UNICREDIT S.P.A. 1Q20 Results
6 May 2020
Agenda
Executive summary
Group P&L
Group balance sheet
Closing remarks
Annex
2
Decisive Covid-19 response to protect all stakeholders
Strong capital and liquidity position to support clients and communities
Executive summary
- Decisive action:continue to deliver efficient customer service while protecting well-being of all stakeholders
Covid-19 | Employees: group wide protective measures; effective business contingency plan activated | ||||
Clients:accelerated digital transformation; 28bn loans under moratoria1and 1bn with guarantees1 | |||||
Communities:local and regional donations; partnership with central banks and governments | |||||
Commercial | | Strong performance in first two monthswhile Covid-19 impacted March performance | |||
| NII:2.5bn, down 0.5% Q/Q; Fees:1.6bn, up 5.2% Y/Y | 2 | |||
performance | | Gross AuM sales: first two months | 2 | c.150% 2019 run-rate; last two weeks of March | at c.50% |
1Q20 net profit impacted bynon-operating items, in line with guidance | |||||
Profitability | | Integration costs in Italy (-1.33bn), Yapi transactions (-1.73bn)(a)and real estate disposals (+0.53bn) |
- Stated net profit:-2,706m;underlying net profitincluding IFRS9 macro scenario LLPs: -58m
- Strong capital:1Q20 CET1 MDA buffer 436bps; well above 200-250bps target throughout FY20
Capital, riskRealistic IFRS9 macro scenario(b)update with additional 0.9bn LLPs, FY20 cost of risk range 100-120bps;
and liquidityFY21 cost of risk range 70-90bps
- Strong liquidity:1Q20 LCR 143%4
- Reserve recycling through P&L, mainly FX reserves,-1.6bn. Positive impact from change in prudential consolidation +58bps on CET1 ratio.
- Annual GDP growth rates for FY20 are assumed to be-15.0% for Italy, -10.0% for Germany, -9.1% for Austria and -6.3% for CEE. The annual GDP recovery for FY21 is assumed to be
3+9.0% for Italy, +10.0% for Germany, +7.9% for Austria and +6.0% for CEE.
Resilient business model underpinned by very strong CET1 MDA buffer
Revenues, bn
Costs, bn
CoR, bps
Gross NPE, bn
Gross NPE ratio, %
Underlying RoTE2, %
CET1 MDA buffer, bps
Tangible equity, EoP bn
Underlying net profit3, bn
Executive summary | |||||
1Q19 | 4Q19 | 1Q20 | %∆ vs 4Q19 | %∆ vs 1Q19 | |
4.8 | 4.9 | 4.4 | -9.7% | -8.2% | |
-2.5 | -2.5 | -2.5 | -1.3% | -0.7% | |
40 | 137 | 104 1 | -33 | +64 | |
37.6 | 25.3 | 24.9 | -1.5% | -33.7% | |
7.6 | 5.0 | 4.9 | -0.2p.p. | -2.7p.p. | |
9.3 | 10.8 | -0.4 | -11.2p.p. | -9.7p.p. | |
219 | 312 | 436 | +124 | +218 | |
49.1 | 53.0 | 51.2 | -3.4% | 4.3% | |
1.1 | 1.4 | -0.1 | n.m. | n.m. |
4
Early decisive action to protect stakeholders in response to Covid-19
Executive summary
"One Bank, One UniCredit"- Italy learnings applied as best practice; first mover in Germany, Austria & CEE
- Rapid response in Italy:achieved c.10% presence in large buildings and c.40% in branches in Italy in two weeks GovernanceEarly deployment of c.17m personal protective equipment items; c.24k protective screens
- Today:60% (>50k) of all employees working remotely, including almost 90% in headquarters
- Proactive communication:over 100k visitors to dedicated One.UniCredit Covid-19 microsite
Operational flexibility thanks to resilient and scalable infrastructure | |
Infrastructure | Remote & secure access:VPN capacity up from 4k to 60k users; 10k Virtual Desktop users onboarded |
IT & staff resources:8k new laptops; 8k WebEx licences; 5x increase in Skype for Business | |
Clients' digital activity:active mobile banking users up 27% Y/Y; digital sales up 15% Y/Y | |
Doing the right thing for our people and communities | |
Employees:extension of Group healthcare cover to include Covid-19; top management bonuses waived; 900 |
Stakeholders
Business
5
apprentice contracts made permanent
- Frontline support:sourcing and donation of protective equipment and respirators for hospitals; donation to numerous health related and non profit organisations including 5m team contribution to UC Foundation; 0% loans for healthcare workers
Continued support for our clients - partnership with central banks, government and regulators
- First bank in Italy to offer moratoria on a voluntary basis
- Provided 28bn to 279k clients under moratoria and 1bn guarantees
- Faster payments to group's suppliers to support SME cash flows
- Significant increase in CIB volumes to support corporate clients
Covid-19 crisis is accelerating client adoption of multi channel
Executive summary
1Q19 | 1Q20 | ∆ Y/Y | |
# Active digital users, m | 7.2 | 7.5 | +5% |
# Active mobile banking | 100 | 127 | +27% |
users, indexed | |||
# Digital sales, indexed | 100 | 115 | +15% |
# Digital sales/total sales, % | 12 | 18 | +47% |
Covid-19 represents the opportunity to:
- Accelerate change and transformation:
- Full digital product sales offer
- Expanded remote advisory
- Redesign processes
- Reallocate investment priorities
6
UniCredit has provided 28bn to 279k clients under the moratoria
Executive summary
Country2 | # Clients, k |
105
1
8
CEE165
Moratoria1
Volume, bn | % of total | |
portfolio | ||
19.4 | 8 | |
0.2 | <0.3 | |
1.4 | 2 | |
o/w 5.0bn in opt-out3 | ||
and 2.0bn in opt-in | ||
7.0 | 12 |
State guarantee programmes
- From April, loan programmes backed by state guarantees rolled out in most geographies
- UniCredit granted the first loan in Italy under the SACE guarantee
- As of 24 April, UniCredit has granted 1bn in loans backed by state guarantees as processes have only recently been put in place by the different administrations. UniCredit expects to reach around 15bn of guarantees in Italy
Subtotal27928
7
A simple pan-European commercial banking business, diversified and resilient
Executive summary | ||||||||
Commercial | Customer | Customer | Underlying CoR | |||||
GDP, % | # Clients, m | GOP, m | excl. IFRS9 | |||||
bank1 | loans2, bn | deposits2, bn | ||||||
macro, bps | ||||||||
2020 | 2021 | 1Q20 | ||||||
-15.0% | +9.0% | 7.6 | 134 | 155 | 754 | 65 | ||
-10.0% | +10.0% | 1.5 | 88 | 92 | 196 | 23 |
-9.1% | +7.9% | 1.1 | 45 | 48 | 90 | 33 |
CEE | -6.3% +6.0% | 5.7 | 66 | 70 | 578 | 70 |
8
Proactive capital allocation and proven discipline in risk management
Executive summary
Accelerated balance sheet | 1Q19 | 4Q19 | 1Q20 |
derisking | |||
BTP banking book, bn
54.6 | |
44.8 | 43.9 |
BTP portfolio reduction
No carry trades
No volume lending
Cumulative gross proceeds of | 0.5 | >5.0 | >7.0 |
disposals(a), bn | |||
Gross NPE ratio, % | 7.6 | 5.0 | 4.9 |
Coverage ratio, % | 61.7 | 65.2 | 65.2 |
Underlying cost of risk, bps | 40 | 481 | 292 |
Sale of non strategic assets
Below 5% for the first time thanks to
acceleration of Non Core run-off
Among the highest for
eurozone banks
Underlying CoR improving thanks to focus on high quality origination
9(a) Cumulative value as at 1Q20 include disposal of non-strategic participations (including Yapi, Mediobanca and Fineco) and real estate assets
Agenda
Executive summary
Group P&L
Group balance sheet
Closing remarks
Annex
10
A strong start to the quarter, with Covid-19 impacting from March
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |
4Q19 | 1Q19 | |||||
Total revenues | 4,768 | 4,850 | 4,378 | -9.7% | -8.2% | |
o/w Net interest | 2,578 | 2,515 | 2,502 | -0.5% | -3.0% | |
o/w Dividends | 167 | 133 | 102 | -23.4% | -39.0% | |
o/w Fees | 1,541 | 1,629 | 1,620 | -0.5% | +5.2% | |
o/w Trading | 442 | 464 | 165 | -64.5% | -62.7% | |
o/w Other | 39 | 108 | -11 | n.m. | n.m. | |
Operating costs | -2,510 | -2,525 | -2,493 | -1.3% | -0.7% | |
Gross operating profit | 2,258 | 2,325 | 1,885 | -19.0% | -16.5% | |
LLPs | -467 | -1,645 | -1,261 | -23.4% | n.m. | |
Net operating profit | 1,791 | 681 | 624 | -8.3% | -65.1% | |
Group P&L - Summary
Main drivers
- Commercial revenues stable Y/Y thanks to a strong fee performance, up 79m Y/Y or 5.2%, with investment (upfront) fees benefitting from a very strong performance in January and February
- Total revenues impacted by lower trading, disposals andnon-recurring items. Q/Q revenues down 472m (9.7%) mainly due to some non-recurring items not linked to the operational profitability of the bank
- Trading: down 300m Q/Q, of which-174m from XVA and -65m from non-recurring valuation adjustments on participations like Visa
- Dividends:-31m Q/Q mainly due to disposals such as Mediobanca
- Balance of other income and expenses:-120m Q/Q mainly from Ocean Breeze and other disposals
11
Net profit impacted by non-operating items, in line with guidance
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |
4Q19 | 1Q19 | |||||
Net operating profit | 1,791 | 681 | 624 | -8.3% | -65.1% | |
Other charges & provisions | -214 | -316 | -528 | +66.9% | n.m. | |
o/w Systemic charges | -538 | -82 | -538 | n.m. | -0.0% | |
Integration costs | -3 | -657 | -1,347 | n.m. | n.m. | |
Profit (loss) from investments | 90 | -665 | -1,261 | +89.7% | n.m. | |
Profit before taxes | 1,664 | -958 | -2,512 | n.m. | n.m. | |
Income taxes | -494 | 119 | -140 | n.m. | -71.6% | |
Net profit from discontinued | 65 | 11 | 0 | n.m. | n.m. | |
operations | ||||||
Stated net profit | 1,175 | -835 | -2,706 | n.m. | n.m. | |
Underlying net profit2 | 1,129 | 1,416 | -58 | n.m. | n.m. | |
Group P&L - Summary
Main drivers
- Majority of annual systemic charges booked in 1Q
- Integration costs booked as per guidance, following agreement with Italian trade unions for the implementation of Team 231
- Profit from investments include-1,669m from the Yapi transactions (mainly due to release of negative FX reserves), +516m from real estate disposals, and -72m due to an IFRS9 technical price adjustment on debt securities following the new IFRS9 macro scenario
12
Underlying net profit impacted by decision to anticipate realistic IFRS9 macro scenario impairments
Group P&L - Underlying net profit | |||||||||||||
Underlying net profit1by division 1Q20, m | |||||||||||||
126 | |||||||||||||
12 | 18 | 8 | |||||||||||
-2 | |||||||||||||
-58 | |||||||||||||
-58 | |||||||||||||
-162 | |||||||||||||
1Q20 | CB Italy(a) | CB Germany(a) | CB Austria(a) | CEE(a) | CIB(a) | Group CC | Non Core | Group(b) | |||||
underlying | 10.4% | 7.2% | -1.2% | 12.7% | 5.2% | n.m. | n.m. | ||||||
RoAC excl. |
IFRS9 macro2,3
- All divisions impacted by additional impairments following update to IFRS9 macro scenario3and booking of majority of annual systemic charges in 1Q20, which has the biggest relative impact for CB Austria
- CEE's strong underlying profitability allowed it to absorb both the IFRS9 macro scenario LLPs and seasonal systemic charges
- CIB also impacted by lower trading income
- Underlying RoAC including IFRS9 macro scenario impairments: CB Italy 0.4%, CB Germany 1.4%, CB Austria-8.6%, CEE 5.4%, CIB -0.1%.
13(b) For the Group, underlying RoTE is -0.4%. Underlying Group RoTE excluding IFRS9 macro scenario impairments is 6.5%.
Net interest lower due to pressure on customer loan rates
Group P&L - NII
Net interest1Q/Q, m
Average Euribor 3M -0.40%(-0bps Q/Q)
-3.0% | |||||||||
-0.5% | |||||||||
2,578 | 2,515 | 2,502 | |||||||
-8 | -48 | -6 | +7 | +13 | +6 | ||||
+23 | |||||||||
Commercial dynamics: -32m | |||||||||
1Q19 | 4Q19 | Performing loans | Deposits | Term | TLTRO | Investment | Other2 | 1Q20 | |
volumes | rates | funding | benefit / | portfolio & | |||||
Tiering | markets/ | ||||||||
treasury |
- Adjusting for days effect(-13m Q/Q) and one-offtax-related item3in CB Germany (+50m in 1Q20), net interest income -2.0% Q/Q
- Contribution from deposit tiering of +26m in 1Q20 (+8m Q/Q)
14
Fees up strongly in January and February prior to Covid-19 impact
Group P&L - Fees
Fees, m
+5.2% | ||||||||
-0.5% | Q/Q | Y/Y | ||||||
1,541 | 1,629 | 1,620 | ||||||
Investment fees | 543 | 637 | 620 | -2.6% | 14.2% | |||
Financing fees | 443 | 429 | 438 | 2.1% | -1.0% | |||
Transactional fees | 555 | 563 | 562 | -0.2% | 1.2% | |||
1Q19 | 4Q19 | 1Q20 |
- AuM upfront fees increased 19.2% Y/Y thanks to a strong January and February, withCovid-19 impact on gross sales seen in March. AuM management fees +4.7% Y/Y thanks to higher average volumes
- Financing fees-1.0% Y/Y. Higher lending fees in CIB being more than offset by lower credit protection insurance sales in CB Italy due to lockdown
- Transactional fees +1.2% Y/Y with higher fees from repricing of current accounts in CB Italy offsetting lower debit and credit card
15fees in all countries, following lockdown
Client driven trading income down 34% Q/Q because of lower client activity
Group P&L - Trading and dividends
Trading income, m | Dividends1, m | |||||
XVA2 | Client | Others | ||||
driven | ||||||
(w/o XVA) |
-62.7% | |||
442 | -64.5% | ||
464 | |||
107 | |||
400 | 165 | ||
300 | -34.4% | ||
128 | 197 | ||
58 | 35 | ||
-86 | -67 | ||
1Q19 | 4Q19 | 1Q20 |
-39.0% | ||
167 | -23.4% | |
133 | ||
102 | ||
1Q19 | 4Q19 | 1Q20 |
- Client driven trading income (excluding XVA) down 103m Q/Q(-34% Q/Q) with solid performance in equities, commodities and FX more than offset by credit spread widening impacting some market facilitation portfolios. Overall trading income impacted as well by XVA (-174m Q/Q) and non-recurring valuation adjustments (-65m Q/Q)
- Dividends down 39.0% Y/Y mainly due to partial disposal of Yapi stake(-29m Y/Y) and disposal of Mediobanca stake (-18m Y/Y)
16
Costs lower in 1Q20 thanks to continued discipline
Group P&L - Costs
Trading income, m | Costs, m |
-0.7%
-1.3%
Q/Q Y/Y
2,510 | 2,525 | 2,493 | |||
Non HR costs1 | 954 | 976 | 951 | -2.5% | -0.3% |
HR costs | 1,555 | 1,549 | 1,542 | -0.5% | -0.9% |
1Q19 | 4Q19 | 1Q20 | |||
Cost/Income | 52.6% | 52.1% | 56.9% |
- Lower HR costs Y/Y mainly thanks to lower FTEs(-1.4% Y/Y) and lower pension costs in CB Austria
- Non HR costs down 0.3% Y/Y primarily thanks to lower credit recovery costs in Non Core, consulting and travel expenses, offsetting higher IT investment and extraordinaryCovid-19 costs
17
Underlying CoR so far unaffected by Covid-19
Group P&L - LLPs and CoR | |||||||||||||||
Loan loss provisions, m | Underlying cost of risk1, bps | ||||||||||||||
Regulatory headwinds on LLPs | |||||||||||||||
Additional impairments from IFRS9 macro | Stated CoR | ||||||||||||||
Non Core LLPs for updated rundown strategy | -38.7% | ||||||||||||||
Underlying LLPs | 1,645 | 137 bps | 48 | Stated CoR | |||||||||||
104 bps | |||||||||||||||
23 | 40 | ||||||||||||||
1,261 | |||||||||||||||
5 | 29 | ||||||||||||||
1,049 | |||||||||||||||
902 | |||||||||||||||
467 | -38.2% | ||||||||||||||
467 | 573 | 354 | |||||||||||||
1Q19 | 4Q19 | 1Q20 | 1Q19 | 4Q19 | 1Q20 |
- Underlying CoR, excluding the additional impairments for the updated IFRS9 macro scenario, equal to 29bps in 1Q20, below Team 23 guidance
- FY20 Group CoR is expected to be in the range of100-120bps, a combination of IFRS9 macro scenario LLPs and the recognition of sector and specific LLPs, the latter likely to occur towards the end of the year once the moratoria expire
18FY21 Group CoR is expected to be in the range of 70-90bps
Disciplined underwriting reflected in expected loss on new origination
Underlying expected loss(a)on stock1, bps
38 | 35 | 36 |
1Q19 | 4Q19 | 1Q20 |
Underlying expected loss(a)on new business1, bps
33 | 31 | 29 |
Group P&L - Expected loss
1Q20 expected loss(a)- stock distribution
avg EL>1%
8%
0.36%30%
62%
avg EL<0.36%
1Q20 expected loss(a)- new business distribution3
avg EL>1%
0.29% | 5% |
22%
72%
avg EL<0.29%
- Expected loss on new business in 1Q20 below Team 23 guidance and solidly in the investment grade category4
19(a) Group excluding Non Core.
Realistic assumptions underpin CoR outlook
Group P&L - LLPs and CoR
Covid-19 impact on GDP, illustrative exit trajectories, Western Europe
Level of | Different shape of exit | ||||||||||
production | trajectory moves FY20 | ||||||||||
GDP by c. 6p.p. | |||||||||||
Recover in supply and demand | |||||||||||
Progressive removal | |||||||||||
of containment | |||||||||||
First | Increase of | measures from May | FY20 GDP in Europe | ||||||||
containment | |||||||||||
Gap in recovery due | expected at c.-13% | ||||||||||
containment | measures in | ||||||||||
to high lockdown | |||||||||||
measures in | Mar. | ||||||||||
Feb. | |||||||||||
2 months | |||||||||||
Approx. 2 months | |||||||||||
Low point | delay in low point | ||||||||||
lockdown | lockdown | ||||||||||
Months | |||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Exit trajectory A
Exit trajectory B
20
Majority of loan book in more resilient sectors
Group P&L - LLPs and CoR
GDP growth, % | 1Q20 portfolio composition1, bn |
9.0 | 10.0 |
-15.0 | -10.0 | ||
2020 | 2021 | 2020 | 2021 |
7.9 | 6.0 |
CEE
-9.1 | -6.3 | ||
2020 | 2021 | 2020 | 2021 |
Covid-19 impact, with selected examples
~485 | ||||
High | 10% | | High impact (10%) | |
- | Transport, Travel & Airline | |||
- | Shipping | |||
Medium | 13% | - | Tourism | |
- | Oil | |||
- | Automotive (suppliers) | |||
| Medium impact (13%) | |||
Moderate | 20% | - | Construction | |
- | Real Estate | |||
| Moderate impact (20%) | |||
- | Automotive (OEM) | |||
- | Private individuals (other) | |||
56% | | Low impact (56%) | ||
Low | - | Agricultural | ||
- | Utilities | |||
- | Healthcare & pharma | |||
- | Private individuals (mortgages) |
21
IFRS9 macro scenario LLPs mostly driven by sectors more impacted by Covid-19
Group P&L - LLPs and CoR
Group cost of risk, bps
IFRS9 specific LLPs
Breakdown by segment
Regulatory headwinds | 104 | |
IFRS9 macro | Low Impact | High Impact |
Underlying | 33% | 33% |
74 | ||
46 | ||
12 | 15% | 19% |
Moderate Impact | Medium Impact | |
34 | 29 | LLPs: 902m |
FY20 | 1Q20 | |
TEAM 23 | actual |
22
FY20 CoR driven by IFRS9 macro scenario LLPs and expected recognition of sector and specific LLPs as risks materialise
Group P&L - LLPs and CoR
FY20 Group cost of risk
Regulatory headwinds2 | |
Underlying, IFRS9 macro | 100-120 |
§or specific | 0-10 |
Underlying | |
46 | |
12 | |
100-1103 | |
34 |
FY20 Underlying, IFRS9 macro & sector specific LLPs1
Breakdown by segment
Low Impact
27%
39%High Impact
17%
FY20 | FY20 |
TEAM23 | FCT |
Moderate Impact
16%
Medium Impact
23
Agenda
Executive summary
Group P&L
Group balance sheet
Closing remarks
Annex
24
Resilient underlying asset quality
Group balance sheet - Group excluding Non Core
Group excluding NonTradingCore - Nonincome,performing exposures1, bn
-15.1% | |||
19.8 | +0.7% | ||
16.7 | 16.8 | ||
Net NPEs | 8.3 | 6.9 | 6.9 |
1Q19 | 4Q19 | 1Q20 | |
Gross NPE | 4.2% | 3.4% | 3.4% |
ratio |
o/w Gross bad loans, bn
-24.1% | ||||||||||||||
9.9 | -0.3% | |||||||||||||
Net bad | 7.5 | 7.5 | ||||||||||||
loans | 2.9 | 2.1 | 2.1 | |||||||||||
1Q19 | 4Q19 | 1Q20 | ||||||||||||
Coverage | 70.6% | 71.9% | 72.1% | |||||||||||
ratio | ||||||||||||||
o/w Gross unlikely to pay, bn
-6.5%
+1.7%
Net NPE | 1.8% | 1.4% | 1.4% | |
ratio | ||||
Coverage | 58.1% | 58.7% | 58.8% | |
ratio | ||||
-1.8% | +0.9% |
9.1 | |
Net UTP | 4.8 |
1Q19 | |
Coverage | 47.2% |
ratio | |
8.3 | 8.5 |
4.2 | 4.3 |
4Q19 | 1Q20 |
49.3% | 49.4% |
- Gross NPE ratio for Group excluding Non Core close to average of European banks. NPL ratio for UniCredit using more conservative EBA definition is 2.8% at 1Q20 compared to weighted average of EBA sample banks2of 2.7%
25
The end notes are an integral part of this Presentation. See pages62-69at the back of this presentation for information related to the financial metrics and defined terms in this presentation
Non Core rundown continues with further reductions in 1Q20
Group balance sheet - Non Core | ||
Non Core - Non performing exposures, bn | ||
Actions on Non Core rundown, bn |
1Q20
-54.4% | |||
17.7 | |||
-5.7% | |||
8.6 | 8.1 | ||
Net NPEs | 6.1 | ||
1.9 | 1.7 | ||
1Q19 | 4Q19 | 1Q20 |
Disposals0.2
Recoveries0.1
Write-offs | 0.2 |
Back to Group excl. | 0.1 |
Non Core1 |
Repayments-
Coverage | 65.8% | 78.1% | Other | - |
ratio | 78.4% | |||
Total0.5
- Rundown better than expected in what is a seasonally quiet quarter
- Further reduction in Non Core portfolio led by disposals but with all actions of Non Core rundown contributing
26
Very strong capital position, significant increase in MDA buffer
Group balance sheet - Capital walk
Fully loaded Common Equity Tier 1 ratio, %
MDA buffer, | 312 | 1 | Including 77bps | 436 |
of CRD5 Art.104a | ||||
bps | ||||
benefit |
+37bps | +33bps | 13.44% | ||||||||||||||||||||||
13.22% | -2bps | -1bp | ||||||||||||||||||||||
-20bps | ||||||||||||||||||||||||
-16bps | ||||||||||||||||||||||||
-8bps | ||||||||||||||||||||||||
FVOCI: -13bps | ||||||||||||||||||||||||
FX: -24bps | Regulation, models and | |||||||||||||||||||||||
DBO: +17bps | ||||||||||||||||||||||||
procyclicality: -5bps | ||||||||||||||||||||||||
RE: -1bp | ||||||||||||||||||||||||
4Q19 | Release of | Underlying | AT1/CASHES | FVOCI 4,5/FX 6/ | Other items RWA dynamics | Material | 1Q20 | |||||||||||||||||
stated 1 | FY19 dividend | net profit 2 | coupon 3 | DBO 7/other | non-operating | |||||||||||||||||||
CET 1 capital, | 50.1 | items 8 | 48.5 | |||||||||||||||||||||
bn | ||||||||||||||||||||||||
Total RWAs, bn | 378.7 | 361.0 |
- 1Q20 CET1 MDA buffer 436bps, +124bps Q/Q thanks to higher CET1 Q/Q, CRD5 Art.104a benefit and lower SREP P2R
- CET1 MDA buffer well above200-250bps target throughout FY20. Recently announced CRR changes and ECB recommendations to use additional flexibility will bring a further improvement, in FY20, of more than 80bps in CET1 transitional ratio and more than 20bps in CET1 fully loaded ratio
- Change in prudential consolidation of Yapi +58bps (RWAs-19.7bn)
27Other items include higher deductions (AVA, DVA and OCS)
TLAC MDA buffer of 391bps
Group balance sheet - TLAC
TLAC
Buffer | Regulatory requirement | Actual data | TLAC buffer | |||
23.50% | well above | |||||
21.00% | 2.50% | 50-100bps | ||||
391bps | range target | |||||
2.99% | 391bps | |||||
2.53% | ||||||
13.44% | 2.04% | |||||
436bps | 19.60% | |||||
17.10% | ||||||
9.08% | ||||||
1Q20 | Additional Tier 1 | Tier 2 | Senior | 1Q20 | Senior | 1Q20 |
CET1 ratio1 | non preferred | TLAC | preferred | TLAC | ||
& other2 | subordination |
- 1Q20 TLAC ratio 23.50%, TLAC MDA buffer of 391bps, well above upper end of the target range of50-100bps
- 1Q20 TLAC ratio 23.50%, o/w 21.00% TLAC subordination ratio and 2.5% senior preferred exemption
- UniCredit has successfully executed 4.5bn of TLAC subordinated funding to c. 77% of subordinated component of plan
28
Tangible equity impacted by IFRS9 macro scenario LLPs and Team 23 integration costs
Group balance sheet - Tangible Equity
Tangible equity (end-of-period), bn | Tangible book value per share1 |
-5.5% | +9.8% | -3.4% | +9.5% | -3.5% | |||||||||||||
-5.6% | |||||||||||||||||
49.3 | 49.1 | 51.1 | 52.0 | 53.0 | 51.2 | 23.3 | 23.7 | ||||||||||
47.8 | 48.3 | ||||||||||||||||
46.6 | 22.9 | 22.9 | |||||||||||||||
22.2 | 22.0 | ||||||||||||||||
21.6 | |||||||||||||||||
21.4 | |||||||||||||||||
20.9 | |||||||||||||||||
1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 |
0.7bn | 0.6bn | ∑1.3bn | 0.32 | 0.27 | ∑0.59 | ||||||||||||
Dividends/DPS | |||||||||||||||||
29 |
Agenda
Executive summary
Group P&L
Group balance sheet
Closing remarks
Annex
30
UniCredit is ready for the next phase as lockdown restrictions begin to ease
Closing remarks
Open branches1
Commercial | Phase 1 | Phase 2(a) |
Bank | ||
43%90%
30%60%
63%90%
Principles
- Health and safety of employees and clients is the Group's top priority and will always remain
- Progressive lifting of lockdown measures,so-called 'Phase 2', will enable gradual branch re-opening over coming weeks
- Phase 2 will be based on local authorities' recommendations as well asUniCredit-specific measures:
- All decisions will be based on data, not dates
- Daily monitoring will allow us to control developments
- Employees will be invited not required to come to the office; we will listen and adapt to their needs
UniCredit will always "Do the right thing!"
31(a) Target for end of May 20.
Doing the right thing for all our stakeholders
Closing remarks
UniCredit's core strengths and focussed business model to ease Covid-19 impact:
- Pan-Europeanscale:leadership position in our 13 core markets (top 3 bank in 8 out of 13 markets)
- Customer focus:16m of customers with a unique personal banking relationship
- Geographic and business diversification:resilience in the face of market conditions
- Digital transformation:accelerated execution of our plans thanks to strategic investment
- Strong capital buffer:CET1 MDA buffer well above 200-250bps target throughout FY20
The pillars of Team 23 remain our strategic priorities:
Grow and strengthen our client franchise | | Disciplined risk management & controls |
Transform and maximise productivity | | Capital and balance sheet management |
An updated plan reflecting current conditions will be presented at a Capital Markets Day towards the end of the year or early next year
We will continue to protect our employees and support our customers and
32
communities in order to best serve our shareholders
Agenda
Executive summary
Group P&L
Group balance sheet
Closing remarks
Annex
33
ESG ratings1
Annex - ESG
Rating range | Comment |
5.0
EE+
(Very strong)
B
BBB
Medium
(30-20)
Lowest | Highest | ||
Level | Level | ||
ESG Rating: | |||
0 | 1 | 2 | 3 | 4 | 5 | |||||
Ratings and level of compliance | ||||||||||
F | FF | FFF | E | EE+ | EEE | |||||
Management (climate change): | ||||||||||
E | D | C | B | A | ||||||
ESG Rating: | ||||||||||
CCC | B | BB | BBB | A | AA | AAA |
ESG Risk Rating:
Severe High MedLow Neg 100-4040 - 3030 - 2020 - 10 10 - 0
- UniCredit is ranked in the 99th percentile of banks
- Ranked at max level in all categories (E, S and G)
- Only bank in Italy with an EE+ rating, strong compliance and the ability to manage key reputational risks
- UniCredit's score is above average of the financial sector (ranking C) and European and Global averages (all sectors also ranking C)
- Positioned in the middle of the distribution for the banking industry
- Score penalised by "controversies" (in particular US sanctions which have been settled already)
- High risks highlighted related to being aG-SIFI (seen as a risk for financial stability) and high employees turnover rate due to restructuring
- Medium exposure and strong management of material ESG issues
- UniCredit is noted for its strong corporate governance performance
34
Comprehensive ESG 2023 targets
Annex - ESG
Policy and principles
Endorsement of Task Force on Climate Related Financial Disclosures (TCFD)1 | |
Adhere to | recommendations as clear signal of UniCredit environmental commitment |
the highest | Adhesion to Principles for Responsible Banking1 |
standards | Participation in the development of PACTA2methodology for lending portfolio |
Social impact banking
Support | ||
financial | Support projects with a | 1 |
access and | positive social impact, bn | |
inclusion
Ranking position
Strong partner | Position in EMEA combined | Top | External | Incentivises an improved | LTIP | |||
in Green | Green Bonds & ESG-linked | ranking while penalising a | ||||||
5 | ESG rating4 | |||||||
financing | loans3 | worse ranking | ||||||
Climate actions | ||||||||
Be a | Exposure to renewable energy | Energy efficiency loans to | Reduction of our Green | |||||
partner in | sector5, % increase | 25 | WEU SME, % increase | +34 | Keep | house gas emissions by | 60 | |
the shift | working on | 20207, % | ||||||
towards a | New origination of energy | Energy efficiency loans | our direct | Usage of renewable | ||||
low carbon | efficiency loans in CEE6, | >6 | to WEU Individuals, % | +25 | impacts | energy in UniCredit | 100 | |
economy | % total loan | increase | buildings in WEU, % |
35
CB Italy
Strong fee performance in January & February, Covid-19 impact from March
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |
4Q19 | 1Q19 | |||||
Total revenues | 1,779 | 1,757 | 1,689 | -3.9% | -5.1% | |
o/w Net interest | 848 | 804 | 767 | -4.6% | -9.6% | |
o/w Fees | 910 | 929 | 917 | -1.3% | +0.7% | |
Operating costs | -954 | -945 | -934 | -1.1% | -2.1% | |
Gross operating profit | 825 | 812 | 754 | -7.1% | -8.5% | |
LLPs | -206 | -270 | -649 | n.m. | n.m. | |
Net operating profit | 619 | 542 | 105 | -80.6% | -83.1% | |
Integration costs | 0 | -81 | -1,027 | n.m. | n.m. | |
Stated net profit | 388 | 402 | -730 | n.m. | n.m. | |
Underlying net profit1 | 388 | 458 | 12 | -97.4% | -96.9% | |
Stated RoAC | 13.8% | 13.1% | -25.1% | -38.2p.p. | -38.9p.p. | |
Underlying RoAC1 | 13.8% | 14.9% | 0.4%(a) | -14.5p.p. | -13.4p.p. | |
C/I | 53.6% | 53.8% | 55.3% | +1.5p.p. | +1.7p.p. | |
CoR (bps) | 60 | 80 | 193 | 114 | 133 | |
36(a) Underlying RoAC excluding IFRS9 macro scenario impairments was 10.4%.
Annex - divisional data
Main drivers
- NII-4.6% Q/Q mainly due to changes in deposit remuneration
- After a very strong performance in January and February, new business volumes were impacted from second week of March by the lockdowns (AuM/AuC, insurance sales) with new production of household mortgages, consumer finance impacted from end of March
- LLPs include 432m in 1Q20 related to update of the IFRS9 macro scenario. The underlying cost of risk was 65bps
CB Germany
NII benefitted from material one-off item
Annex - divisional data
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |||
4Q19 | 1Q19 | |||||||
Total revenues | 596 | 646 | 622 | -3.7% | +4.2% | |||
o/w Net interest | 383 | 385 | 420 | +9.1% | +9.6% | |||
o/w Fees | 184 | 178 | 196 | +10.0% | +6.5% | |||
Operating costs | -416 | -416 | -426 | +2.3% | +2.3% | |||
Gross operating profit | 180 | 230 | 196 | -14.6% | +8.8% | |||
LLPs | -21 | -48 | -153 | n.m. | n.m. | |||
Net operating profit | 159 | 182 | 43 | -76.2% | -72.7% | |||
Stated net profit | 141 | 90 | 15 | -83.6% | -89.6% | |||
Underlying net profit1 | 117 | 131 | 18 | -86.2% | -84.6% | |||
Stated RoAC | 12.2% | 7.7% | 1.1% | -6.6p.p. | -11.1p.p. | |||
Underlying RoAC1 | 10.1% | 11.3% | 1.4%(a) | -9.9p.p. | -8.7p.p. | |||
C/I | 69.8% | 64.4% | 68.5% | +4.0p.p. | -1.3p.p. | |||
CoR (bps) | 10 | 22 | 69 | 48 | 59 | |||
Main drivers
- NII benefitted from a materialone-off item linked to a tax litigation case. Adjusting for this, NII was down 3.9% Q/Q while revenues fell 4.2% Y/Y, the latter also due to lower rental income post real estate disposals
- Y/Y growth in fees mainly thanks to financing fees (+15.4% Y/Y)
- The main impacts fromCovid-19 were strong credit demand from corporates and lower investment management fees in March
- LLPs include 96m in 1Q20 related to update of the IFRS9 macro scenario. The underlying cost of risk was 23bps
37(a) Underlying RoAC excluding IFRS9 macro scenario impairments was 7.2%.
CB Austria
Very strong fee income in January & February, Covid-19 impact from March
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |
4Q19 | 1Q19 | |||||
Total revenues | 354 | 415 | 342 | -17.7% | -3.5% | |
o/w Net interest | 168 | 171 | 155 | -9.3% | -7.5% | |
o/w Fees | 145 | 166 | 160 | -3.4% | +10.7% | |
Operating costs | -255 | -248 | -252 | +1.8% | -1.2% | |
Gross operating profit | 99 | 168 | 90 | -46.5% | -9.5% | |
LLPs | 8 | -31 | -85 | n.m. | n.m. | |
Net operating profit | 107 | 136 | 5 | -96.5% | -95.6% | |
Stated net profit | 67 | 222 | -58 | n.m. | n.m. | |
Underlying net profit1 | 67 | 329 | -58 | n.m. | n.m. | |
Stated RoAC | 9.5% | 30.9% | -8.6% | -39.4p.p. | -18.0p.p. | |
Underlying RoAC1 | 9.4% | 45.8% | -8.6%(a) | -54.4p.p. | -17.9p.p. | |
C/I | 72.0% | 59.6% | 73.7% | +14.1p.p. | +1.7p.p. | |
CoR (bps) | -7 | 28 | 75 | 47 | 82 | |
Annex - divisional data
Main drivers
- NII fell 9.3% Q/Q mainly due toone-off items and base rate effects
- After a very strong performance in January and February, management and upfront investment fees were both impacted byCovid-19. Transaction fees (card business) also affected in March by lockdowns
- LLPs included 48m in 1Q20 related to update of the IFRS9 macro scenario. The underlying cost of risk was 33bps
- Systemic charges totalled 78m in 1Q20(-12.7% Y/Y) with almost all of the expected FY20 charges booked this quarter
38(a) Underlying RoAC excluding IFRS9 macro scenario impairments was -1.2%.
CEE
Resilient performance despite revenue headwinds and IFRS9 macro LLPs
Data in m (a) | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |
4Q19 | 1Q19 | |||||
Total revenues1 | 991 | 1,027 | 959 | -5.7% | -2.9% | |
o/w Net interest | 672 | 676 | 637 | -4.5% | -4.7% | |
o/w Fees | 204 | 218 | 187 | -13.0% | -7.4% | |
Operating costs | -364 | -408 | -381 | -5.6% | +5.1% | |
Gross operating profit | 627 | 620 | 578 | -5.8% | -7.5% | |
LLPs | -100 | -152 | -297 | +98.5% | n.m. | |
Net operating profit | 527 | 468 | 281 | -39.6% | -46.9% | |
Stated net profit | 310 | 304 | 115 | -62.4% | -63.6% | |
Underlying net profit2 | 309 | 336 | 126 | -62.5% | -59.2% | |
Stated RoAC | 15.3% | 14.2% | 4.9% | -9.4p.p. | -10.4p.p. | |
Underlying RoAC1 | 15.3% | 15.8% | 5.4%(a) | -10.4p.p. | -9.9p.p. | |
C/I | 36.7% | 39.7% | 39.7% | +0.1p.p. | +3.0p.p. | |
CoR (bps) | 61 | 90 | 177 | 87 | 116 | |
- Stated numbers at current FX. Variations Q/Q and Y/Y at constant FX (RoAC, C/I and CoR variations at current FX).39(b) Underlying RoAC excluding IFRS9 macro scenario impairments was 12.7%.
Annex - divisional data
Main drivers
- NII-4.5% Q/Q at constant FX due to non- commercial items (including negative FX swap impact, previously reported in trading) and days effect
- Implementation of EUcross-border payment regulation main driver of lower fee income
- Covid-19:limited P&L impact, main effects being on lower new client acquisition and retail volumes
- Costs 5.1% higher Y/Y at constant FX due to competitive labour markets
- LLPs include 179m in 1Q20 related to update of the IFRS9 macro scenario. The underlying cost of risk was 70bps
CIB
Solid NII and fee performance offset by trading
Annex - divisional data
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |||
4Q19 | 1Q19 | |||||||
Total revenues(a) | 1,036 | 1,044 | 809 | -22.6% | -22.0% | |||
o/w Net interest | 556 | 587 | 588 | +0.1% | +5.8% | |||
o/w Fees (b) | 112 | 163 | 173 | +6.1% | +54.4% | |||
o/w Trading | 332 | 240 | 54 | -77.7% | -83.8% | |||
Operating costs | -394 | -405 | -398 | -1.8% | +0.9% | |||
Gross operating profit | 642 | 639 | 411 | -35.8% | -36.0% | |||
LLPs | -44 | 47 | -157 | n.m. | n.m. | |||
Net operating profit | 598 | 686 | 253 | -63.1% | -57.6% | |||
Stated net profit | 498 | 369 | -22 | n.m. | n.m. | |||
Underlying net profit1 | 498 | 464 | -2 | n.m. | n.m. | |||
Stated RoAC | 18.4% | 13.4% | -0.8% | -14.2p.p. | -19.2p.p. | |||
Underlying RoAC1 | 18.4% | 16.8% | -0.1%(a) | -16.9p.p. | -18.5p.p. | |||
C/I | 38.0% | 38.8% | 49.2% | +10.4p.p. | +11.2p.p. | |||
CoR (bps) | 14 | -13 | 42 | 55 | 28 | |||
- 1Q19 and 4Q19 other revenues include Ocean Breeze contribution.
- 1Q19 fees impacted by high certificate sales.
40(c) Underlying RoAC excluding IFRS9 macro scenario impairments was 5.2%.
Main drivers
- Resilient NII thanks to European loan market leadership
- Strong growth in fee income Y/Y thanks to the second best DCM quarter ever and lowerpay-out to the network following weaker certificate sales
- Lower trading income Q/Q with solid performance in equities, commodities and FX more than offset by credit spread widening in some portfolios, XVA(-90m Q/Q), and non-recurring valuation adjustments (-22m Q/Q)
- LLPs include 142m related to update of IFRS9 macro scenario. The underlying cost of risk was 4bps
- POI includes-70m due to an IFRS9 technical price adjustment on debt securities following the new IFRS9 macro scenario
Group Corporate Centre
Lower dividends drive increased net operating loss Y/Y
Annex - divisional data
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | |
4Q19 | 1Q19 | |||||
Total revenues1 | 11 | -10 | -34 | n.m. | n.m. | |
Operating costs | -83 | -57 | -71 | +24.9% | -14.2% | |
Gross operating profit | -72 | -67 | -105 | +57.7% | +47.1% | |
LLPs | -1 | -3 | 4 | n.m. | n.m. | |
Net operating profit | -72 | -69 | -101 | +45.9% | +40.6% | |
Other charges & provisions | -78 | -149 | -89 | -40.4% | +13.4% | |
o/w Systemic charges | -80 | -27 | -77 | n.m. | -3.5% | |
Integration costs | -1 | -105 | -264 | n.m. | n.m. | |
Profit from investments | 37 | -561 | -1,156 | n.m. | n.m. | |
Profit before taxes | -115 | -885 | -1,611 | +82.0% | n.m. | |
Income taxes | 52 | -230 | -365 | +58.7% | n.m. | |
Stated net profit | -41 | -1,118 | -2,024 | +81.0% | n.m. | |
Underlying net profit2 | -62 | -89 | -162 | +81.3% | n.m. | |
Main drivers
- Revenues-45m Y/Y mainly due to lower dividends from Yapi
- GCC's share of the Italian integration costs amounted to 264m
- POI includes +516m from real estate disposals and-1,669m from Yapi transactions
- Note: Yapi now included in Group Corporate Centre as a financial investment
41
Non Core
Rundown continues
Annex - divisional data
Data in m | 1Q19 | 4Q19 | 1Q20 | ∆ % vs | ∆ % vs | ||
4Q19 | 1Q19 | ||||||
Total revenues | -1 | -30 | -8 | -73.9% | n.m. | ||
Operating costs | -43 | -46 | -31 | -33.3% | -27.4% | ||
Gross operating profit | -44 | -76 | -39 | -49.1% | -11.3% | ||
LLPs | -103 | -1,188 | 77 | n.m. | n.m. | ||
Net operating profit | -147 | -1,264 | 38 | n.m. | n.m. | ||
Stated net profit | -188 | -1,104 | -2 | -99.8% | -98.8% | ||
Underlying net profit1 | -188 | -213 | 8 | n.m. | n.m. | ||
Gross customer loans | 17,750 | 8,592 | 8,099 | -5.7% | -54.4% | ||
o/w NPEs | 17,746 | 8,592 | 8,099 | -5.7% | -54.4% | ||
o/w Performing 2 | 4 | 0 | 0 | n.m. | -100.0% | ||
NPE coverage ratio | 65.8% | 78.1% | 78.4% | +0.4p.p. | +12.6p.p. | ||
Net NPEs | 6,065 | 1,886 | 1,746 | -7.4% | -71.2% | ||
RWA | 11,695 | 10,966 | 9,633 | -12.2% | -17.6% | ||
Main drivers
- Gross NPEs further reduced by 0.5bn with all actions contributing, including disposals
- Costs-27.4% Y/Y thanks to lower credit recovery costs connected to lower NPE stock
- Net LLPwrite-back of 77m thanks to client repayments, which trigger an automatic release of corresponding LLPs
42
Commercial loans and customer rates by division
Annex - divisional data | ||
Avg gross commercial performing loans11Q20, bn | Gross customer performing loan rates21Q20 |
CB Italy | 130.4 |
CB Germany | 86.2 |
CB Austria | 42.3 |
CEE | 68.0 |
CIB | 72.5 |
Q/Q Y/Y
-1.1%-2.3%
-0.7% 3.0%
-0.6% 3.2%
0.7% 4.2%
At constant FX
0.7% -2.1%
Q/Q | Y/Y | |||||
CB Italy | 2.44% | -0bps | -12bps | |||
-4bps excl. | ||||||
one-off4 | ||||||
CB Germany | 1.92% | -11bps | -14bps | |||
CB Austria | 1.40% | -1bps | -12bps | |||
CEE | 4.00% | |||||
-11bps | -27bps | |||||
At constant FX | ||||||
CIB | 1.89% | -0bps | -17bps |
Group3 | 399.8 | -0.5% | 0.4% | Group3 | 2.38% | -5bps | -15bps |
43
Commercial deposits and customer rates by division
Annex - divisional data | ||
Avg commercial deposits11Q20, bn | Customer deposits rates21Q20 |
CB Italy | 152.9 |
CB Germany | 87.9 |
CB Austria | 48.2 |
CEE | 71.5 |
CIB | 45.9 |
Q/Q Y/Y
-0.4% 4.9%
1.8% 3.5%
1.1% 2.2%
0.9% 6.1%
At constant FX
-1.6%-1.0%
Q/Q | Y/Y | |||||||||
CB Italy | 0.02% | --0bps | -0bps- | |||||||
CB Germany | -0.01% | -4bps | -6bps | |||||||
CB Austria | 0.08% | -1bps | -3bps | |||||||
CEE | 0.81% | |||||||||
-6bps | -20bps | |||||||||
At constant FX | ||||||||||
CIB | 0.04% | -3bps | -8bps |
Group3 | 0.5% | 4.1% | Group3 | -3bps | -6bps | ||
409.1 | 0.16% | ||||||
44
TFAs
Group TFAs1, bn
-1.7% | ||||
-5.9% | ||||
674 | 704 | |||
AuM | 188 | 202 | ||
AuC | 135 | 140 | ||
Deposits | 351 | 362 |
Annex - Group P&L
Q/Q | Y/Y | |
663 | ||
180 | -10.5% | -3.8% |
118 | -15.8% | -12.8% |
364 | ||
0.5% | 3.7% | |
1Q19 | 4Q19 | 1Q20 |
- 1Q20 net sales: AuM-0.6bn and AuC -1.1bn
- 1Q20 market performance: AuM-20.3bn and AuC -20.4bn
- Methodology changed: TFA definition now excludes all of CIB2
45
FTEs and branches
Annex - Group P&L
FTEs, eop | Branches |
-1,169 | |||
-303 | |||
85,111 | 84,245 | 83,942 | |
CEE | 24,110 | 24,142 | 24,111 |
W.E. | 61,001 | 60,103 | 59,831 |
1Q19 | 4Q19 | 1Q20 |
Q/Q | -133 | Q/Q | |||
-67 | |||||
3,783 | 3,717 | 3,650 | |||
-0.1% | CEE | 875 | 871 | 863 | -0.9% |
-0.5% | W.E. | 2,908 | 2,846 | 2,787 | -2.1% |
1Q19 | 4Q19 | 1Q20 |
- Number of branches in CEE now excludes Yapi
46
1Q20 LLPs and CoR breakdown by division
Annex - Group P&L
IFRS9 macro scenario breakdown by division, 1Q20
LLPs, m
Regulatory headwinds | Underlying |
IFRS9 macro | CEE |
1,261 | |
5 | |
902 | ITA |
354 |
CoR, bps
47
104 |
74 |
29 |
bps | 1Q20 | o/w | o/w |
Underlying | IFRS9 macro | ||
CB Italy | 193 | 65 | 129 |
CB Germany | 69 | 23 | 44 |
CB Austria | 75 | 33 | 42 |
CEE | 177 | 70 | 107 |
CIB | 42 | 4 | 38 |
Group excl. Non Core | 111 | 36 | 74 |
Non Core | n.m. | n.m. | n.m. |
Group | 104 | 29 | 74 |
FY20 expected CoR breakdown by division
Annex - Group P&L
FY20 Group cost of risk, bps
FY20 CoR1Breakdown by division
100-120
0-10
46 | bps | FY20 | o/w | o/w | ||||||||||
Underlying, | Regulatory | |||||||||||||
FCT | IFRS9, Sector | headwinds | ||||||||||||
12 | ||||||||||||||
CB Italy | 200 | - 240 | 190 | - 220 | 10 - 20 | |||||||||
100-1103 | CB Germany | 40 | - 60 | 35 | - 50 | 5 - 10 | ||||||||
CB Austria | 50 | - 60 | 45 | - 50 | 5 - 10 | |||||||||
CEE | 140 | - 160 | 140 | - 150 | 0 - 10 | |||||||||
34 | CIB | 30 | - 50 | 30 | - 50 | 0 | ||||||||
Group excl. Non Core | 100 | - 120 100 | - 110 | 0 - 10 | ||||||||||
Non Core | n.m. | n.m. | n.m. | |||||||||||
Group | 100 | - 120 | 100 | - 110 | 0 - 10 | |||||||||
FY20 | FY20 | |||||||||||||
TEAM23 | FCT | |||||||||||||
Regulatory headwinds2 | Underlying, IFRS9 macro | |||||||||||||
Underlying | §or specific |
- FY 2020 expected CoR is a combination of estimates for:
- specific provisions related to expected evolution of asset quality once moratoria expire
- IFRS9 macro scenarios and Sector specific provisioning
- At around the current forecast level, for every additional 1% drop in GDP, Group CoR increases by between 4bps and 6bps. This includes IFRS9 macro scenario and the positive mitigating impact of government guarantees and moratoria. Note that the sensitivity isnon-linear
48
Stated net profit by division
Annex - Group P&L
Stated net profit by division 1Q20, m
15 | 115 | |
-58 | -22 | -2 |
-730
-2,024 | ||||||||
-2,706 | ||||||||
1Q20 | CB Italy | CB Germany | CB Austria | CEE | CIB | Group CC | Non Core | Group |
stated | -25.1% | 1.1% | -8.6% | 4.9% | -0.8% | n.m. | n.m. | |
RoAC |
49
Adjustments for underlying net profit1as per CMD guidance
Annex - Group P&L
Group stated vs underlying net profit1, m
Underlying RoTE2 | -0.4% |
+1,347 | ||
+5 | +143 | |
-58 | ||
-516 | ||
+1,669 |
-2,706 | ||||||
1Q20 | Yapi transactions3 | Integration | Real estate | Regulatory | Tax effects | 1Q20 |
stated net profit | costs in Italy3 | disposals3 | headwinds | and other4 | underlying | |
impact on CoR3 | net profit1 |
- Yapi transactions include release of negative FX reserves(-1,557m), from the two transactions closed in 1Q20, reversed to P&L account. No impact on shareholders' funds. No tax effect
Integration costs in Italy follow agreement signed with trade unions for the implementation of Team 235
50
2019 Non operating items
Annex - Group P&L
1Q
2Q
Group recast effect from real estate revaluation / disposals
Group recast effect from real estate revaluation / disposals
Fineco disposal and other related effects
Ocean Breeze disposal
One-offs
2019
Net profit, m
+46
-1
+1,176
-178
Division
All divisions | 3Q |
All divisions
GCC
4Q
CIB
Group recast effect from real estate revaluation / disposals
Disposal of 9% of Yapi Kredi1
Integration costs in Germany & Austria
Revaluation of RE and effects of disposals
Non Core LLPs for updated rundown strategy
2019
Net profit, m
+80
-365
-319
-45
-1,0553
Division
All divisions
GCC
Germany,
Austria2
All divisions
Non Core
Others
-173
CB Italy, GCC, | Impairment of |
Non Core | intangibles and other |
-4684
All divisions
51
2020 Non operating items
Annex - Group P&L
2020
Amount | Net | ||
before | Division | ||
profit, m | |||
taxes, m | |||
Yapi deconsolidation | -1,669 | -1,669 | GCC |
Integration costs in Italy | -1,347 | -1,272 | All divisions1 |
1Q | |||
Additional real estate | +516 | +296 | GCC |
disposals | |||
Regulatory headwinds | -5 | -3 | CB Germany |
impact on CoR | |||
52
Covid-19 - loans under moratorium
Annex - Group BS | |||||||||||||||||||||||||
Gross loans under "moratorium", bn | |||||||||||||||||||||||||
Loans under "moratorium" ex lege | Loans under "moratorium" by the bank | Loans under "moratorium" by Associazione Bancaria Italiana | |||||||||||||||||||||||
Italy | Germany | Austria | CEE1 | ||||||||||||||||||||||
19.4 | |||||||||||||||||||||||||
0.2 | |||||||||||||||||||||||||
4.3 | o/w 5.0bn in opt-out2 | ||||||||||||||||||||||||
and 2.0bn in opt-in | |||||||||||||||||||||||||
14.9 | |||||||||||||||||||||||||
1.4 | 7.0 | ||||||||||||||||||||||||
0.0 | 0.0 | 0.2 | 0.0 | 0.0 | 7.0 | ||||||||||||||||||||
1.4 | |||||||||||||||||||||||||
0.2 | |||||||||||||||||||||||||
0.0 | |||||||||||||||||||||||||
0.0 | 0.0 | ||||||||||||||||||||||||
1Q20 | as of | ||||||||||||||||||||||||
1Q20 | as of | 1Q20 | as of | 1Q20 | as of | ||||||||||||||||||||
24/04/20 | |||||||||||||||||||||||||
24/04/20 | 24/04/20 | 24/04/20 | |||||||||||||||||||||||
Approved request | Approved request | Approved request | Approved request |
53
Covid-19 - loans covered by state guarantees
Annex - Group BS
Gross loans covered by state guarantees, bn
Net loans covered by state guarantee Risk for the bank
Italy | Germany | Austria | |||||||||||
0.861 | |||||||||||||
0.00 | |||||||||||||
0.86 | 0.08 | ||||||||||||
0.02 | |||||||||||||
0.00 | |||||||||||||
0.00 | 0.00 | 0.00 | 0.00 | 0.08 | |||||||||
0.02 | |||||||||||||
1Q20 | as of | 1Q20 | as of | 1Q20 | as of | ||||||||
24/04/20 | 24/04/20 | 24/04/20 | |||||||||||
Approved request | Approved request | Approved request | |||||||||||
(loans up to 25k) | (for KfW programme the | ||||||||||||
approval refers to KfW) |
CEE
0.03 | |
0.00 | |
1Q20 | as of |
24/04/20
Approved request
54
Asset quality by division
Annex - Group BS
Recoveries
Write-offs
Inflows to NPE
Outflow to performing
Gross NPE ratio
Default rate
Net flows to NPEs, recoveries and write-offs - 1Q20, m
133 | 114 | 82 | 96 | 73 | ||||||||||
110 | 21 | 56 | 27 | 65 | ||||||||||
426 | 393 | |||||||||||||
621 | 105 | 11 | 428 | 23 | ||||||||||
147 | 97 | |||||||||||||
41 | ||||||||||||||
-86 | -35 | -18 | ||||||||||||
-195 | -42 | |||||||||||||
CEE1 | ||||||||||||||
CB Italy | CB Germany | CB Austria | CIB | |||||||||||
5.3% | 1.7% | 3.7% | 4.9% | 1.8% | ||||||||||
1.9% | 0.7% | 0.9% | 2.5% | 0.1% |
494
280
969
1,344
-376
Group excl.
Non Core2
3.4%
1.1%
55
Impact of CRD5 Art. 104a on P2R and CET1 MDA buffer
Annex - Group BS
Impact of CRD5 Art. 104a on P2R and CET1 MDA buffer
CET1 ratio | |||||||||
13.44% | |||||||||
MDA buffer | |||||||||
+77bps | +77bps | 436bps | |||||||
Art. 104a buffer | Art. 104a buffer | ||||||||
benefits | benefits | ||||||||
0.44% | 0.44% | P2R o/w T2 | |||||||
CET1 MDA | 0.33% | CET1 MDA | 0.33% | P2R o/w AT1 | |||||
1.75% | 9.08% | 0.98% | 9.08% | 0.98% | P2R o/w CET1 | ||||
P2R | Maximum benefit | 1Q20 | |||||||
of Art. 104a | Art. 104a |
Comments
- CRD5 Art. 104a introduces the possibility for banks to cover Pillar 2 Requirement ('P2R') not only with CET1 instruments, but also with AT1 and T2 instruments
- In case of UniCredit ('UC') the 175bps can be covered at maximum for 77bps with AT1 and T2, with the latter capped at 44bps
- As a result, UC CET1 MDA buffer could benefit at maximum of +77bps (as a function of AT1 and T2 buffers over respective requirements)
- 1Q20 CET1 MDA buffer benefit of +77bps:
- AT1: +33bps maximum benefit
- T2: +44bps maximum benefit
56
TLAC/MREL funding plan
Annex - Group BS | ||
UniCredit SpA 2020 funding plan, bn | ||
Main drivers |
Still to be | UniCredit SpA has successfully executed 4.5bn of | |
issued in | TLAC eligible funding in 1Q20, in particular: | |
c.13 | 2020 | |
MREL | 4.7 | |||
eligible | 2 - 4.5 | |||
instruments | ||||
Senior preferred | 2.5 | 2 - 2.5 | ||
exemption | ||||
Senior | 2.0 | 0 | ||
non preferred | ||||
Tier 2 | 2.6 | 1 - 1.25 | ||
AT1 | 1.3 | 0 | ||
Funding plan | 5 - 8.25 | |||
2020 |
- €1.25bn 12NC7 Tier 2 transaction
- €2bn dual tranche SNP (6NC5/10Y)
- €1.25bn PerpNC June27 Additional Tier 1 Capital Notes
- Combined, this is equivalent to c. 77% of the subordinated component of the plan
57
RWA walk | |||||||||||
Annex - Group BS | |||||||||||
RWA1Q/Q, bn | |||||||||||
-17.7bn | Credit | ||||||||||
Market | |||||||||||
371.7 | 378.7 | ||||||||||
+0.9 | +1.2 | -0.1 | -2.0 | -20.4 | +3.1 | -0.4 | 361.0 | Operational | |||
Credit RWA: -20.5bn | |||||||||||
327.8 | 334.3 | 313.8 | |||||||||
32.5 | 11.5 | 33.0 | 11.5 | 32.6 | 14.6 | ||||||
1Q19 | 4Q19 | Business | Regulation | Business | FX effect | Other credit | Market | Operational | 1Q20 | ||
evolution | actions |
- Credit RWA down 20.5bn Q/Q mainly thanks to change in prudential consolidation of Yapi(-19.7bn)
- Market RWA up 3.1bn Q/Q due to market dislocation
Operational RWA down 0.4bn Q/Q
58
Leverage ratio and CET1 fully loaded
Annex - Group BS
Basel 3 leverage ratio transitional | CET1 fully loaded |
+1.2p.p.
+46bps | ||
-2bps | ||
5.04% | 5.51% | 5.49% |
1Q19 | 4Q19 | 1Q20 |
+0.2p.p. | |||
12.25% | 13.22% | 13.44% | |
MDA | 219bps | 312bps | 436bps |
buffer | |||
MDA | 10.07% | 10.09% | 9.08% |
requirement | |||
1Q191 | 4Q192 | 1Q203 | |
45.6bn | 50.1bn | 48.5bn |
Absolute amount
59
Tier 1 and total capital
Annex - Group BS
Tier 1 transitional | Total capital transitional |
+1.6p.p. | +1.6p.p. |
+0.6p.p. | +0.3p.p. |
14.90% | 15.48% | ||
13.93% | |||
Buffer | 236bps | 330bps | 457bps |
Minimum | |||
capital | 11.57% | 11.59% | 10.91% |
requirement | |||
1Q191 | 4Q192 | 1Q203 | |
51.8bn | 56.4bn | 55.9bn |
16.36% | 17.69% | 18.01% | |
Buffer | 279bps | 409bps | 466bps |
Minimum | |||
capital | 13.57% | 13.59% | 13.35% |
requirement | |||
1Q194 | 4Q195 | 1Q206 | |
60.8bn | 67.0bn | 65.0bn |
Absolute amount
60
Level 3 assets
Annex - Group BS
Level 3 assets
Figures in m | Assets | |||
FV hierarchy | 2Q191 | 4Q19 | 1Q20 | |
Level 1 | 97,509 | 95,351 | 96,295 | |
Level 2 | 70,399 | 65,914 | 74,573 | |
Level 3 | 6,914 | 12,234 | 10,611 | |
Financial Instruments | 5,120 | 6,251 | 4,718 | |
Tangible Assets | 1,794 | 5,983 | 5,893 | |
Overall | 174,822 | 173,499 | 181,479 | |
- Level 3 Tangible Assets comprise almost exclusively land and buildings
- The increase in L3 Tangible Assets of 4.2bn (from 2Q19 to 4Q19) is mainly due to the adoption of a fair value / revaluation model for land and buildings used in business (2Q figures recast to include land and buildings held for investments measured at Fair Value). For
further details, please see 4Q19 group results presentation
61
End notes (1/8)
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 3(Executive summary):
- Approved moratoria and loans backed by state guarantees, data as of 24 April 2020. CEE consolidated data.
- Managerial figures. Western Europe only, excluding Wealth management, from January till mid of March.
- Figures shown arepre-tax. Overall tax impact & other minor for non operating items is -143m. See page 50-51-52 in annex for details.
- Monthly 12M average, at the end of 1Q20.
These notes refer to the metric and/or defined term presented on page 4(Group key figures):
- Includes 902m additional impairments from IFRS9 macro scenario.
- Based on underlying net profit. See page50-51-52 in annex for details.
- Underlying net profit is the basis for capital distribution. See page50-51-52 in annex for details.
These notes refer to the metric and/or defined term presented on page 7(Moratoria):
- Approved moratoria, data as of 24 April 2020. CEE consolidated data.
- Figures based on legal entities. Includes also CIB clients.
- Opt-outmeans that the moratoria is automatically granted to all clients which can then decide not to have it. Opt-out countries are Hungary and Serbia.
These notes refer to the metric and/or defined term presented on page 8(Diversification):
- All bank data as of 1Q20, except for GDP; the flag of each Country represents the respective Commercial Banking divisions.
- End-of-periodaccounting volumes excluding repos and intercompany items.
These notes refer to the metric and/or defined term presented on page 9(Disciplined risk management):
- Excludes regulatory headwinds and Non Core LLPs for updated rundown strategy.
- Excludes regulatory headwinds and IFRS9 macro scenario.
62
End notes (2/8)
End notes
These notes refer to the metric and/or defined term presented on page 12(Group P&L):
- See press release of 02/04/20 for details "UniCredit and Italian trade unions sign agreement related to Team 23 strategic plan.
- Underlying net profit is the basis for capital distribution. See page50-51-52 in annex for details.
These notes refer to the metric and/or defined term presented on page 13(Underlying net profit by Division):
- Underlying net profit is the basis for capital distribution. See page50-51-52 in annex for details..
- Underlying RoAC based on underlying net profit. See page50-51-52 in annex for details.
- All divisions impacted by additional impairments following update to IFRS9 macro scenario. The amounts pre-tax are: CB Italy -434m (o/w -432m LLPs and -2m due to an IFRS9 technical price adjustment on debt securities), CB Germany -96m, CB Austria -48m, CEE -179m, CIB -212 (o/w -142m LLPs and -70m due to an IFRS9 technical price adjustment on debt securities), Group CC -4m and Non Core -0m.
These notes refer to the metric and/or defined term presented on page 14(Net interest walk):
- Net contribution from hedging strategy ofnon-maturity deposits in 1Q20 at 360.4m, -1.1m Q/Q and +1.4m Y/Y.
- Other include: margin from impaired loans, time value, days effect, FX effect,one-offs and other minor items.
- Successful tax litigation case in net interest line in CB Germany equal to 50m 1Q20.
These notes refer to the metric and/or defined term presented on page 16(Trading & Dividends):
- Include dividends and equity investments. Yapi is valued by the equity method (at 32% stake for January and at 20% thereafter) and contributes to the dividend line of the Group P&L based on managerial view.
- Valuation adjustments (XVA) include: Debt/Credit Value Adjustment (DVA/CVA), Funding Valuation Adjustments (FuVA) and Hedging desk. Client driven trading includes XVA equal to-67m in 1Q20 (+107m in 4Q19 and -86m in 1Q19).
This note refers to the metric and/or defined term presented on page 17(Costs):
1. Non HR costs include "other administrative expenses", "recovery of expenses" and "amortisation, depreciation and impairment losses on intangible and tangible assets".
This note refers to the metric and/or defined term presented on page 18(LLPs & CoR):
1. Always excludes regulatory headwinds (0bps in 1Q19; +2bps in 4Q19; 0bps in 1Q20). In addition for 4Q19 excludes Non Core LLPs for updated rundown strategy and for 1Q20 excludes IFRS9 macro scenario.
63
End notes (3/8)
End notes
These notes refer to the metric and/or defined term presented on page 19(Expected loss):
- Always excludes regulatory headwinds. For stock: 0bps in 1Q19; +2bps in 4Q19; 0bps in 1Q20. For the new business: 0bps in 1Q19; +1bps in 4Q19; 0bps in 1Q20.
- Expected losses on new business are based onyear-to-date values.
- Preliminary numbers, rounding might occur.
- Investment grade based on internal rating scale definition.
This note refers to the metric and/or defined term presented on page 21(UniCredit loans by sectors):
1. 1Q20 portfolio includes customer loans only.
These notes refer to the metric and/or defined term presented on page 23(FY20 CoR):
- Highly preliminary estimation for sector allocation considering moratoria and guarantee schemes effects.
- Regulatory headwinds includes impact from models and new Definition of Default.
- FY20 LLPs underlying considering IFRS9 macro scenario, sector specific and specific individual.
These notes refer to the metric and/or defined term presented on page 25(Group excl. Non Core asset quality):
- Gross NPEs including gross bad loans, gross unlikely to pay and gross past due. Gross past due at 844m in 1Q20(-1.2% Q/Q and -2.6% Y/Y).
- Source: EBA risk dashboard (data as at 4Q19).
This note refers to the metric and/or defined term presented on page 26(Non Core asset quality):
1. Outflow to performing.
These notes refer to the metric and/or defined term presented on page 27(Capital walk):
- 4Q19 pro forma CET1 ratio 13.09% / MDA buffer 300bps included deduction of 12bps for FY19 share buyback.
- Underlying net profit is the basis for capital distribution. See page50-51-52 in annex for details.
- Payment of coupon on AT1 instruments (34m pre tax in 1Q20) and CASHES (31m pre and post tax in 1Q20).
- In 1Q20 CET1 ratio impact from FVOCI-13bps, o/w -6bps due to BTP.
- BTP sensitivity: +10bps parallel shift of BTP asset swap spreads has a-2.2 pre and -1.6bps post tax impact on the fully loaded CET1 ratio as at 31 March 2020.
- TRY sensitivity: 10% depreciation of the TRY has around-1.2bps net impact (capital) on the fully loaded CET1 ratio. Managerial data as at 31 March 2020.
- DBO sensitivity: 10bps decrease in discount rate has a-3.5bps pre and -2.7bps post tax impact on the fully loaded CET1 ratio as at 31 March 2020.
648. Mainly includes partial disposal of 21% of Yapi (+58bps), integration costs in Italy (-34bps), additional real estate disposals (+9bps).
End notes (4/8)
End notes
These notes refer to the metric and/or defined term presented on page 28(TLAC):
- As of March 2020, P2R at 175bps and countercyclical buffer of 10bps.
- Non computable portion of subordinated instruments.
This note refers to the metric and/or defined term presented on page 29(Tangible equity & TBVPS):
1. End-of-period tangible book value per share equals end-of-period tangible equity divided by end-of period number of shares excluding treasury shares. Number of share 2,237m.
This note refers to the metric and/or defined term presented on page 31(Open branches):
1. Percentage of branches opened at least 1 day a per week.
This notes refers to the metric and/or defined term presented on page 34(ESG ratings):
1. Methodological notes:
I. ESG ratings agencies are not regulated entities;
- ESG ratings are based on publicly available information only, e.g. UniCredit's Integrated report, Compensation report, Code of Conduct, etc.;
- ESG ratings are disclosed discretionary, e.g. not all ESG ratings are publically available.
These notes refer to the metric and/or defined term presented on page 35(ESG 2023 Target):
- United Nations Environment Programme Finance Initiative.
- Paris Agreement Capital Transition Assessment.
- ESG-linkedinclude: green Loans, KPI-linked loans, ESG-score linked loans. Green Bonds: include Green, Social and Sustainability bonds. Positioning based on Loan Radar and Dealogic League Tables.
- External rating by the independent provider, Sustainalytics, UC ranks 5th among a peer group (15 banks)
- Including: biomass, hydro, photovoltaic , wind, CHP, battery storage, energy from waste and other renewables as well as corporates predominantly operating renewable energy assets.
- Including Individuals and SME.
- Vs. base year 2008. Long term target: 80% by 2030.
65
End notes (5/8)
End notes
This note refers to the metric and/or defined term presented on page 36(Division: CB Italy):
1. Normalised for integration costs (-1m) and impairment of intangible and other (-55m) in 4Q19 and integration costs in Italy (-742m) in 1Q20.
This note refers to the metric and/or defined term presented on page 37(Division: CB Germany):
1. Normalised for the impact of REV (+24m) in 1Q19, integration costs (-130m), revaluation of real estate (+117m) and impairment of intangible and other (-28m) in 4Q19 and regulatory headwinds impact on CoR (-3m) in 1Q20.
This note refers to the metric and/or defined term presented on page 38(Division: CB Austria):
1. Normalised for the impact of REV (+1m) in 1Q19, integration costs (-92m), revaluation of real estate (+3m) and impairment of intangible and other (-18m) in 4Q19.
These notes refer to the metric and/or defined term presented on page 39(Division: CEE):
- Excludes dividends from Yapi which are no longer reported in CEE and now reported in Group Corporate Centre
- Normalised for the impact of REV (+1m) in 1Q19, revaluation of real estate(-17m) and impairment of intangible and other (-16m) in 4Q19 and integration costs in Italy (- 11m) in 1Q20.
This note refers to the metric and/or defined term presented on page 40(Division: CIB):
1. Normalised for integration costs (-22m), revaluation of real estate (+2m) and impairment of intangible and other (-75m) in 4Q19 and integration costs in Italy (-19m) in 1Q20.
These notes refer to the metric and/or defined term presented on page 41(Division: Group Corporate Centre):
- Includes dividends from Yapi which are no longer reported in CEE and now reported in Group Corporate Centre
- Normalised for the impact of REV (+21m) in 1Q19, unwinding of Yapi joint venture(-365m), integration costs (-73m), revaluation of real estate (-153m), impairment of intangible and other (-90m) and tax effect on Non Core rundown (-348m) in 4Q19, Yapi deconsolidation (-1,669m), Integration costs in Italy (-489m) and additional real estate disposals (+296m) in 1Q20.
66
End notes (6/8)
End notes
These notes refer to the metric and/or defined term presented on page 42(Division: Non Core):
- Normalised for the revaluation of real estate (+2m), Non Core rundown(-707m o/w -1,055m of gross LLPs and +348m tax effect) and impairment of intangible and other (-186m) in 4Q19 and integration costs in Italy (-10m) in 1Q20.
- 1Q19 incorrectly flagged for technical reasons.
These notes refer to the metric and/or defined term presented on page 43(Commercial Loans & rates):
- Average gross commercial performing loans are managerial figures and are calculated as daily averages. Loans net of provisions.
- Gross customer performing loan rates calculated assuming 365 days convention, adjusted for 360 days convention where analytically available, and based on average gross balances.
- Includes Group Corporate Centre and Non Core.
- Single names.
These notes refer to the metric and/or defined term presented on page 44(Commercial Deposits & rates):
- Average commercial deposits are managerial figures and are calculated as daily averages. Deposits net of Group Bonds.
- Gross customer performing deposits rates calculated assuming 365 days convention, adjusted for 360 days convention where analytically available.
- Includes Group Corporate Centre and Non Core.
These notes refer to the metric and/or defined term presented on page 45(TFAs):
- Refers to Group commercial Total Financial Assets.Non-commercial elements, i.e. CIB, Group Corporate Centre, Non Core and Leasing/Factoring are excluded. Numbers are managerial figures.
- In the past, only Group Corporate Centre, Non Core, Leasing/Factoring and Market Counterparts were excluded.
These notes refer to the metric and/or defined term presented on page 48(FY20 CoR by divisions):
- Highly preliminary estimation for divisions allocation considering moratoria and guarantee schemes effects.
- Regulatory headwinds including new DoD.
- *Underlying component including also sector specific LLPs.
- FY 2020 LLPs Underlying considering IFRS9 macro scenario, sector specific and specific individual.
67
End notes (7/8)
End notes
These notes refer to the metric and/or defined term presented on page 50(Stated vs Underlying net profit):
- Underlying net profit is the basis for capital distribution. See page50-51-52 in annex for details.
- Underlying RoTE based on underlying net profit.
- Gross impact before taxes.
- Including PPA.
- See press release of 02/04/20 for details "UniCredit and Italian trade unions sign agreement related to Team 23 strategic plan.
These notes refer to the metric and/or defined term presented on page 51(Non operating items 2019):
- As per specific Press Release published on 30 November 2019.
- Severance charges for Germany and Austria booked in commercial banking, CIB and GCC divisions.
- Including-6m related to net interest.
- Impairment of intangible and other include-189m software write-off and -279m other (o/w -93m Group excluding Non Core and -186m Non Core).
This note refers to the metric and/or defined term presented on page 52(Non operating items 1Q20):
1. 1Q20 integration costs in: CB Italy equals to -742m, CB Germany equals to -0m, CB Austria equals to -0m, CEE equals to -11m, CIB equals to -19m, GCC equals to -489m and Non Core equals to -10m.
This note refers to the metric and/or defined term presented on page 53(GroupCovid-19loans under moratorium):
1. CEE consolidated data; Opt-out means that the moratoria is automatically granted to all clients who can then decide not to avail themselves of it. Opt-out countries are Hungary and Serbia.
This note refers to the metric and/or defined term presented on page 54(GroupCovid-19loans covered by state guarantees):
1. Overall financing requests with indication as corona-related including also non-KfW loans (according to process, in this phase it is partly not clear yet which solution will be chosen); Out of 5.4k requests, 2.6k are pending from client side, ~0.5k are not eligible. Out of ~1.8k, 1.0k are already approved while 0.8k in process; time to process under clarification.
68
End notes (8/8)
End notes
These notes refer to the metric and/or defined term presented on page 55(AQ by division):
- Including Profit Centre Milan.
- The sum of the divisions shown is not equal to the Group excluding Non Core.
This note refers to the metric and/or defined term presented on page 58(RWA):
1. Business evolution: changes related to customer driven activities (mainly loans). Regulation includes: regulatory changes (eg. CRR or CRD) determining variations of RWA;
Procyclicality: change in macroeconomy or client's credit worthiness; Models: methodological changes to existing or new models. Business actions: initiatives to decrease
RWA (e.g. securitisations, collateral related actions). FX effect: impact from exposures in foreign currencies. Other credit includes extraordinary/non-recurring disposals.
These notes refer to the metric and/or defined term presented on page 59(Leverage ratio & CET1 ratio):
- Capital requirement for March 2019: 10.07% CET1 ratio computed as 4.50% CET1 Pillar 1 minimum + 2.00% Pillar 2 requirements + 3.57% combined capital buffer.
- Capital requirement for December 2019: 10.09% CET1 ratio computed as 4.50% CET1 Pillar 1 minimum+ 2.00% Pillar 2 requirements + 3.59% combined capital buffer.
- Capital requirement for March 2020: 9.08% CET1 ratio computed as 4.50% CET1 Pillar 1 minimum + 0.98% Pillar 2 requirements (as 56.25% of P2R binding in 2020: 1.75%)+ 3.60% combined capital buffer, including CRD5 art. 104a.
These notes refer to the metric and/or defined term presented on page 60(Tier 1 & Total Capital):
- Minimum capital requirement for March 2019: 11.57% Tier1 (T1) ratio computed as 6.00% T1 Pillar 1 minimum + 2.00% Pillar 2 requirements + 3.57% combined capital buffer.
- Minimum capital requirement for December 2019: 11.59% Tier1 (T1) ratio computed as 6.00% T1 Pillar 1 minimum + 2.00% Pillar 2 requirements + 3.59% combined capital buffer.
- Minimum capital requirement for March 2020: 10.91% Tier1 (T1) ratio computed as 6.00% T1 Pillar 1 minimum + 1.31 % Pillar 2 requirements + 3.60% combined capital buffer, including CRD5 art. 104a.
- Minimum capital requirement for March 2019: 13.57% Total Capital (TC) ratio computed as 8.00% TC Pillar 1 minimum+ 2.00% Pillar 2 requirements + 3.57% combined capital buffer.
- Minimum capital requirement for December 2019: 13.59% Total Capital (TC) ratio computed as 8.00% TC Pillar 1 minimum+ 2.00% Pillar 2 requirements + 3.59% combined capital buffer.
- Minimum capital requirement for March 2020: 13.35% Total Capital (TC) ratio computed as 8.00% TC Pillar 1 minimum+ 1.75% Pillar 2 requirements + 3.60% combined capital buffer.
This note refers to the metric and/or defined term presented on page 61(Level 3 assets):
1. Amounts as of 2Q19 recast to consider the voluntary change in the measurement criteria for held for investments tangible assets. Data as of 1Q19 not available.
69
Glossary
70
Glossary (1/9)
Active digital
users
Active mobile banking users
Allocated capital
AT1
AuC
AuM
AVA
BS
bps
BTP
Capital
distribution
Glossary
At least one login in online/mobile applications/M-site in the last three months
At least one login in mobile application/M-site in the last three months (1 month for Germany)
Allocated Capital based on RWA equivalent figures calculated with a CET1 ratio target of 12.25%, including deductions for shortfall and securitizations
Additional Tier 1 Capital
Assets under Custody
Assets under Management
Additional Value Adjustments
Balance Sheet
Basis points
This refers to the whole Italian sovereign bond portfolio (BTPs, BOT, et al)
Cash dividend and / or share buyback. Share buyback subject to supervisory approval
71
Glossary (2/9)
Glossary
CASHES
CB
CEE
CET1 ratio
CHP
C/I
CMD
CMD 2019 perimeter
Commercial
revenues
Convertible and Subordinated Hybrid Equity-linked Securities
Commercial Banking
Central Eastern Europe includes: Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Russia, Romania and Bulgaria
Common Equity Tier 1 ratio fully loaded throughout the document unless otherwise stated
Combined Heat and Power
Cost/Income ratio
Capital Markets Day
Capital Markets Day - CMD perimeter as announced at CMD on 03 December 2019: variations related to the disposal of Yapi
Sum of net interest income and fees
72
Glossary (3/9)
Glossary
CoR
Coverage ratio
CRD5
Customer loan
rates
CVA/DVA
Days effect
DBO
DCM
Default rate
Digital sales
73
Cost of risk calculated as LLPs of the period annualised divided by average net customer loans
Stock of LLPs on NPEs divided by Gross NPEs
Capital Requirements Directive 5
Real interest on loans divided by the daily average volume of commercial gross loans (assuming 365 days convention, adjusted for 360 days convention where analytically available)
Credit/Debt Value Adjustment
Effect related to quarters having different number of days
Defined Benefit Obligation
Debt Capital Markets
Percentage of gross loans migrating from performing to gross NPEs over a given period (annualised) divided by the initial amount of gross performing loans
Number of sales resulting from an end-to-end application and completed either online or finalised in a branch, without any activities of the network
Glossary (4/9)
Glossary
EBA | European Banking Authority |
EL | Expected loss |
EMEA | Europe, Middle East and Africa |
EoP | End of period |
ESG | Environmental, Social and Corporate Governance |
Euribor 3M | 3-month Euribor; daily reference rate, published by the European Money Market Institute |
FIC | Fixed Income and Currencies |
FCT | Forecast |
FTE | Full Time Equivalent: an FTE of 1.0 is equivalent to a full-time worker |
FVOCI | Fair Value through Other Comprehensive Income |
74
Glossary (5/9)
Glossary
FX
FY
GDP
Gross NPEs
Gross NPE Ratio
Group excl. Non
Core
Group Corporate
Centre (GCC)
IFRS9
LLPs
MDA
Foreign exchange
Financial year
Gross Domestic Product
Non performing exposures (before deduction of provisions) comprising bad loans, unlikely to pay, and past due; including only loans to customers and excluding debt securities
Non performing exposures divided by gross loans (incl. repos)
Equivalent to Group excluding Non Core. It is not a separate division
Group Corporate Centre includes COO services, corporate centre global functions, inter-segment adjustments and consolidation adjustments not attributable to individual segments
International Financial Reporting Standard 9
Loan loss provisions
Maximum distributable amount
75
Glossary (6/9)
MREL
NC
Non Core
Non HR costs
NII
NPEs
NPE Ratio
NPL ratio
(EBA definition)
P&L
PCM
OCS
Glossary
Minimum Requirement for own funds and Eligible Liabilities
Non callable
In 2013, UniCredit ring-fenced the so-called"Non-Core" portfolio in Italy with a target to reduce clients' exposure considered as not strategic; selected assets in Italy to be managed with a risk mitigation approach
Other administrative expenses (incl. direct costs) net of expense recoveries, plus depreciation and amortisation
Net interest income
Non performing exposures comprising bad loans, unlikely to pay, and past due; including only loans to customers and excluding debt securities
(Gross or net) non performing exposures as a percentage of total loans, including only loans to customers and excluding debt securities
NPLs (bad loans, unlikely to pay, and past due from customer loans and loans to banks) divided by total customer loans and loans to banks
Profit and loss statement
Profit Centre Milan. Dedicated structure in Unicredit SpA supporting CEE countries, in which are carried out activities mainly related to transactions with CEE Large Corporate customers
Own credit spreads
76
Glossary (7/9)
Glossary
POI
P2R
Q/Q
RoAC
RoTE
RWA
Senior preferred
exemption
SREP
SMEs
Profit on investments
Pillar 2 requirement
Current quarter vs previous quarter
Return on allocated capital computed as 12.25% of RWA plus deductions for shortfall and securitizations (annualised net profit divided by the allocated capital)
Return on tangible equity (annualised net profit divided by average tangible equity)
Risk weighted asset
Part of TLAC/MREL requirement that can be filled with senior preferred (2.5% from 2019/3.5% from 2022)
Supervisory review and evaluation process
Small and medium sized enterprises:
- In Western Europe: companies below € 50m annual turnover and deserving a specific approach based on dedicated relationship manager (RM) and specialist support
- In CEE: thresholds range from c. €1-2m to c. € 50m annual turnover (varying country to country)
77
Glossary (8/9)
Glossary
SNP
Stated net profit
Tangible equity
TFAs
Time value
TLAC
TLTRO
T2
TRY
Senior non preferred
Refers to Group, Group excl. Non Core and divisions. Profit as shown in our financial statements
Shareholders' equity (including consolidated profit of the period) less intangible assets (goodwill and other intangibles), less AT1 component; dividend payout is accounted for on a cash basis
Total Financial Assets. Non-commercial elements, i.e. CIB, Group Corporate Centre, Non Core and Leasing/Factoring are excluded
Difference between the sum of expected recoverable cash flows of NPEs and the net present value
Total loss absorbing capacity
Targeted longer term refinancing operations
Tier 2 capital
New Turkish lira
78
Glossary (9/9)
Glossary
UC
Underlying net
profit
Underlying RoTE
VPN
WEU, W.E.
XVA
Y/Y
UniCredit S.p.A.
Stated net profit adjusted for non-operating items
Underlying return on tangible equity (underlying net profit divided by average tangible equity) Virtual private network
Western Europe includes Italy, Germany and Austria
Valuation adjustments include: Debt/Credit Value Adjustment (DVA/CVA), Funding Valuation Adjustments (FuVA) and Hedging desk
Current year vs prior year
79
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. (the "Company") and are therefore inherently uncertain. There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents or expectations of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance.
The information and opinions contained in this Presentation are provided as at the date hereof and the Company undertakes no obligation to provide further information, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except if required by applicable law. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.
The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. Any recipient is therefore responsible for his own independent investigations and assessments regarding the risks, benefits, adequacy and suitability of any operation carried out after the date of this Presentation. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the "Other Countries"), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries.
Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Stefano Porro, in his capacity as manager responsible for the preparation of the Company's financial reports declares that the accounting information contained in this Presentation reflects the UniCredit Group's documented results, financial accounts and accounting records.
This Presentation has been prepared on a voluntary basis since the financial disclosure additional to the half-year and annual ones is no longer compulsory pursuant to law 25/2016 in application of Directive 2013/50/EU, in order to grant continuity with the previous quarterly presentations. The UniCredit Group is therefore not bound to prepare similar presentations in the future, unless where provided by law. Neither the Company nor any member of the UniCredit Group nor any of its or their respective representatives, directors or employees shall be liable at any time in connection with this Presentation or any of its contents for any indirect or incidental damages including, but not limited to, loss of profits or loss of opportunity, or any other liability whatsoever which may arise in connection of any use and/or reliance placed on it.
80
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UniCredit S.p.A. published this content on 06 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2020 07:38:12 UTC
