Ad-hoc-Meldung / Ad hoc Release
nach § 15 WpHG / pursuant to § 15 of the German Securities Trading Act
RESULTS APPROVED FOR FIRST HALF 2006
NET PROFIT AT €3,043 MILLION, AN INCREASE OF 48.3% YOY
OPERATING PROFIT AT €5,410 MILLON, AN INCREASE OF 32.9% YOY
Today UniCredito Italiano's Board of Directors approved the consolidated results for first half 2006 (1).
The Group closed the first half of the year with a net profit of €3,043 million (mn), an increase of 48.3% compared to the same period in the previous year. Operating profit (€5,410 mn) rose 32.9% over first half 2005 (+28.2% YoY on a like for like foreign exchange and perimeter basis).
The HVB Group's net profit, equal to €1,706 mn (before adjustments for consolidation), tripled when compared to the previous year (€566 mn), and the operating profit of €2,523 mn (+55.5% on a like for like foreign exchange and perimeter basis) made a positive contribution to the Group's results. This performance is primarily attributable to strong growth in revenues (+15.9% YoY on a like for like foreign exchange and perimeter basis) and a substantial reduction in operating costs (-2.6% on a like for like foreign exchange and perimeter basis).
The Group's total revenues reached €11,939 mn, with an increase of 15.7% YoY (+11.8% on a like for like foreign exchange and perimeter basis), due to a rise in both net interest income (€6,247 mn, +5.9% YoY and +3.2% on a like for like foreign exchange and perimeter basis) and in net non-interest income (€5,692 mn, +28.7% YoY and +23.3% on a like for like foreign exchange and perimeter basis).
The trend in net interest income shows growth for both UniCredit excluding HVB (€3,089 mn, +8.7% YoY) and the HVB Group (€3,123 mn, +3.4% YoY).
The increase in net interest for UniCredit excluding HVB (€2,957 mn, +9.5% YoY) was sustained by an increase in volumes and improvement in deposit spreads. On an annualised basis, the largest contribution came from the Retail Division (+11.7% YoY) that generated more than half of the increase, with positive performances reported by all of the Divisions. The growth reported by the HVB Group (€2,880 mn, +3.2% YoY) is substantially attributable to the expanded area of consolidation.
Customer loans, equal to €430.1 billion (bn), show an increase of 1.5% versus June 2005 (+0.8% versus December 2005). UniCredit excluding HVB shows significant growth YoY (+11.0% YoY) with positive trends in the three most important divisions (Retail: +14.1% YoY, Corporate: +7.4% YoY, New Europe: +25.1% YoY at constant exchange rates). The HVB Group loans (€258.3 bn) show a decrease (-3.6% YoY, -1.5% versus December 2005). This result reflects a drop in real estate loans and the introduction of a more risk correlated pricing policy in Germany.
Net deteriorated loans for the Group (that include non-performing loans, watchlist, restructured and past due loans) amounted to €16.7 bn, a decrease of 7.9% versus December 2005. Non-performing and watchlisted loans totalled €14.2 bn (-10.1% versus December 2005).
The total deteriorated loans/customer loans ratio fell from 4.26% at the end of 2005 to 3.87% at June 2006, with a coverage ratio at June 2006 of 48.6% (49.4% at December 2005). The incidence of non-performing and watchlisted loans on total loans at June 2006 is down from the 3.70% at December 2005 to 3.29%, with a coverage ratio that improved from 51.8% at December to 52.4% at June 2006.
Direct deposits equalled €474.6 bn, an increase of 2.7% versus December and of 3.9% versus June 2005. UniCredit excluding HVB came in at €187.0 bn (+5.0% versus December 2005, +9.5% YoY) and the HVB Group reached €284.9 bn (+1.4% versus the end of 2005, +1.0% YoY).
Net non-interest income (€5,692 mn) grew significantly (+28.7% YoY, +23.3% on a like for like foreign exchange and perimeter basis) thanks to a strong performance in all segments.
Net commissions (€4,242 mn) rose by 18.9% YoY. UniCredit excluding HVB came in at €2,363 mn (+14.4% YoY), with a particularly strong contribution from the Private Banking & Asset Management Division (+27.4% YoY) and the New Europe Division (+29.3% YoY). The HVB Group also reported significant improvement in commissions over first half 2005 (€1,880 mn, +25.2% YoY).
The Group's net commissions include a significant increase in wealth management and securities in custody fees that came in at €2,184 mn (+27.9 % YoY).
Assets under management by the Group's Asset Management companies amounted to €236 bn, an increase of 5.6% versus the end of 2005, thanks also to the acquisition of the US asset management company Vanderbilt (more than €10 bn). More in detail, Pioneer reported growth of 7.4% in the first half, with a more marked increase in the International Divisions (+34%) and in the US Division (+29.6%).
Net trading, hedging and fair value, equal to €1,257 mn at the end of June, showed growth of 50.7% compared to first half 2005 (+43.2% on a like for like foreign exchange and perimeter basis), thanks to the HVB Group's exceptional performance that more than compensates for the slow-down reported by UniCredit excluding HVB. The drop in the second quarter over the first quarter (equal to 129 mn) is primarily due to a less favourable trend in the financial markets that during the first quarter helped the HVB Group achieve an exceptional result, in addition to seasonal factors, namely the higher client demand in the first quarter of every year.
Other income totalled €193 mn, an increase of €173 mn YoY, of which €122 mn is attributable to the HVB Group.
Operating costs (€6,529 mn) showed a slight increase of 1% YoY (on a like for like foreign exchange and perimeter basis). This item includes €3,150 mn (+5.1% YoY (2)) attributable to UniCredit excluding HVB while the HVB Group (€3,343 mn) shows a substantial decrease (-2.6% YoY (2)).
Cost/income ratio fell to 54.7% in first half 2006 from 60.5% in the same period of the previous year.
The Group's operating profit reached €5,410 mn, an increase of 32.9% YoY (+28.2% on a like for like foreign exchange and perimeter basis). This positive evolution reflects the HVB Group's excellent operating performance (€2,523 mn, +66.6% YoY, +55.5% on a like for like foreign exchange and perimeter basis) and the growth of UniCredit excluding HVB (€2,889 mn, +12.9%), to which the Divisions Private Banking & Asset Management (+42.8% YoY), Retail (+21.4% YoY) and New Europe (+12.1% YoY) contributed significantly.
Total provisions and write-downs in the first half amounted to €1,255 mn compared to €1,164 mn in first half 2005. More in detail:
- Provisions for risks and charges equal to €143 mn, versus €75 mn in first half 2005;
- Net write-downs of loans and provisions for guarantees and commitments amounted to €1,112 mn versus 1,089 mn in first half 2005.
The increase in operating profit YoY was amplified by a rise in net income from investments, that was only partially offset by increases in provisions and net write-downs on loans, along with integration charges of €52 mn.
Net income from investments in the first half amounted to €626 mn (€349 mn in first half 2005), of which €449 mn attributable to the second quarter. This result was positively impacted by the sale of Splitska Banka to Société Générale (finalised by BA-CA on 30 June).
Income tax for the period, equal to €1,310 mn, shows an increase of 34.4% versus first half 2005, with an incidence on profit before tax of 27.7%, down from the 30.6% for FY 2005, thanks to increased capital gains on equity investments (not taxed) and an increase in the impact of HVB AG's profit, the taxation of which benefits from losses recorded in previous years.
Net Profit, therefore, amounted to €3,419 mn (+49.8% YoY).
Assets in the process of being sold contributed €39 mn to net profit. Net profit for the period, therefore, amounted to €3,458 mn (+51.1% YoY, +44.6% YoY on a like for like foreign exchange and perimeter basis).
Minority interests' profit in the first half totalled €415 mn, compared to €236 mn in first half 2005. The increase is primarily due to the minority interests of the HVB Group (207 mn), net of the directly held interest in BA-CA.
The net profit attributable to the Group equalled, therefore, €3,043 mn, with an increase of 991 mn (+48.3%) versus first half 2005.
The Group's portion of net equity amounted to €34,771 mn at 30 June 2006 (versus €35,203 mn at the end of 2005).
Core Tier 1 came in at 5.91% at the end of June 2006, an improvement over December 2005 (5.53%). Total Capital Ratio reached 10.16% (3).
As from the end of June the Group's organisation consisted of a staff (4) of 134,870 employees (+71 versus December 2005). The increase versus December is explained by the presence of temporary employees working in the tourism industry for the Zagrebacka Group companies (approximately 800 individuals). The Group's network is composed of 7,336 branches (5) (+152 versus the end of 2005).
UniCredito Italiano's Board of Directors also approved the Parent Company's first half 2006 results, which recorded a Net Profit of 2,034 mn compared to 1,877 mn recorded in the first half 2005.
1) The changes made in the perimeter of consolidation as from the close of the FY are primarily attributable to the expansion of the HVB Group's perimeter, with the entry of 68 companies, in large part already included as from March 2006. Please note that as from first quarter 2006 38 companies of the Immobilien Group, HVB Bank Latvia, Joint Stock Commercial Bank HVB Ukraine, a few companies of BA-CA's "Central Eastern Europe" Division (including Nova Banjalucka Banka, CAIB International Markets, and BPH Investment Fund Company), in addition to other minor companies, for a total of 48 companies, were consolidated on a line-by-line basis. The 20 companies that entered the HVB Group's perimeter of consolidation in the second quarter include HVB Capital Partners AG and 19 subsidiaries of BA-CA, of which 17 are part of the sub-group real estate company "Universale International Realitaten GmbH". Additionally in the period between March and June 2006, Koçbank increased its interest in Yapi ve Kredi Bankasi, the control of which was obtained in third quarter 2005, from 57.4% to 67.31%. In the balance sheet at 30 June 2006, Banque Monegasque de Gestion was classified among "Non current assets and disposal groups for sale", along with Uniriscossioni and 2S Banca, already so classified as from March 2006. The equity investments classified among the "Non current assets and disposal groups for sale" at 31 December 2005 were all sold during the first half (the Cunnee Savings Banks in the first quarter and sale of Splitska Banka was finalised on 30 June 2006).
2) On a like for like foreign exchange and perimeter basis
3) Calculation made based on the new Bank of Italy instructions.
4) "Full time equivalent ". The Koc Group is proportionately consolidated. The HVB Group figure at 31 December has been restated to reflect changes in the perimeter of consolidation that took place during the first half.
5) In the figures indicated the Koc Group is proportionately consolidated at 100%.
Attached are the Group's key figures for the first half, the Group's reclassified balance sheet and income statement, the income statements for the Unicredit Group excluding HVB, the HVB Group and the BACA Group. It is pointed out that this documentation has not yet been certified by the independent auditor.
+39 02 88628236; e-mail: email@example.com
+39 02 88628715; e-mail: InvestorRelations@unicreditgroup.eu
These assessments are subject to the following disclaimer:
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. UniCredito Italiano S.p.A. assumes no obligation to update any information contained herein.
Milan, 10 October 2006
UniCredito Italiano S.p.A.
Via San Protaso 1/3
Securities listed on German regulated markets:
Listed:Official Market (Amtlicher Markt), Frankfurt Stock Exchange (General Standard)