Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (February 2021)
46 slides from Unicredit's debt investor presentation, Feb 11, 2021
Slide 1: Fixed Income Presentation 4Q20 and FY20 Results
Fixed Income Presentation 4Q20 and FY20 Results 11 February 2021
Slide 2: Agenda
Agenda Executive summary UniCredit at a glance Group P&L Group balance sheet Funding & liquidity ESG 2
Slide 3: FY20 underlying net profit of 1.3bn on lower costs and better provisions
FY20 underlying net profit of 1.3bn on lower costs and better provisions Executive summary – Highlights FY20 underlying net profit1 1.3bn, ahead of guidance of >0.8bn thanks to better costs and LLPs FY20 stated net loss of 2.8bn driven by Yapi deconsolidation2, integration costs in Italy2 and CIB go
Slide 4: Proposed capital distribution of 1.1bn, of which 0.3bn cash dividend and 0.8bn via share buyback
Proposed capital distribution(a) of 1.1bn, of which 0.3bn cash dividend and 0.8bn via share buyback Executive summary – Group key figures %∆ vs %∆ vs %∆ vs FY19 FY20 4Q19 3Q20 4Q20 FY19 3Q20 4Q19 Revenues, bn 18.8 17.1 -9.0% 4.9 4.4 4.2 -2.7% -12.6% Costs, bn -9.9 -9.8 -1.2% -2.5 -2.4 -2.5 +2.0% -2.
Slide 5: Agenda
Agenda Executive summary UniCredit at a glance Group P&L Group balance sheet Funding & liquidity ESG 5
Slide 6: A simple successful Pan European Commercial Bank
A simple successful Pan European Commercial Bank UniCredit at a glance Commercial focus1 Pan European footprint Commercial Banks >17 Revenues, bn 415 Customer loans2, bn International branches and representative offices4 Italy3 21% 23% 32% Western Europe 15% 57% CEE 20% 10% 21% CIB Austria Germany 1
Slide 7: Strong contribution from CIB and CEE to FY20 underlying net profit
Strong contribution from CIB and CEE to FY20 underlying net profit FY20 underlying net profit Underlying net profit1 by division FY20, m 1,264 1,002 671 191 8 25 -113 -520 CB Italy CB Germany CB Austria CEE CIB Group CC Non Core Group (a) Underlying FY20 RoAC2 0.1% 4.0% 0.6% 7.8% 9.2% n.m. n.m. ▪ CI
Slide 8: Agenda
Agenda Executive summary UniCredit at a glance Group P&L Group balance sheet Funding & liquidity ESG 8
Slide 9: Significant LLPs taken in FY20 in anticipation of future impacts
Significant LLPs taken in FY20 in anticipation of future impacts Group P&L - Summary Data in m ∆ % vs ∆ % vs FY19 FY20 ∆ vs FY19 4Q19 3Q20 4Q20 3Q20 4Q19 Total revenues 18,839 17,140 -9.0% 4,850 4,354 4,238 -2.7% -12.6% Operating costs -9,929 -9,805 -1.2% -2,525 -2,410 -2,458 +2.0% -2.6% Gross opera
Slide 10: NII down 2.3% Q/Q on lower lending contribution, partially offset by TLTRO3
NII down 2.3% Q/Q on lower lending contribution, partially offset by TLTR03 Group P&L – Net Interest Q/Q Net interest1 Q/Q, m -6.3% Average Euribor 3M -0.52% (-5bps Q/Q) 10,071 -10.3% 9,441 -2.3% 2,508 2,303 2,250 -47 -54 +12 +24 +39 -5 -21 Commercial dynamics: -27m FY19 FY20 4Q19 3Q20 Performing lo
Slide 11: Fees up 2.5% Q/Q driven by investment and financing fees
Fees up 2.5% Q/Q driven by investment and financing fees Group P&L - Fees Fees, m -7.6% FY/FY Q/Q Y/Y -5.2% +2.5% 6,304 1,629 5,976 1,469 1,506 Investment 2,352 635 fees 2,246 -4.5% 546 592 8.4% -6.8% Financing 1,687 1,607 -4.7% 429 371 7.0% -7.6% fees 397 Transactional 2,266 2,123 -6.3% 565 552 518
Slide 12: Trading income excluding XVA normalising towards year end
Trading income excluding XVA normalising towards year end Contribution from dividends down FY/FY following strategic disposals Group P&L - Trading and dividends Trading income, m Dividends1, m -15.4% 1,669 -9.6% 1,412 -34.8% -6.4% 1,424 -6.8% 472 455 637 Client 426 driven XVA2 107 110 74 XVA2 -3.1%
Slide 13: FY20 costs down 1.2% FY/FY thanks to strict cost discipline and lower HR costs
FY20 costs down 1.2% FY/FY thanks to strict cost discipline and lower HR costs, more than offsetting Covid-19 related expenses Group P&L - Costs Trading income, m Costs, m -2.6% +2.0% -1.2% FY/FY Q/Q Y/Y 9,929 9,805 2,525 2,458 2,410 Non HR costs1 3,783 3,837 1.4% Non HR costs1 976 7.7% 2.7% 931 1,0
Slide 14: FY20 stated CoR at 105bps at lower end of guidance range
FY20 stated CoR at 105bps at lower end of guidance range Group P&L - LLPs and CoR Loan loss provisions(a), m Cost of risk(a), bps Specific Overlays Regulatory Specific Overlays Regulatory LLPs(b) on LLPs(c) headwinds CoR(b) on CoR(c) headwinds +117bps 4,996 105 179 Regulatory 572 headwinds 12 Regula
Slide 15: Agenda
Agenda Executive summary UniCredit at a glance Group P&L Group balance sheet Funding & liquidity ESG 15
Slide 16: Increase in gross NPEs driven by proactive groupwide UTP classification
Increase in gross NPEs driven by proactive groupwide UTP classification Group balance sheet - Group excluding Non Core asset quality Group excluding Non Core - Non performing exposures1, bn o/w Gross bad loans, bn -25.5% +5.1% -11.2% +4.3% 7.5 6.3 5.6 17.6 Net bad 16.7 16.8 loans 2.1 1.9 1.4 4Q19 3Q
Slide 17: FY20 Non Core NPEs materially better than target thanks to disposals
FY20 Non Core NPEs materially better than target thanks to disposals Group balance sheet - Non Core asset quality Non Core - Non performing exposures1, bn Actions on Non Core rundown, bn 4Q20 FY20 -57.0% Disposals 1.42 3.4 8.6 -37.2% Recoveries and 5.9 repayments 0.2 0.5 3.7 <4.3 Write-offs 0.6 1.0
Slide 18: Expected loss on stock and new business
Expected loss(a) on stock and new business Group balance sheet - Expected loss Underlying expected loss on new business 1, bps FY20 underlying expected loss – new business distribution, bps Avg EL> 100 32 25 <Avg EL< 100 25(b) 25(b) 17% 4% 79% FY19 9M20 FY20 Avg EL< 25 Underlying expected loss on st
Slide 19: Gross loans breakdown by stages
Gross loans breakdown by stages Group balance sheet - Loan book by stage Gross loans1 and provisions EoP, bn o/w Gross NPE Stage 3 Stage 3 (% of Gross loans) 5.0% 4.7% 4.5% 502 4Q19 3Q20 4Q20 484 Stage 3 25 467 Coverage 23 ratio 65.2% 61.3% 59.8% Stage 2 44 21 67 83 Stage 1 and 2: Stage 2 o/w Stage
Slide 20: Asset quality by division
Asset quality by division Group balance sheet - Asset quality by division Net flows to NPEs, recoveries and write-offs – FY20, m Recoveries 555 375 305 420 294 1,932 Write-offs 371 134 206 193 327 1,235 6,389 2,201 1,659 1,175 7,783 Inflows 963 2,899 387 to NPE 1,792 1,456 1,102 527 -699 -134 -282 O
Slide 21: Loan book by sector
Loan book by sector Group balance sheet - Loan book by sector 4Q20 gross performing customer loans EoP(a) Rating distribution1 Sector 446bn 10% focus of next Non page Sectors Covid-19 impact (selection) Investment Grade 14% ▪ High Impact (10%) – Transport, travel & airline 26% – Shipping 17% – Touri
Slide 22: Loan book by sector deep dive
Loan book by sector deep dive Group balance sheet - Loan book by sector 4Q20 gross performing customer loans EoP(a) Country distribution High impact sector (exhaustive) Rating distribution1 10% 0% 0% Gaming 1% Airline CEE Shipping Non 1% Investment Textiles 17% Grade Automotive suppliers 1% 30% Ital
Slide 23: Moratoria
Moratoria Group balance sheet - Risk story - Moratoria Moratoria1 Rating Outstanding Outstanding as % of Expired Country2 Segment total loan portfolio distribution1 volume, bn volume, bn Individuals 4.3 1.4 Non Investment Grade Enterprises 15.1 2.1 30% Investment Grade 70% Total 19.4 11.4% 3.5 Indiv
Slide 24: Moratoria: expiration dates and volumes in Italy and CEE
Moratoria: expiration dates and volumes in Italy and CEE Group balance sheet - Moratoria expirations Expiring volumes1, bn ITA CEE CEE 17.5 o/w: 1.4bn Hungary 1.7 o/w: 9.9bn Enterprises 3.6bn Leasing o/w: 2.3bn Individuals 0.4bn Croatia 3.0 15.7 0.5 o/w: 0.6bn Croatia o/w: o/w: o/w: 0.3bn Individual
Slide 25: State guaranteed volumes
State guaranteed volumes Group balance sheet - State guarantees State guarantee programmes UniCredit1 Covered by Guarantee Banking system Granted volume, guarantee1 Country2 Clients, k scheme size, bn utilisation3, bn bn 13% 450(a) 129 154.3 15.6 87% 15% 822(a) 36 3.9 3.3 85% 20% 150(a) 7 1.1 0.8 80
Slide 26: 4Q20 pro-forma CET1 MDA buffer at 605bps
4Q20 pro-forma CET1 MDA buffer at 605bps Group balance sheet - CET1 Fully loaded Common Equity Tier 1 ratio, % MDA buffer 1 Fully loaded, bps 538 611 6051 +48bps 15.14% 15.08% +37bps -15bps -6bps 14.41% +6bps +3bps Regulatory Headwinds: -5bps FVOCI: +5bps Regulatory Headwinds: +25bps FX: +3bps +25bp
Slide 27: Group – High absolute level of capital and leverage ratio compared to peers
Group – High absolute level of capital and leverage ratio compared to peers Group balance sheet - Group Peer CET1 Fully loaded CET1 capital1, bn 113.8 4Q20 88.8 66.8 3Q20 41.4 41.8 44.7 45.3 47.8 49.1 51.1 24.8 26.6 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 UniCredit2 Peer 8 Peer 9 Peer 10 Pe
Slide 28: Agenda
Agenda Executive summary UniCredit at a glance Group P&L Group balance sheet Funding & liquidity ESG 28
Slide 29: Well diversified and centrally coordinated funding and liquidity profile
Well diversified and centrally coordinated funding and liquidity profile Funding & Liquidity - Diversified funding and liquidity profile ✓ UniCredit SpA. acts as the Group Holding as well as the Italian operating bank and is the TLAC/MREL issuer under Single-Point-of- Entry (SPE) ✓ Coordinated Group
Slide 30: Strong and disciplined liquidity steering
Strong and disciplined liquidity steering Funding & Liquidity - Strong and liquidity steering 4Q20 strong liquidity buffer 1, bn 4Q20 Compliant with key liquidity ratios, % 273 Additional eligible assets available 20 Group LCR3 Group NSFR4 within 12 months 2 178% >100% Cash and Deposits with Central
Slide 31: 4Q20 pro-forma TLAC buffer at 737bps
4Q20 pro-forma TLAC buffer at 737bps Funding & Liquidity - TLAC Transitional Total Loss-Absorbing Capacity, % Buffer Regulatory requirement Actual data 26.97% 26.92% -5bps 24.47% 2.50% 3.75% 743bps 737bps 743bps 2.50% 15.14% 15.96% 2.26% +82bps 611bps 693bps 19.54% 19.54% 17.04% 9.03%1 9.03%1 4Q20 A
Slide 32: 2021 TLAC/MREL funding plan
2021 TLAC/MREL funding plan Funding & Liquidity - TLAC/MREL funding plan UniCredit SpA 2021 TLAC/MREL funding plan, bn Main drivers Already To be ▪ In January 2021 UniCredit SpA has already successfully issued in issued in issued 2bn dual tranche Senior Preferred (in 5Y and 10Y 20212 2021 format), t
Slide 33: Rating agencies acknowledge financial/capital strength
Rating agencies acknowledge financial/capital strength Funding & Liquidity - Credit Rating overview BBB/Stable/A-21 Baa3/Stable/P-31 BBB-/Stable/F31 Covered Bonds (Italian OBGI/OBGII)2,3 AA-/n.r. Aa3/Aa3 AA-/n.r. Counterparty/Deposit rating 4 BBB+ Baa1 BBB Senior Preferred / Outlook/ Short-Term BBB/
Slide 34: Agenda
Agenda Executive summary UniCredit at a glance Group P&L Group balance sheet Funding & liquidity ESG 34
Slide 35: Strong footprint in Environmental, Social and Governance
Strong footprint in Environmental, Social and Governance Revised coal policy ESG – ESG Achievements Figures as of FY20 E S G Environmental Social Governance 64.4bn of green/sustainable/ESG-linked loans 23.7bn social bonds for UniCredit customers, 11 Strong involvement of top management for our custo
Slide 36: Delivering on commitment to sustainability with clear ESG roadmap
Delivering on commitment to sustainability with clear ESG roadmap ESG - Roadmap 4Q19 1Q20 2Q20 3Q20 4Q20 Confirmed in Sustainability targets part of Revised coal policy with coal G E G Bloomberg Gender senior management remuneration sector total phase out by 2028 Equality Index MSCI rating upgrade t
Slide 37: UniCredit on track on 2023 sustainability targets
UniCredit on track on 2023 sustainability targets ESG – 2023 ESG targets ESG key 2023 targets FY19 Actuals Targets 2019 4Q20 2023 Status Coal Revised ▪ Thermal coal mining and coal fired power plant projects exposure 1, % policy Coal policy As of 2Q20 0 ▪ Exposure to renewable energy sector2, bn 7.2
Slide 38: ESG ratings (1/2)
ESG ratings (1/2) ESG - ESG ratings Rating range Comments ESG Rating: ▪ On governance, the bank continues to be ahead of most international peers (pay practices A CCC B BB BBB A AA AAA and board structure) ESG Risk Rating: ▪ ESG Risk Rating improved from last 25.3 as of November 2020 Medium ▪ Medium
Slide 39: ESG ratings (2/2)
ESG ratings (2/2) ESG - ESG ratings Rating range Comments Ratings and level of compliance: ▪ UniCredit is the only bank in Italy with an EE+ rating and one of European excellence in EE+ terms of sustainability (Very strong) F FF FFF E EE+ EEE ▪ Strong compliance and ability to manage reputational ri
Slide 40: End notes (1/6)
End notes (1/6) End notes Please note that numbers may not add up due to rounding, and some figures are managerial. This notes refer to the metric and/or defined term presented on page 3 (Highlights): 1. Underlying net profit is the basis for the ordinary capital distribution policy. For 2021, as an
Slide 41: End notes (2/6)
End notes (2/6) End notes Please note that numbers may not add up due to rounding, and some figures are managerial. These notes refer to the metric and/or defined term presented on page 10 (Net interest): 1. Net contribution from hedging strategy of non-maturity deposits in 4Q20 at 361.1m, +7.4m Q/Q
Slide 42: End notes (3/6)
End notes (3/6) End notes Please note that numbers may not add up due to rounding, and some figures are managerial. This notes refer to the metric and/or defined term presented on page 19 (Loan book by stage): 1. Total loans to customers end-of-period, at face value (i.e. before deduction of provisi
Slide 43: End notes (4/6)
End notes (4/6) End notes Please note that numbers may not add up due to rounding, and some figures are managerial. These notes refer to the metric and/or defined term presented on page 26 (CET1 capital): 1. MDA buffer is regulatory relevant only versus the CET1 ratio transitional, at 693bps; Includ
Slide 44: End notes (5/6)
End notes (5/6) End notes Please note that numbers may not add up due to rounding, and some figures are managerial. This notes refers to the metric and/or defined term presented on page 30 (Strong and liquidity steering): 1. Managerial figures. 2. Unencumbered assets are represented by all the asset
Slide 45: End notes (6/6)
End notes (6/6) End notes Please note that numbers may not add up due to rounding, and some figures are managerial. These notes refer to the metric and/or defined term presented on page 35 (ESG Achievements): 1. Figure has been recast vs 2Q20 due to a portfolio resegmentation. 2. Moratoria include b
Slide 46: Disclaimer
Disclaimer This Presentation includes “forward-looking statements” which rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of UniCredit S.p.A.
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