Unicredit S.p.a. · MIL:UCG
Unicredit — Q1 2018 Earnings Presentation
69 slides from Unicredit's earnings presentation, May 10, 2018
Slide 1: 1Q18 Results
1Q18 Results Milan, 10 May 2018
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 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 3
Slide 4: Transform 2019 drives tangible improvements. Best first quarter since 2007
Transform 2019 drives tangible improvements. Best first quarter since 2007 Non Core rundown accelerated to 2021 1 2 3 4 5 6 7 8 Executive summary Core Bank solid performance with 1Q18 Group Core RoTE at 10.4%, up 1.1p.p. Y/Y. 1Q18 Group Core gross NPE ratio improving, down 0.9p.p. Y/Y to 4.7% Group
Slide 5: Group – 1Q18 net profit at 1.1bn, up 22.6% Y/Y
Group – 1Q18 net profit at 1.1bn, up 22.6% Y/Y 1 2 3 4 5 6 7 8 Executive summary ∆ % vs. ∆ % vs. Group key figures 1Q17 4Q17 1Q18 4Q17 1Q17 Total revenues, m 5,150 4,906 5,114 +4.2% -0.7% Operating costs, m -2,886 -2,794 -2,738 -2.0% -5.2% Loan loss provisions, m -766 -835 -496 -40.6% -35.2% Net pro
Slide 6: Transform 2019 update
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 6
Slide 7: Transform 2019 achievements (1/2)
Transform 2019 achievements (1/2) 1 2 3 4 5 6 7 8 Transform 2019 update Strong capitalisation • 1Q18 fully loaded CET1 ratio at 13.06%, including 99bps IFRS9 FTA (net of tax) STRENGTHEN • Strong capital position allowing the Group to accelerate the Non Core rundown. Higher AND Higher IFRS9 FTA IFRS9
Slide 8: Transform 2019 achievements (2/2)
Transform 2019 achievements (2/2) 1 2 3 4 5 6 7 8 Transform 2019 update • UniCredit is the only bank in Italy to offer all three mobile payments Apple Pay, Alipay and Samsung Pay, the latter successfully launched in 1Q18, further strengthening the Group's offer Multichannel offer/ • In Italy, 93% (v
Slide 9: Group results highlights
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 9
Slide 10: Group – 1Q18 net profit at 1.1bn, up 22.6% Y/Y, underpinned by commercial dynamics
Group – 1Q18 net profit at 1.1bn, up 22.6% Y/Y, underpinned by sustained positive Group wide commercial dynamics 1 2 3 4 5 6 7 8 Group results highlights Net profit, m Net profit by division 1Q18, m RoAC(2) Group Group Core 14% CB Italy 379 858m 708m adjusted(1) adjusted(1) CB Germany 85 7% 1,243 1,
Slide 11: Group Core – 1Q18 net profit at 1.2bn, up 11.8% Y/Y
Group Core – 1Q18 net profit at 1.2bn, up 11.8% Y/Y. RoTE at 10.4%, up 1.1p.p. Y/Y 1 2 3 4 5 6 7 8 Group Core results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues 5,127 4,893 5,132 +4.9% +0.1% o/w Net interest 2,612 2,608 2,615 +0.3% +0.1% o/w Fees 1,719
Slide 12: Group – 1Q18 net profit at 1.1bn, up 22.6% Y/Y mainly thanks to lower LLPs and costs
Group – 1Q18 net profit at 1.1bn, up 22.6% Y/Y mainly thanks to lower LLPs and lower costs 1 2 3 4 5 6 7 8 Group results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues 5,150 4,906 5,114 +4.2% -0.7% o/w Net interest 2,660 2,646 2,636 -0.4% -0.9% • Resilient
Slide 13: Group – Resilient 1Q18 net interest mainly thanks to lower funding costs
Group – Resilient 1Q18 net interest mainly thanks to lower funding costs 1 2 3 4 5 6 7 8 Group results highlights Net interest(1) Q/Q, m -0.4% +1.8% 2,646 2,590 2,636 -56 +12 -3 +7 +4 +51 -10 +1 -15 Average Euribor 3M Commercial dynamics: +61m -0.33% (flat Q/Q) 4Q17 Days & FX 4Q17 Loans Deposits Loa
Slide 14: Group – Average Group Core loan volumes up 2.8bn Q/Q
Group – Average Group Core loan volumes up 2.8bn Q/Q, while customer rates stable in 1Q18 1 2 3 4 5 6 7 8 Group results highlights Avg. commercial loans(1) and rates(2) Customer spreads(3) 1Q18 2.80% 2.66% 2.67% At const. FX Customer Q/Q -2bps excl. days effect Q/Q Y/Y rates Group Core -1bp Q/Q excl
Slide 15: Group – End-of-period Group Core customer loans up 5.1bn Q/Q
Group – End-of-period Group Core customer loans up 5.1bn(1) Q/Q 1 2 3 4 5 6 7 8 Group results highlights Customer loans (end-of-period)(2), bn Customer deposits (end-of-period)(2), bn Q/Q Y/Y Q/Q Y/Y (3) +1.9% +0.8% +7.9% CB Italy 137.7 -0.0% CB Italy 143.1 CB Germany 82.3 +1.8% +0.8% CB Germany 89.
Slide 16: Group – Fees up 2.8% Y/Y driven by investment and transactional fees
Group – Fees up 2.8% Y/Y driven by investment and transactional fees, up 2.3% and 9.3% Y/Y respectively 1 2 3 4 5 6 7 8 Group results Annex highlights – P&L Fees Q/Q, stated figures(1) m Q/Q Y/Y 1,750 +4.0% +2.8% 1,703 1,683 +38 +20 +8 Investment 730 +2.9% +2.3% 714 710 fees Financing 428 +1.8% -4.4
Slide 17: Group – TFAs at 815.4bn, up 2.4% Y/Y
Group – TFAs at 815.4bn, up 2.4% Y/Y. AuM net sales up 8.4% Y/Y Transformation of client liquidity into AuM continues 1 2 3 4 5 6 7 8 Group results highlights Main drivers Group TFAs(1) 1Q18, bn +19.4bn • TFAs up 2.4% Y/Y to 815.4bn: (+2.4%) Q/Q Y/Y Assets under Management at 217.0bn, -7.8bn up 6.
Slide 18: Group – Trading income down 19.0% Y/Y; dividends up 11.4%
Group – Trading income down 19.0% Y/Y Dividends increased by 11.4% Y/Y, thanks to the strong performance of Turkey 1 2 3 4 5 6 7 8 Group results highlights Trading income, m Dividends(1), m Client driven Other dividends and equity investments +11.4% -19.0% Other trading Turkey (at equity) +24.5% +58
Slide 19: Group – Costs down 5.2% Y/Y, down 2.0% Q/Q
Group – Costs down 5.2% Y/Y, down 2.0% Q/Q FY18 11.0bn and FY19 10.6bn total cost targets confirmed 1 2 3 4 5 6 7 8 Group results highlights Main drivers Costs, m FTEs (eop) • Execution of Transform 2019 -6,058 progressing: -5.2% Q/Q -1,587 75% of FTE reduction target -2.0% 96,423 91,952 90,365 ac
Slide 20: Group – Cost reduction on track with HR and Non HR costs down Y/Y
Group – Cost reduction on track with HR and Non HR costs down Y/Y, thanks to disciplined cost control 1 2 3 4 5 6 7 8 Group results highlights Staff expenses, m Non HR costs(1), m -6.9% -2.5% -3.9% +1.0% 1,755 1,701 1,131 1,634 1,093 1,103 CEE 185 185 187 CEE 194 215 194 W.E. 1,570 1,516 1,447 W.E.
Slide 21: Group – 1Q18 LLPs down 35.2% Y/Y, leading to low CoR of 45bps
Group – 1Q18 LLPs down 35.2% Y/Y, leading to low CoR of 45bps FY18 68bps CoR target confirmed, of which 15bps due to models impact 1 2 3 4 5 6 7 8 Group results highlights Main drivers(1) Loan loss provisions, m • 1Q18 LLPs down 35.2% Y/Y to 496m, with CoR seasonally -35.2% low at 45bps. No models i
Slide 22: Divisional results highlights
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 22
Slide 23: CB Italy – Net operating profit 0.6bn, up 23.2% Y/Y
CB Italy – Net operating profit 0.6bn, up 23.2% Y/Y thanks to strong fees, strict cost discipline and lower LLPs 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. ∆ % vs. 4Q17 1Q17 Total revenues 1,868 1,868 1,884 +0.9% +0.9% • NII 1.4% down Q/Q due to ongoi
Slide 24: CB Germany – Net operating profit 0.2bn, down 20.7% Y/Y
CB Germany – Net operating profit 0.2bn, down 20.7% Y/Y due to lower revenues partially offset by lower costs 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues 704 637 639 +0.2% -9.2% • NII down 8.1% Q/Q as pressure on custom
Slide 25: CB Austria – Net operating profit 0.2bn, up 10.9% Y/Y
CB Austria – Net operating profit 0.2bn, up 10.9% Y/Y driven by cost reductions 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues 374 404 381 -5.9% +1.9% • NII down 2.4% Q/Q due to repayments in commercial real estate o/w Net
Slide 26: CEE – Net operating profit 0.6bn, up 26.0% Y/Y
CEE – Net operating profit 0.6bn, up 26.0% Y/Y thanks to higher revenues and lower LLPs Substantial de-risking with gross NPE ratio down 153bps Y/Y to 7.7% 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m (1) 1Q17 4Q17 1Q18 ∆ % vs. ∆ % vs. 4Q17 1Q17 constant constant Total revenu
Slide 27: CIB – Net operating profit 0.7bn, stable at -0.1% Y/Y
CIB – Net operating profit 0.7bn, stable at -0.1% Y/Y 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m (1) 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues 1,163 1,006 1,099 +9.2% -5.5% • The overall resilience of the fully plugged-in CIB business model o/w Net interest 53
Slide 28: Fineco – Net operating profit 91m up 12.6% Y/Y
Fineco – Net operating profit 91m up 12.6% Y/Y, driven by NII and fees 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues 142 156 155 -0.3% +9.5% • Revenues up 9.5% Y/Y supported by NII (+9.3% Y/Y) and fees o/w Net interest 63
Slide 29: Group Corporate Centre – Net operating loss 0.2bn, improved 24.0% Y/Y
Group Corporate Centre – Net operating loss 0.2bn, improved by 24.0% Y/Y thanks to better revenues 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers Data in m 1Q17 4Q17 1Q18 ∆ % vs. 4Q17 ∆ % vs. 1Q17 Total revenues -192 -182 -121 -33.5% -37.0% Operating costs -96 -130 -93 -28.6% -3.7% Gross
Slide 30: Non Core – Further decisive action to accelerate the Non Core rundown to 2021
Non Core – Further decisive action to accelerate the Non Core rundown to 2021 from 2025 1 2 3 4 5 6 7 8 Divisional results highlights Main drivers(1) Data in m 1Q17 4Q17 1Q18 ∆ % vs. ∆ % vs. 4Q17 1Q17 Total revenues 24 12 -18 n.m. n.m. • Full rundown of Non Core accelerated to 2021 from 2025. Operat
Slide 31: Asset quality
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 31
Slide 32: Group Core – Ongoing de-risking, gross NPE ratio down 0.9p.p. Y/Y to 4.7%
Group Core – Ongoing de-risking, gross NPE ratio improving, down 0.9p.p. Y/Y to 4.7% 1 2 3 4 5 6 7 8 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -13.1% -14.7% -1.9% -4.3% 24.6 12.1 10.7 10.5 21.9 20.9 Net bad 3.6 3.4 3.0 loans 1Q17 4Q17 1Q18 Coverage ratio 70.0% 68.6% 71.9
Slide 33: Group Core – Net flows to NPEs and loan evolution drivers
Group Core – Net flows to NPEs down 32.7% Y/Y 1 2 3 4 5 6 7 8 Asset quality Group Core – net flows to NPEs, m Group Core – Loan evolution drivers, m Net flows 1,402 983 425 433 Flow from 662 UTP to 202 Inflows 1,823 Bad loans to NPEs 1,501 1,155 528 Outflows to -518 -420 -492 425 performing 222 1Q17
Slide 34: CB Italy – Gross NPEs at 9.5bn, down 7.7% Y/Y
CB Italy – Gross NPEs at 9.5bn, down 7.7% Y/Y, down 1.0% Q/Q 1 2 3 4 5 6 7 8 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -5.6% -7.7% +2.7% -1.0% 4.8 4.5 4.6 10.3 9.6 9.5 Net bad loans 1.5 1.5 1.3 1Q17 4Q17 1Q18 Coverage 69.6% 65.7% 71.6% Net NPEs ratio 4.8 4.6 4.3 1Q17 4Q1
Slide 35: CB Italy – Default rate up 10bps Y/Y, down 30bps Q/Q
CB Italy – Default rate up 10bps Y/Y, down 30bps Q/Q Migration rate up from seasonally low 4Q17, recoveries higher Y/Y 1 2 3 4 5 6 7 8 Asset quality CB Italy – Net flows to NPEs, m CB Italy – Loan evolution drivers, m Net flows 315 347 554 Flow from 223 411 476 UTP to Bad loans Inflows 652 776 686 t
Slide 36: Non Core – Gross loans reduced by 9.5bn Y/Y
Non Core – Gross loans reduced by 9.5bn Y/Y, including 1.4bn write-off on residential mortgages in 1Q18. NPE disposals target for FY18 increased to 2bn 1 2 3 4 5 6 7 8 Asset quality 1Q18 actions of Non Core rundown(1) Gross loans, bn FINO FINO phase 2 closed in January 2018 -9.5bn 68m. FY18 target i
Slide 37: Non Core – Gross NPEs at 23.6bn, down 22.7% Y/Y
Non Core – Gross NPEs at 23.6bn, down 22.7% Y/Y and 10.7% Q/Q 1 2 3 4 5 6 7 8 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -22.6% -22.7% -14.0% -10.7% 19.0 17.1 30.6 New target, improved 14.7 26.5 from 17.2bn 23.6 Net bad 6.7 6.1 3.8 loans 14.9 1Q17 4Q17 1Q18 Coverage Net N
Slide 38: Capital
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 38
Slide 39: Group – CET1 ratio down to 13.06%, mostly due to IFRS9 FTA impact
Group – CET1 ratio down to 13.06%, mostly due to IFRS9 FTA impact 1 2 3 4 5 6 7 8 Capital Fully loaded Common Equity Tier 1 ratio, % 13.60% +31bps +4bps +13bps 13.06% -91bps -7bps -4bps AFS/FVOCI: +1bps Regulation, models and FX: -6bps procyclicality: -9bps DBO: flat 4Q17 stated IFRS9(1)/FINO(2) Net
Slide 40: Group – RWA down by 2.8bn Q/Q
Group – RWA down by 2.8bn Q/Q, thanks to the derecognition of FINO, partially compensated by loan growth 1 2 3 4 5 6 7 8 Capital RWA transitional(1) Q/Q, bn -2.8bn Credit 385.3 Market 356.1 353.3 +3.5 +2.1 -5.0 -1.1 -1.0 -1.0 -0.4 Operational Credit RWA: -1.5bn 331.3 307.5 306.0 15.5 16.1 15.1 38.5
Slide 41: Closing remarks
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 41
Slide 42: Continued disciplined execution of Transform 2019
Continued disciplined execution of Transform 2019 Decisive action with accelerated full rundown of Non Core by end 2021 1 2 3 4 5 6 7 8 Concluding remarks Transform 2019 is fully on track, delivering tangible improvements. Solid Core Bank performance with net profit at 1.2bn, up 11.8% Y/Y. 1Q18 Grou
Slide 43: Annex
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Closing remarks 8 Annex 43
Slide 44: Group – 2017 and 2018 non recurring items
Group – 2017 and 2018 non recurring items 1 2 3 4 5 6 7 8 Annex – Non recurring items 2017 Net Profit, m Division 1Q none 4Q Pekao and Pioneer disposals +93 GCC 2018 Net Profit, m Division Net trading gains from Used to calculate Group and 1Q +39 CIB Group Core adjusted net profit participations Use
Slide 45: Divisional monitoring KPIs for Group, Group Core and Non Core
Divisional monitoring KPIs for Group, Group Core and Non Core 1 2 3 4 5 6 7 8 Annex – KPIs Group Group Core Non Core 1Q18 2018 2019 1Q18 2019 1Q18 2019 Revenues, bn 5.1 20.1 20.6 5.1 20.6 0.0 0.0 Cost, bn -2.7 -11.0 -10.6 -2.7 -10.5 0.0 -0.1 Cost/Income, % 53.5 <55 <52 52.7 <52 n.m. n.m. LLP, bn -0.
Slide 46: Divisional monitoring KPIs by division
Divisional monitoring KPIs by division 1 2 3 4 5 6 7 8 Annex – KPIs CB Italy CB Germany CB Austria CEE CIB GCC 1Q18 2019 1Q18 2019 1Q18 2019 1Q18 2019 1Q18 2019 1Q18 2019 Revenues, bn 1.9 7.5 0.6 2.5 0.4 1.6 1.1 4.4 1.1 3.9 -0.1 0.0 Cost,bn -1.1 -4.0 -0.4 -1.7 -0.3 -1.0 -0.4 -1.6 -0.4 -1.6 -0.1 -0.4
Slide 47: Group – Net interest resilient Y/Y thanks to lower funding costs
Group – Net interest resilient Y/Y thanks to lower funding costs, compensating lower customer loan rates 1 2 3 4 5 6 7 8 Annex – P&L Net interest(1) Y/Y, m -0.9% -0.5% 2,660 2,649 2,636 -11 -17 -12 +121 +19 -24 -25 -112 +36 Average Euribor 3M Commercial dynamics: +36m -0.33% (flat Y/Y) 1Q17 FX effec
Slide 48: TFAs – Divisional breakdown
TFAs – Divisional breakdown 1 2 3 4 5 6 7 8 Annex – Balance sheet Main drivers 1Q18 TFAs(1) divisional breakdown, bn • Group TFAs amounted to 815.4bn in 1Q18, up by 2.4% Y/Y mainly driven by CB Italy, CB Germany and Fineco: 68.1 815.4 CB Italy: TFAs up by 8.7bn (+2.6% Y/Y) to 344.3bn, mainly 91.4
Slide 49: Systemic charges – Breakdown by type and division
Systemic charges – Breakdown by type and division 1 2 3 4 5 6 7 8 Annex – P&L 1Q18 Systemic Charges o/w SRF o/w DGS o/w Bank levies CB Italy -36 -36 0 0 CB Germany -39 -28 -11 0 CB Austria -86 -29 -18 -39 CEE -124 -72 -33 -19 CIB -109 -95 -4 -10 Fineco 0 0 0 0 GCC -51 -23 0 -28 Non Core -20 -19 0 -1
Slide 50: Group tangible book value per share at 22.00
Group – Core earnings per share up 55.8% Q/Q Group tangible book value per share at 22.00 1 2 3 4 5 6 7 8 Annex – TBVPS/EPS Tangible book value per share(1) Adj. Earnings per share(2) Group Group Group Core +55.8% -4.61% 23.06 +72.0% 0.55 22.00 0.49 0.35 0.28 4Q17 1Q18 4Q17 1Q18 4Q17 1Q18 (1) End of
Slide 51: Turkey – Strong performance with net operating profit 146m
Turkey – Strong performance with net operating profit 146m, up 35.5% Y/Y at constant FX 1 2 3 4 5 6 7 8 Annex – Country details ∆ % vs. ∆ % vs. Main drivers(1) Data in m (2) 1Q17 4Q17 1Q18 4Q17 1Q17 constant constant • Revenues up 12.4% Y/Y at constant FX, underpinned Total revenues 306 294 290 +3.3
Slide 52: Russia – Solid performance with net operating profit 120m
Russia – Solid performance with net operating profit 120m, up 12.9% Y/Y at constant FX, driven by higher revenues 1 2 3 4 5 6 7 8 Annex – Country details Data in m (1) ∆ % vs. ∆ % vs. Main drivers(1) 1Q17 4Q17 1Q18 4Q17 1Q17 constant constant Total revenues 210 182 207 +15.1% +10.1% • NII down by 6.
Slide 53: Group – CET1 capital fully loaded and tangible equity
Group – CET1 capital fully loaded and tangible equity 1 2 3 4 5 6 7 8 Annex – Capital CET1 capital FL (eop), bn Tangible equity (eop), bn +4.5% +8.2% -4.8% -4.6% 48.5 51.3 46.2 49.0 44.2 45.3 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 53
Slide 54: Group – Transitional capital ratios well above MDA levels
Group – Transitional capital ratios well above MDA levels 1 2 3 4 5 6 7 8 Annex – Capital CET1 transitional(1) Tier 1 transitional(1) Total capital transitional(1) 2017 Basel 3 2018 Basel 3 2017 Basel 3 2018 Basel 3 2017 Basel 3 2018 Basel 3 phase-in 80% phase-in 100% phase-in 80% phase-in 100% phas
Slide 55: Group – Leverage ratio fully loaded at 5.35%
Group – Leverage ratio fully loaded at 5.35%, down 20bps Q/Q and up 73bps Y/Y 1 2 3 4 5 6 7 8 Annex – Capital Basel 3 leverage ratio fully loaded Basel 3 leverage ratio transitional(1) 2017 Basel 3 2018 Basel 3 +73bps phase-in 80% phase-in 100% +64bps -20bps 5.55% -24bps 5.35% 5.73% 5.48% 4.62% 4.85
Slide 56: Asset quality by division
Asset quality by division 1 2 3 4 5 6 7 8 Annex – Asset quality 1Q18 Group Group Core CB Italy CB Germany CB Austria CEE CIB Non Core Gross loans, bn 471.4 445.1 143.9 83.8 46.9 64.8 106.0 26.3 Gross NPE, bn 44.6 20.9 9.5 1.9 2.0 5.0 3.1 23.6 Net NPE, bn 17.7 8.8 4.3 0.7 0.9 1.7 1.5 8.9 Gross NPE ra
Slide 57: Asset quality – NPE dynamics CB Germany, CB Austria, CEE and CIB
Asset quality – NPE dynamics(1) CB Germany, CB Austria, CEE and CIB 1 2 3 4 5 6 7 8 Annex – Asset quality Net flows to NPEs, recoveries and write-offs – 1Q18, m Migrations from Unlikely-to-pay to Bad loans – 1Q18, m Recoveries 203 127 147 441 Write-off UTP to Bad 0 47 24 49 65 118 127 Inflow 71 to N
Slide 58: Asset quality – Non Core gross NPEs breakdown by asset class
Asset quality – Non Core gross NPEs breakdown by asset class 1 2 3 4 5 6 7 8 Annex – Asset quality Non Core gross NPEs, bn Data as of 1Q18 23.6 11.4 4.6 4.0 2.5 0.6 0.5 Total Corporate Mortgages Leasing Small business Individual Other 58
Slide 59: Asset quality – Forborne exposures by region
Asset quality – Forborne exposures by region 1 2 3 4 5 6 7 8 Annex – Asset quality Forborne loans(1), bn GROUP 23.8 22.9 21.9 ITALY 15.1 15.3 14.9 17.1 16.6 15.9 11.1 11.1 11.1 6.6 6.4 5.9 4.1 4.1 3.8 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 Coverage Coverage 33.4% 33.9% 36.5% ratio 33.2% 34.1% 37.1% ratio AUS
Slide 60: 2019 CET1 ratio target confirmed whilst anticipating regulatory headwinds
Strengthen and optimise capital 2019 CET1 ratio target confirmed whilst anticipating additional regulatory headwinds 1 2 3 4 5 6 7 8 Annex – CMD 2017 (Updated) Fully loaded CET1 ratio evolution to 2019(1), % 2018 2019 Regulation, models and -0.4 -0.1 procyclicality Net IFRS9(2) -0.7 EBA guidelines (
Slide 61: Post 2019 dividend payout to increase from 30% up to 50%
Cumulative organic capital generation above estimated regulatory impacts post 2019 1 2 3 4 5 6 7 8 Annex – CMD 2017 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 (rem
Slide 62: Line adjustments from accounting changes (1/2)
Line adjustments from accounting changes (1/2) 1 2 3 4 5 6 7 8 Annex – CMD 2017 Accounting change(1) 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 accounting(2) longer as LLP write-ba
Slide 63: Line adjustments from accounting changes (2/2)
Line adjustments from accounting changes (2/2) 1 2 3 4 5 6 7 8 Annex – CMD 2017 (Updated) FY17 2019 Previous Delta Restated Previous Delta Restated P&L, bn Revenues 19.6 0.33 20.0 20.4 0.24 20.6 of which NII 10.3 0.33 10.6 10.9 0.24 11.1 LLPs -2.6 -0.33 -2.9 -2.4 -0.24 -2.6 Net income 5.5 0 5.5 4.7
Slide 64: Glossary
Glossary 64
Slide 65: Glossary (1/5)
Glossary(1) (1/5) Glossary AFS Available for Sale AT1 Additional Tier 1 Capital AuC Assets under Custody AuM Assets under Management Bad loans Exposures to borrowers in a state of insolvency or in an essentially similar situation, regardless of any loss forecasts made by the bank Branches Number of
Slide 66: Glossary (2/5)
Glossary (2/5) Glossary Capital Markets Day – CMD perimeter as announced at CMD on 13 December 2016: variations related to CMD disposals of Immo Holding, Ukraine, 30% Fineco, Pekao and Pioneer Collateral coverage ratio Calculated as per EBA methodology, with collateral value capped at net loan level
Slide 67: Glossary (3/5)
Glossary (3/5) Glossary DVA Debt Value Adjustment E2E End-to-End FINO Failure Is Not an Option: project name for the disposal of a NPE portfolio (original gross book value of 17.7bn) Exposure to which forbearance measures have been applied, i.e. concessions towards a debtor who is facing or Forborne
Slide 68: Glossary (4/5)
Glossary (4/5) Glossary Inflows (from gross performing loans to gross impaired loans) minus outflows (collections and flows from gross Net Inflows impaired loans back to gross performing loans) Outflows (collections and flows from gross impaired loans back to gross performing loans) minus inflows (f
Slide 69: Glossary (5/5)
Glossary (5/5) Glossary Return on Allocated Capital (annualised net profit divided by the allocated capital), Allocated Capital based on RoAC RWA equivalent figures calculated with a CET1 ratio target of 12.5% as for plan horizon, including deductions for shortfall and securitisations RoTE Return on