Unicredit S.p.a. · MIL:UCG
Unicredit — Q2 2024 Earnings Presentation
44 slides from Unicredit's earnings presentation, Jul 24, 2024
Slide 1: UniCredit Unlocked
UniCredit Unlocked Record quarter and first half results; profitable growth and superior distribution trajectory continue Milan, 24 July 2024
Slide 2: Setting the benchmark for European banking
● UniCredit - Public Setting the benchmark for European banking Record quarter and first half results; profitable growth and superior distribution trajectory continue RECORD BLUE CHIP SAME STRATEGY, QUALITY GROWTH, GUIDANCE FURTHER RESULTS BANK NEW FOCUS RESILIENT BASE IMPROVED Delivering record
Slide 3: Setting the benchmark for European banking: Today
● UniCredit - Public Setting the benchmark for European banking Record quarter and first half results; profitable growth and superior distribution trajectory continue Today … RECORD RESULTS BLUE CHIP BANK Delivering record 14th consecutive quarter and first half quarter of quality growth RoTE
Slide 4: 14 consecutive quarters of profitable growth, record quarter and 1H
● UniCredit - Public 14 consecutive quarters of profitable growth, record quarter and 1H In million 2Q24 Y/Y 1H24 1H/1H 1H KEY HIGHLIGHTS ACROSS OUR LEVERS Net Revenue 6,313 +6.0% 12,581 +6.7% o/w NII o/w LLPs 3,565 -15 +1.9% +25.2% 7,143 -118 +5.1% +7.7% NET REVENUE QUALITY GROWTH +6.7 % Net Revenu
Slide 5: Net Revenue
● UniCredit - Public Net Revenue Up on growing Fees, resilient NII and solid Trading NET REVENUE, bn Growing net revenue base with record 2Q, bn CONSISTENT EARNINGS GROWTH ... 9.1% +6.7% 8.0% 8.9% Earnings continue to grow Net revenue / RWA 5.9% (+6.7% 1H/1H, +6.0% Y/Y) 6.0 6.3 6.3 12.6 ... IN A SEL
Slide 6: Net Interest Income
● UniCredit - Public Net Interest Income Resilient and highly profitable on its own merit NET INTEREST INCOME, bn RESILIENCE & QUALITY DISCIPLINE 2.1% 2.1% 2.1% Solid, stable NII (−0.4% Q/Q) despite +5.1% NIM1 1.3% 3.5 3.6 3.6 rates down Relentless quality focus in last 3 years NII evolution, le
Slide 7: Asset Quality and Cost of Risk
● UniCredit - Public Asset Quality and Cost of Risk Structurally lower cost of risk protected by strong coverage LLPs, m STRUCTURALLY LOWER TODAY 10 Strong and well covered asset quality, 0 1 1 with overlays stock remaining high to CoR, bps protect the future 103 118 LLPs, m CoR at 5bps in 1H, i
Slide 8: Fees
● UniCredit - Public Fees Continued strong momentum across all main categories FEES, bn CONTINUED STRONG MOMENTUM Strong fees from increased client appetite and broader Fees growing +6.6% 1H/1H (+8.6% +8.6% excl. CAFR in Italy product offering excl. CAFR and securitization costs) and securitization
Slide 9: Costs and operational efficiency
● UniCredit - Public Costs and operational efficiency Continued discipline led to significant decline in spite of inflation and investments COSTS, bn CONFIRMING EXCELLENCE Superior Operational Excellence • Continuing cost reduction − 1.2% Non-HR costs: -3.3% 1H/1H 2.36 − 1.7% Y/Y (-1.2% 1H/1H, -1.7%
Slide 10: RWAs and Capital efficiency
● UniCredit - Public RWAs and Capital efficiency Excellent organic capital generation continues CET1 ratio % QUALITY GROWTH 119bps Share buyback1: -57bps Cash dividend2: -38bps • Unique capital generation capability (3.3bn) +55bps AT1 & Cashes: -6bps due to focus on above CoE risk- -9bps due to FX l
Slide 11: Italy
● UniCredit - Public Italy Sustained excellent performance with unwavering focus on quality 3.4 bn Profit before Tax DELIVERING CONSISTENTLY TODAY Net Revenue 5.6 bn EXCELLENT 1H RESULTS TODAY ✓ Gross revenue: +5.6% PREPARED FOR THE FUTURE TOMORROW ✓ Grow “where it matters”, +15.8% Net revenue +5.5%
Slide 12: Germany
● UniCredit - Public Germany Confirmed business model resiliency with strong bottom line 1.6 bn Profit before Tax DELIVERING CONSISTENTLY TODAY Net Revenue 2.7 bn EXCELLENT 1H RESULTS TODAY ✓ Gross revenue: −0.9% PREPARED FOR THE FUTURE TOMORROW ✓ Resilient business model: +17.5% Net revenue -3.6% •
Slide 13: Central Europe
● UniCredit - Public Central Europe Confirming high profitability with positive development across all KPIs 1.3 bn Profit before Tax DELIVERING CONSISTENTLY TODAY Net Revenue 2.2 bn EXCELLENT 1H RESULTS TODAY ✓ Gross revenue: +7.3% PREPARED FOR THE FUTURE TOMORROW ✓ Focus on sustainable value +17.3%
Slide 14: Eastern Europe
● UniCredit - Public Eastern Europe Continuing our growth trajectory, maintaining efficiency and capital focus 1.0 bn Profit before Tax DELIVERING CONSISTENTLY TODAY Net Revenue 1.5 bn EXCELLENT 1H RESULTS TODAY ✓ Gross revenue: +15.9% PREPARED FOR THE FUTURE TOMORROW ✓ Strengthen our footprint in +
Slide 15: Client Solutions: strong performance across the board
● UniCredit - Public Client Solutions: strong performance across the board Engine of sustainable capital-light, fee-based revenue (c.70% Fees) CORPORATE SOLUTIONS ADVISORY & TRADE & CLIENT RISK Remarkable fee growth in Advisory and Financing underpinned by increased client activity; resilient Trade
Slide 16: Leapfrogged our peers and consistently outperforming
● UniCredit - Public Leapfrogged our peers and consistently outperforming Sustainable quality growth Capital excellence Superior profitability Top tier Net Revenue and Net Profit growth Our distinctive position emerges when looking at our … combined with operational excellence, notwithstanding disci
Slide 17: Setting the benchmark for European banking: Tomorrow
● UniCredit - Public Setting the benchmark for European banking Record quarter and first half results; profitable growth and superior distribution trajectory continue … Tomorrow SAME STRATEGY, NEW FOCUS QUALITY GROWTH, RESILIENT BASE GUIDANCE FURTHER IMPROVED Same vision, strategy Significant va
Slide 18: The Bank for Europe's Future
● UniCredit - Public Our vision and commitment to our stakeholders remain unchanged Inspired by our purpose: Empowering Communities to Progress THE SAME VISION … The Bank OUR PEOPLE Valued and for Europe’s empowered Future A new benchmark in banking OUR CLIENTS & COMMUNITIES Back at OUR INVESTORS th
Slide 19: Our winning strategy remains unchanged
● UniCredit - Public Our winning strategy remains unchanged Unite, Empower and Trust our PEOPLE Speed passionate Clients at CLEAR RISK FRAMEWORK shared purpose Unified Empowered PRIDE the center MOTIVATED TO WIN Shape the right BUSINESS MODEL Develop best-in-class PRODUCTS & DISTRIBUTION In-house TO
Slide 20: Our three levers continue delivering sustainable quality growth
● UniCredit - Public Our three levers continue delivering sustainable quality growth Maintain attractive capital accretive NII RoAC Net Boost fees incidence on earnings Revenue Keep CoR in the 20-25bps area, also leveraging €1.7bn overlays Quality RoTE Continue to deploy capital Continue to pursue o
Slide 21: Maintaining advantage through Risk, Operational and Capital excellence
● UniCredit - Public Maintaining advantage through Risk, Operational and Capital excellence An approach difficult to replicate, ensuring long-term sustainability A QUALITY-DRIVEN APPROACH UNIQUE, BEST-IN-CLASS LINES OF DEFENCE ● Quality focus: a decade of de-risking and vigilant origination resultin
Slide 22: Shifting focus to Top line: leading NII profitability, growing Fee base
● UniCredit - Public Shifting focus to Top line: leading NII profitability, growing Fee base Unparalleled quality and profitability of mix of our top line Maintaining a confident outlook … STATED NET INTEREST INCOME growth 1Q21/1Q24 +115% NII growth in Best-in-class Net NII RoAC ✓ #1 capital accreti
Slide 23: Vodeno-Aion: enhancing our technology and a platform to enter new markets
● UniCredit - Public Vodeno-Aion: enhancing our technology and a platform to enter new markets Bringing in-house a new proprietary technology and a fintech to enter new client segments and markets What Vodeno-Aion Brings Us ACQUISITION OF NEXT GENERATION COST-EFFECTIVE ENHANCE IN-HOUSE CORE BANKING
Slide 24: Orderly accelerated solvent wind-down of our Russian activities
● UniCredit - Public Orderly accelerated solvent wind-down of our Russian activities Russia contribution to Group steadily decreasing: drag to growth and profitability but minimum losses Cross-border exposure, bn Net Local Loans1, bn Existing 2025 Plan targets: CONTINUING A CLEAR STRATEGY outsized o
Slide 25: Confident to deliver on 2024 guidance and 2025-26 ambitions
● UniCredit - Public Confident to deliver on 2024 guidance and 2025-26 ambitions 2024 GUIDANCE 2025-26 FINANCIAL AMBITION Net revenue >23bn 10bn c. calendar year 1 Sustainable EPS, DPS Cost of Risk <20bps distributions Growth Strong growth (c.3.1bn interim, o/w Costs <9.5bn c.1.4bn cash dividend2 an
Slide 26: Re-defining the benchmark for European banking
● UniCredit - Public Re-defining the benchmark for European banking Record first half results; quality growth trajectory continues 14th quarter of growth SAME STRATEGY, NEW FOCUS Superior OCG QUALITY GROWTH, BLUE CHIP BANK RESILIENT BASE Significant RECORD RESULTS value to the sector defence Lines o
Slide 27: Annex
● UniCredit - Public Annex 27
Slide 28: Exceeding our ESG and related commitments
● UniCredit - Public Exceeding our ESG and related commitments Leading by example to support our clients in a just and fair transition LEAD BY EXAMPLE CLIENTS DIVERSITY & INCLUSION ACCOUNTABILITY Member of Net Zero Banking Focus on ESG share over total business Group Executive ESG representation at
Slide 29: Strategic investments across our countries and product factories
● UniCredit - Public Strategic investments across our countries and product factories New insurance In-house onemarkets OUR APPROACH strategy lead to funds successfully Trading centralization TOWARDS INVESTMENTS spearhead our pan- functioning across Increasing our Streamlined and investments in revi
Slide 30: Group P&L and selected metrics
● UniCredit - Public Group P&L and selected metrics All figures in bn unless otherwise stated 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 1H23 1H24 Revenue 5.9 6.0 6.0 6.0 6.4 6.3 11.9 12.7 o/w Net interest income 3.3 3.5 3.6 3.6 3.6 3.6 6.8 7.1 o/w Fees 2.0 1.9 1.8 1.8 2.1 2.1 4.0 4.2 Costs -2.3 -2.3 -2.3 -2.5 -
Slide 31: Updated base case macro scenario
● UniCredit - Public Updated base case macro scenario Scenarios 2024, 2025, 2026 EUROZONE UNICREDIT FOOTPRINT Group Group excl. Russia 2024 2.3 0.6 2024 3.2 1.2 2.4 0.8 2025 1.8 1.2 2025 2.5 1.5 2.1 1.5 2026 1.9 1.4 2026 2.4 1.7 2.1 1.7 Inflation,% ◼ GDP growth, % Estimates based on UniCredit Rese
Slide 32: Balance sheet and liquidity profile
● UniCredit - Public Balance sheet and liquidity profile (€bn) Assets 2Q24 Liabilities LIQUIDITY Other Assets 40 Balance 24 Other liabilities PROFILE 39 Cash and cash balances 50 Sheet Financial liabilities & hedging liabilities LCR >140% NSFR1 >125% 799bn 62 Equity and equity instruments Financial
Slide 33: Deposit details
● UniCredit - Public Deposit details Deposits from customers (Net of repos and IC - EoP) 464bn (-0.5% Q/Q) 2Q24 avg commercial deposits, bn vs 1Q24 Gross customer deposits rates 2Q24 (vs 1Q24) Italy Italy 181 -0.2% -0.59% Germany By (-2bps) Central Europe region Eastern Europe Germany 130 -0.5% -1.8
Slide 34: Loan details
● UniCredit - Public Loan details Loans to customers (Net of repos and IC - EoP) 407bn (-0.3% Q/Q) 2Q24 avg gross commercial performing loans, bn vs 1Q24 Gross customer performing loan rates 2Q24 (vs 1Q24) Italy Italy 144 -1.5% 4.83% Germany By (-1bp) Central Europe region Eastern Europe Germany 110
Slide 35: Total Financial Assets
● UniCredit - Public Total Financial Assets TFAs1, bn TFAs DYNAMICS IN 2Q 14 13 9 8 8 9 AuM+AuA gross sales +5% 3 2 2 2 3 3 Insurance gross sales 751 759 757 781 796 800 TFA evolution 800 quarterly 126 127 126 130 136 138 AuM 759 12 13 13 14 15 18 AuA 165 172 170 187 199 199 57 57 56 57 58 58 AuC In
Slide 36: Asset quality details
● UniCredit - Public Asset quality details TOTAL GROSS NPE TOTAL GROSS NPE ALMOST STABLE KEY HIGHLIGHTS − 45% Gross NPE evolution 12.6 12.1 12.0 11.7 12.1 11.7 NPE COVERAGE RATIO slightly up Q/Q at 47% on by quarter, bn book also driven by a State guaranteed single name 21.2 repayment Gross Past Due
Slide 37: Group gross loans breakdown by stages
● UniCredit - Public Group gross loans breakdown by stages (% of gross loans) o/w Gross NPE GROUP GROSS LOANS1 AND PROVISIONS EOP, bn 2.7% Stage 3 2.6% 2.7% 2.7% 2.6% 462 Stage 3 12 447 445 444 47.9% 48.1% 47.2% 45.5% 47.2% 440 12 12 12 Increase also related to a State 12 guaranteed single name repa
Slide 38: RWA details
● UniCredit - Public RWA details RWA, bn CONTINUED RWA EFFICIENCIES RWA evolution 299 295 290 285 by quarter 280 277 6% − Market risk Operational risk 295 Credit risk 277 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Q/Q EVOLUTION DETAILS, bn Y/Y EVOLUTION DETAILS, bn 1.0 1.4 0.9 0.1 -1.9 277 -10.9 -1.3 280 -2.9 -0
Slide 39: End notes
● UniCredit - Public End notes 39
Slide 40: Disclaimer
● UniCredit - Public Disclaimer This presentation may contain “forward-looking statements” which includes all jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction statements that do not relate solely to historical or current facts and which are where such an o
Slide 41: General notes related to this presentation
● UniCredit - Public General notes related to this presentation END NOTES ARE AN INTEGRAL PART OF THIS PRESENTATION All data throughout the documents are in Euros Numbers throughout the presentation may not add up precisely to the totals provided in tables and text due to rounding Russia includes th
Slide 42: Main definitions
● UniCredit - Public Main definitions Allocated Capital Calculated as 13.0% of RWA plus deductions CAFR Current Account Fee Reduction in Italy Clients Clients that made at least one transaction in the last three months Cost of risk Based on reclassified P&L and Balance sheet, calculated as (i) LLPs
Slide 43: Main definitions
● UniCredit - Public Main definitions HQLA Assets which can be easily and immediately converted into cash at little or no loss of value even in periods of severe idiosy ncratic and market High-Quality Liquid Assets stress. These assets are unencumbered, which means free of legal, regulatory, contrac
Slide 44: Main definitions
● UniCredit - Public Main definitions PD scenario Impacts deriving from probability of default scenario, including rating dynamics RoAC Annualized ratio between (i) Net profit after AT1/Cashes minus excess capital charge (where applicable) and (ii) average allocated capital, both as defined above Ro