Fixed Income Presentation 3Q19 and 9M19 Results Milan, 7 November 2019
Agenda UniCredit at a glance 1 Transform 2019 update 2 3Q19 results 3 Asset quality 4 Capital 5 Funding & Liquidity 6 2
3Q19 net profit at 1.1bn, CET1 ratio at 12.60% 1 2 3 4 5 6 UniCredit at a glance Strong quarterly results with no exceptional items. Resilient commercial dynamics • 3Q19 Group stated net profit of 1.1bn equal to 3Q19 Group adjusted net profit, up 25.7% Y/Y (1),(2) • 9M19 adjusted Group Core RoTE at 10.6% up 0.2p.p. 9M/9M (2) . 9M19 adjusted Group RoTE at 8.7% up 0.4p.p. 9M/9M (2) Focused execution of Transform 2019 continues to deliver tangible results • Net FTE and branch reduction targets achieved • 3Q19 costs at 2.5bn, down 1.8% Y/Y. FY19 costs of 10.1bn confirmed • 3Q19 Group gross NPE ratio at 5.7% (3) . 3Q19 Non Core gross NPEs 11.2bn, down 9.3bn Y/Y • 3Q19 NPE disposals of 5.4bn (3) , including 4.1bn of residential mortgages Solid capital position and successful execution of mitigation actions (4) • 3Q19 CET1 ratio at 12.60% (5) , MDA buffer of 252bps. 3Q19 TLAC ratio 21.85% (6) , MDA buffer of 226bps • 3Q19 tangible equity up 1.7% Q/Q to 51.6bn, TBVpS up 1.7% Q/Q to 23.1 (1) Y/Y change refers to adjusted net profit. (2) Group and Group Core adjusted net profit and RoTE exclude net impacts from the impairment of Yapi (-846m in 3Q18), disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal -178m and others -173m (o/w -151m Core and -22m Non Core)). (3) Figures as of 3Q19 benefit from IFRS5 classification of a NPL residential mortgage portfolio in Italy of 4.1bn (gross book value). (4) Including disposal of real estate in 1Q19, Fineco in 2Q19 and 3Q19. 3 (5) Including +31bps from 3Q19 Fineco disposal as per guidance. (6) 3Q19 TLAC ratio 21.85%, o/w 19.37% TLAC subordination ratio and 2.5% senior preferred exemption.
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 25.5 million clients (1) Commercial Banking model delivering unique Western, Central and Eastern 80% 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 (4) out of 14 countries € 2.2bn 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 53% revenues stable macro/regulatory environment outside Italy (6) (1) Data as of 3Q19 includes 100% clients in Yapi. (2) Business division revenues as of 9M19: CB Italy, CB Germany, CB Austria, CEE. (3) Data as of 2Q19, ranking between #1 and #5 in terms of total assets according to local accounting standards. (4) Austria, Bosnia, Bulgaria, Croatia, Czech Republic, Germany, Hungary, Italy, Serbia, Slovakia, Slovenia, Turkey. 4 (5) Data as of September 2019 include revenues from GTB, ECM, DCM, M&A, Factoring, Markets products from Commercial Banking clients and structured finance products from Corporate clients. (6) Data as of 9M19 based on regional view.
Strong competitive advantage across countries and products 2 3 4 5 6 1 UniCredit at a glance 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 EMEA rankings (5) Loans to corporates in Eurozone, € bn (4) Europe (2) All Bonds in Euro in Italy, Germany and 1 2 Italy Austria (5) 7.6 Peer 1 3 Germany 1 1.6 Syndicated Loans in Italy, Austria and CEE (5) 1 Austria 1.6 UniCredit 2 EMEA Bonds in Euro by # of transactions (5) 1 CEE 14.7 Peer 2 Revenues by geography (3) Awards 6 CEE Peer 3 Euromoney Cash Mgmt 2019: 22% • Market Leader: CEE, AT, BA, BG, HR, HU, IT, RO, RS, SK, SI, TK Peer 4 47% Italy • Best Service provider: AT, BA, Austria 10% HR, DE, IT, RO, RS, SK, SI Peer 5 21% The Banker 2019: • Transaction Banking award Germany Peer 6 for Western Europe (1) Data as of 3Q19 includes 100% clients on Yapi. (2) Data as of 3Q19 based on available public data. For Germany, only private banks, for CEE compared to Erste, KBC, Intesa Sanpaolo, OTP, RBI, SocGen, UC data incl. Yapi pro quota, for Austria ranking as of FY18 . (3) Data as of 3Q19 based on regional view. (4) Data as of 3Q19, where available (otherwise as of 2Q19), based on available public data; peers include: BNP, Deutsche Bank, Santander, HSBC, ISP, Société Générale. FX exchange rate at 30 September 2019 5 (5) Source: Dealogic, as at 1 October 2019. Period: 1 January – 30 September 2019; rankings by volume, unless otherwise stated. (6) Source: www.euromoney.com; https://www.thebanker.com/Awards/Transaction-Banking-Awards
Agenda UniCredit at a glance 1 Transform 2019 update 2 3Q19 results 3 Asset quality 4 Capital 5 Funding & Liquidity 6 6
UniCredit 2019 key targets 1 2 3 4 5 6 Transform 2019 update 2015 2 3Q19 9M19 2019 3 Revenues, € bn 20.4 4.7 14.0 18.7 Costs, € bn -12.2 -2.5 -7.4 -10.1 Net profit, € bn 1.5 1.1 4.3 Adjusted net profit (1) , € bn 1.1 3.3 4.7 60.0% 52.1% 53.0% 53-54% Cost/Income 103bps 47bps 49bps 55bps Cost of risk 4% 8.6% 8.7% >9% RoTE (1) 10.4% 10.6% >10% Group Core RoTE (1) 10.4% 12.60% 12.60% FL CET1 ratio CET1 MDA buffer, bps 252 252 200-250 RWA, € bn 361 388 388 404 Group gross NPEs, € bn 77.8 28.8 28.8 <33 Non Core gross NPEs, € bn 52.0 11.2 11.2 <10 Group gross NPEs ratio 16.0% 5.7% 5.7% <6.7% Group Core gross NPEs ratio 6.1% 3.6% 3.6% 4.7% (1) Group and Group Core adjusted net profit and RoTE exclude net impacts from disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal - 178m and others -173m (o/w -151m Core and -22m Non Core)). 7 (2) Data recasted as FY 2018 perimeter. Fineco included in FY2018 perimeter. (3) FY 2019 targets
Transform 2019 achievements (1/2) 1 2 3 4 5 6 Transform 2019 update FY19 CET1 ratio • 3Q19 CET1 ratio at 12.60%. MDA buffer of 252bps guidance confirmed • 2019 CET1 MDA buffer confirmed at the upper end of target range of 200-250bps (1) by year end STRENGTHEN TLAC guidance AND OPTIMISE • 3Q19 TLAC ratio 21.85% (2) , MDA buffer of 226bps, well above the target of being at the confirmed CAPITAL upper end of 50-100bps range, also thanks to pre-funding • Successful pre-funding of TLAC with 1.25bn Tier 2 placement with a coupon of 2.0%, at TLAC pre-funding at tight spread 240bps (3) , the tightest issue spread for UniCredit's Tier 2 since 2011 Group gross NPE ratio • 3Q19 Group gross NPE ratio improved to 5.7% (-264bps Y/Y) (4) with Group gross NPEs below 6% down 12.0bn Y/Y and 5.7bn Q/Q, of which 5.4bn (4),(5) disposals in 3Q19 IMPROVE ASSET QUALITY • Group Core gross NPE ratio 3.6% (4),(6) , down 78bps Y/Y, well below FY19 4.7% target FY19 Non Core gross • FY19 Non Core gross NPEs below 10bn NPEs below 10bn Transform 2019 • Transform 2019 Western European branch closure target achieved. Branches down by 19 TRANSFORM branch and FTE targets Q/Q achieved OPERATING • Transform 2019 net FTE reduction target of 14,000 achieved. FTEs down by 184 Q/Q MODEL • FY19 cost confirmed at 10.1bn, materially better than original Transform 2019 target FY19 costs confirmed (1) Assuming BTP spreads remain at 3Q19 levels. (2) 3Q19 TLAC ratio 21.85%, o/w 19.37% TLAC subordination ratio and 2.5% senior preferred exemption. (3) Over mid swap of equivalent maturity. (4) Figures as of 3Q19 benefit from IFRS5 classification of a NPL residential mortgage portfolio. (5) Of which 4.0bn in Non Core. 8 (6) Weighted average "NPL" ratio of EBA sample banks is 3.0%. Source: EBA risk dashboard (data as at 2Q19). UniCredit's definition of "NPE" ratio is more conservative than EBA. Comparable "NPL" ratio for UniCredit at 3Q19 would be 3.2% for Group Core.
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