UniCredit’s 1Q20 results show a strong capital and liquidity position and highlight the bank’s decisive response to Covid-19 to protect all stakeholders. CEO Jean Pierre Mustier shares the highlights
How would you summarise this quarter?
The first quarter of 2020 reconfirmed the positive impact of Transform 2019 across our Group.
We had an excellent start to the year, with a strong commercial performance in January and February. In March, we started to see a slowdown from Covid-19. Our underlying net profit, which shows how we are doing operationally, was close to breakeven. A great result, given the circumstances!
My deep and heartfelt thanks go to all of our team members for their hard work.
What about the impact of Covid-19?
When Covid-19 outbreak started, we took fast and decisive actions to protect the health and safety of our employees and customers, while remaining open for business across all geographies. Thanks to the unfailing commitment of all of our teams, we have continued to serve our customers and the economies where we are present.
Two weeks ago, we announced the anticipation of €0.9 billion additional loan loss provisions following our updated IFRS9 macro scenario.
There are also positives. The digital transformation of the bank accelerated. Thanks to our digital infrastructure and the significant ramp-up of our remote working capacity, we have been able to quickly adopt new ways of working and continue to deliver efficient customer service. Our clients have also embraced new ways of connecting with us. Active mobile users are up 27 per cent compared with a year ago, and digital sales as a percentage of total sales increase by 47 per cent. We will continue to support this evolution through investment in IT and staff training.
How has our capital position changed?
Our capital and liquidity ratios are very strong. At the end of 1Q20, our CET1 MDA buffer was 436 basis points, well above the 200-250 basis points target range. We also have ample liquidity reserves with a liquidity coverage ratio at 143 per cent.
What will become of our Team 23 plan?
The core pillars of our Team 23 plan remain our strategic priorities.
We will be updating our strategic plan and present our new assumptions at a Capital Markets Day towards the end of the year or early next year.
What should we expect for the next few months?
Thanks to the hard work and commitment of our teams – whether working from a branch, from an office or from home – we will continue to serve our customers, support our communities and each other.
As restrictions are starting to ease across our markets, we will continue to base our decisions on data, not dates.
We will continue to always Do the right thing! to protect our people’s health and wellbeing. This is and remains our top priority. Together, we ensure UniCredit is and remains a pan-European winner.