Unicredit S.p.a. · MIL:UCG
Unicredit — Debt Investor Presentation (November 2017)
31 slides from Unicredit's debt investor presentation, Nov 16, 2017
Slide 1: Fixed Income Presentation
Fixed Income Presentation Milan 16 November, 2017
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: Agenda
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 3
Slide 4: Adjusted net profit at 838m up 87% Y/Y thanks to tangible results of Transform 2019
Adjusted net profit(1) at 838m up 87% Y/Y thanks to tangible results of Transform 2019 and underlying Group-wide business momentum 1 2 3 4 5 6 7 UniCredit at a glance Strong commercial dynamics thanks to network revamp. YTD: Number of clients increased by 423,000(2) and 52bn of new loan production.
Slide 5: UniCredit: a simple successful Pan European Commercial Bank with inherent competitive advantages
UniCredit: a simple successful Pan European Commercial Bank with inherent competitive advantages and CIB fully plugged-in 1 2 3 4 5 6 7 UniCredit at a glance 25 million clients(1) Commercial Banking model delivering unique Western, Central and Eastern 80% revenues from European network to extensive
Slide 6: Strong competitive advantage across countries and products
Strong competitive advantage across countries and products 1 2 3 4 5 6 7 UniCredit at a glance Strong local "Go to" bank for European "Mittelstand" Best-in-class Commercial Bank Corporates CIB product provider # clients, m(1) Rank by assets in Loans to corporates in EU zone, €bn(3) EMEA rankings(5)
Slide 7: Transform 2019 update
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 7
Slide 8: UniCredit key targets
UniCredit key targets 1 2 3 4 5 6 7 Transform 2019 update 2015 3Q17 9M17 2017 2019 Revenues(1) €19.9bn €4.6bn €14.8bn €20.4bn Cost/income 61.6% 60.5% 57.9% <52% Cost €12.2bn €2.8bn €8.6bn €11.7bn €10.6bn Cost of Risk 89bps 53bps 54bps 55 to 60bps 49bps Net income €1.5bn €2.8bn €4.7bn €4.7bn RoTE(2)
Slide 9: Transform 2019 achievements (1/2)
Transform 2019 achievements (1/2) 1 2 3 4 5 6 7 Transform 2019 update 5 Strategic Pillars Achieved 2019 Target All decisive actions announced at the Capital Markets Day successfully completed STRENGTHEN AND • Bold actions taken: disposals of Pioneer, Pioneer disposal closed in 3Q17, with +84bps
Slide 10: Transform 2019 achievements (2/2)
Transform 2019 achievements (2/2) 1 2 3 4 5 6 7 Transform 2019 update 5 Strategic Pillars Achieved 2019 Target TRANSFORM • Transformation of operating model to a €1.7 bn net cost savings by 557 branch closures since Dec-15 in Western OPERATING sustainable lower cost structure 2019 Europe, 59% of 9
Slide 11: 3Q17 P&L results
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 11
Slide 12: Group – Adjusted net profit up 87% Y/Y thanks to strong underlying commercial performance
Group – Adjusted net profit up 87% Y/Y thanks to strong underlying commercial performance, down 33% Q/Q impacted by seasonality 1 2 3 4 5 6 7 3Q17 P&L results Key drivers(1) Data in m 3Q16 2Q17 3Q17 ∆ % vs. 2Q17 ∆ % vs. 3Q16 9M16 9M17 ∆ % vs. 9M16 Total revenues 4,835 5,076 4,646 -8.5% -3.9% 15,190
Slide 13: Group – Lower recurring revenues Q/Q affected by low interest rate environment and seasonality
Group – Lower recurring revenues Q/Q affected by low interest rate environment and seasonality of fees in 3Q17 1 2 3 4 5 6 7 3Q17 P&L results Net Interest, m Fees & commissions, m +5.5% -2.2% 5,025 4,763 -3.5% 7,893 7,716 Average Euribor 3M +4.3% 1,852 2,083 -5.7% -0.33% -7.9% 2,591 2,652 2,500 (fla
Slide 14: Group – Trading income down 17.6% Q/Q in an unfavourable sector-wide environment
Group – Trading income down 17.6% Q/Q in an unfavourable sector-wide environment 1 2 3 4 5 6 7 3Q17 P&L results Trading income, m Dividends(1), m Client driven -14.4% 669m exc. -25.5% Other dividends and Turkey (at equity) equity investments Visa Europe Other trading 1,675 696 1,434 -20.3% -12.8% 51
Slide 15: Group – Costs 1.6% lower Q/Q and 4.3% Y/Y, ahead of plan
Group – Costs 1.6% lower Q/Q and 4.3% Y/Y, ahead of plan on better FTE and branch reduction 1 2 3 4 5 6 7 3Q17 P&L results Main drivers Costs, m FTEs • Execution of Transform 2019 -5,117 progressing well: Q/Q -1,223 51% of FTE reduction target -3.8% 99,183 achieved 95,288 94,066 8,898 CEE 24,490 2
Slide 16: Group – Low CoR of 53bps in 3Q17
Group – Low CoR of 53bps in 3Q17. FY17 CoR expected to be between 55 and 60bps 1 2 3 4 5 6 7 3Q17 P&L results Main drivers(1) Loan loss provisions, m -30.1% • LLPs on a low level at 598m, with CoR at 53bps in 3Q17 2,621 and at 54bps at 9M17 -38.8% 1,833 • Gross NPE ratio down 34bps to 10.6% with sol
Slide 17: Asset quality
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 17
Slide 18: Non Core – Run down progressing
Non Core – Run down progressing 1 2 3 4 5 6 7 Asset quality Non Core evolution, bn Actions of Non Core run down(1), bn -€37.2 9M17 by 2019 Gross loans -€37.2 Gross loans 56.4 32.5 19.2 FINO Phase 1 successfully closed in July, o/w gross NPE 49.7 28.8 19.2 FINO Phase 2 portfolio expected to be sold d
Slide 19: Group – Asset quality further improved in the quarter
Group – Asset quality further improved in the quarter with lower NPE, improved NPE ratios and strengthened coverage ratios 1 2 3 4 5 6 7 Asset quality Non performing exposures, bn o.w. Gross bad loans, bn -43.1% -40.80% -41.3% 50.1 -31.5% 29.4 28.5 74.8 Net bad 19.3 9.9 <10.5 loans 51.3 44.3 Sep-16
Slide 20: Capital position
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 20
Slide 21: Group – Transitional ratios well above MDA levels
Group – Transitional ratios well above MDA levels 1 2 3 4 5 6 7 Capital position Transitional CET1 ratio Transitional Tier 1 ratio Transitional total capital ratio MDA as of Sep-17 @8.78% MDA as of Sep-17 @10.28% MDA as of Sep-17 @12.28% +0.9pp +1.0pp 18.19% 17.25% +1.0pp 15.32% T2 2.87% 14.31% 13.9
Slide 22: Solid FL CET1 ratio at 13.81% up by 101bp Q/Q
Solid FL CET1 ratio at 13.81% up by 101bp Q/Q mainly thanks to Pioneer disposal, earnings generation and RWA dynamics. Target leverage ratio at 5.6% in 2019 1 2 3 4 5 6 7 Capital position Fully loaded CET1 capital(1) as of Sep-17, €bn €/bn 109.8 67.2 74.9 39.0 39.9 40.9 41.3 48.4 49.1 23.8 24.6 35.2
Slide 23: Funding & Liquidity
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 23
Slide 24: Well diversified and centrally coordinated funding and liquidity profile
Well diversified and centrally coordinated funding and liquidity profile 1 2 3 4 5 6 7 Funding & Liquidity • UniCredit SpA is operating as the Group Holding as well as the Italian operating bank: TLAC issuer assuming Single-Point-of-Entry (SPE) Coordinated Group-wide funding and liquidity manage
Slide 25: Strong and disciplined Liquidity Management
Strong and disciplined Liquidity Management 1 2 3 4 5 6 7 Funding & Liquidity 3Q17 strong liquidity buffer Compliant with key liquidity ratios €bn Additional eligible 195 assets available 10 LCR NSFR within 12 months(1) Cash and Deposits >100% >100% with Central Banks 74 Unencumbered 185 assets (imm
Slide 26: 2017-2019 Group Funding Plan
2017-2019 Group Funding Plan 1 2 3 4 5 6 7 Funding & Liquidity 2017-19 Group Funding Plan 2017-19 Strategy by Product by Country • Very conservative funding plan given the €bn, to be issued over plan period current regulatory uncertainty to mitigate any execution risk TLAC funding plan 22.9 78.7bn (
Slide 27: 2017 Medium-Long Term Funding Plan (1/2)
2017 Medium-Long Term Funding Plan (1/2) 1 2 3 4 5 6 7 Funding & Liquidity 2017 M/L Term Funding Plan by region TLTROII split by region 26.9bn Austria CEE Germany 7.8% 19.7bn 1.9% Italy 49.8% 24.6% Italy 32.9% Germany 28.2% Germany 37.2% 65.7% Austria 3.5% Austria 0.6% Italy CEE(1) 18.5% CEE(1) 29.3
Slide 28: 2017 Medium-Long Term Funding Plan (2/2)
2017 Medium-Long Term Funding Plan (2/2) 1 2 3 4 5 6 7 Funding & Liquidity • As of end of October, UniCredit issued c. €19.7 bn of bond instruments, which represent c. 73% of the overall 2017 funding plan. These are the latest landmark issuances: – $1.25 bn 5Y 3.750% and $0.75 bn 10Y 4.625% Senior U
Slide 29: Ratings Overview
Ratings Overview 1 2 3 4 5 6 7 Funding & Liquidity BBB/Stable/A2(1) Baa1/Stable/P2(1) BBB/Stable/F2(1) SpA (bbb)(2) (ba1)(2) (bbb)(2) UC SpA upgraded: “…capital strengthening “...very large capital raising coupled with a “…the planned recapitalisation, sale of non- contributed to our upgrade.
Slide 30: Concluding remarks
Agenda 1 UniCredit at a glance 2 Transform 2019 update 3 3Q17 P&L results 4 Asset quality 5 Capital position 6 Funding & Liquidity 7 Concluding remarks 30
Slide 31: Concluding remarks – Transform 2019 delivering tangible results
Concluding remarks – Transform 2019 delivering tangible results 1 2 3 4 5 6 7 Concluding remarks Underlying financial performance is strong. Adjusted RoTE(1) reached 7.8% in 9M17, on track to meet the 9% target for FY19 FY17 NII target of 10.2bn is confirmed. NII is expected to remain stable in 1H18
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