 2015. 87% of the 14k Transform MODEL schedule 2019 target achieved 1. In 2Q18 CET1 ratio impact from FVOCI -35bps, o/w -30bps due to BTP spread widening 2. At current BTP spread levels as of 29 June 2018. BTP sensitivity: +10bps parallel shift of BTP asset swap spreads has a -3.8bps (or -137m) pre and -2.6bps (or -95m) post tax impact on the fully loaded CET1 ratio (capital) 3. Of which 0.5bn in Non Core 4. Weighted average of EBA sample banks is 3.9%. 8 Source: EBA risk dashboard (data as of 1Q18)
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