Share this event on:

  • LinkedIn

Recomend this page

Thank you, we sent your recommendation to the desired recipient.

Sorry, this functionality is not available right now.
Please try with this link. Thank you.

UniCredit: a pan-European winner. 2Q18 and 1H18 Group Results

RESILIENT COMMERCIAL DYNAMICS AND SUCCESSFUL EXECUTION OF TRANSFORM 2019

DELIVER SUSTAINABLE RESULTS

 

2Q18 AND 1H18 GROUP RESULTS



GROUP CORE STRONG PERFORMANCE: 1H18 NET PROFIT AT €2.6 BN, UP 4.2 PER CENT VS. 1H17 ADJUSTED 1 , WITH ROTE AT 10.9 PER CENT, UP 0.2 P.P. VS. 1H17 ADJUSTED 1. 2Q18 GROUP CORE GROSS NPE RATIO IMPROVING, DOWN 85 BPS Y/Y TO 4.4 PER CENT


2Q18 GROUP NET PROFIT AT €1.0 BN, DOWN 13.3 PER CENT VS. 2Q17 ADJUSTED1, DUE TO HIGHER OTHER CHARGES AND PROVISIONS. SUSTAINED UNDERLYING FINANCIAL PERFORMANCE WITH 2Q18 GROUP NET OPERATING PROFIT AT €1.8 BN, UP 7.9 PER CENT Y/Y. 1H18 GROUP ROTE AT 8.7 PER CENT, UP 0.4 P.P. VS. 1H17 ADJUSTED1. FY19 GROUP ROTE TARGET >9 PER CENT CONFIRMED


2Q18 GROUP NET INTEREST AT €2.7 BN (+1.6 PER CENT Q/Q). POSITIVE COMMERCIAL DYNAMICS WITH HIGHER LENDING VOLUMES (+9.0 BN Q/Q GROUP CORE) AND POSITIVE NET AUM SALES (+3.2 BN IN 2Q18 GROUP) DESPITE CHALLENGING MARKETS. RESILIENT GROUP FEES (-0.3 PER CENT Y/Y) WITH TRANSACTIONAL FEES COMPENSATING LOWER INVESTMENT AND FINANCING FEES


2Q18 GROUP COSTS AT €2.7 BN, DOWN 7.0 PER CENT Y/Y AND 2.9 PER CENT Q/Q. BRANCH AND FTE REDUCTION AHEAD OF SCHEDULE, ACHIEVED 87 PER CENT OF FTE2 REDUCTION AND 84 PER CENT OF BRANCH CLOSURE TARGETS. 1H18 GROUP COST/INCOME RATIO AT 53.6 PER CENT


2Q18 GROUP COR AT LOW 45 BPS MAINLY DRIVEN BY NON-RECURRING WRITE-BACKS IN CIB. FY18 GROUP COR EXPECTED TO BE BELOW 68 BPS


2Q18 GROUP GROSS NPE RATIO IMPROVED TO 8.7 PER CENT (-243 BPS Y/Y) WITH GROSS NPES DOWN €10.2 BN Y/Y AND €2.0 BN Q/Q, OF WHICH €1.1 BN DISPOSALS IN 2Q18. NON CORE GROSS NPES AT €22.2 BN IN 2Q18 WITH FY18 NEW TARGET AT €19 BN


2Q18 GROUP FULLY LOADED CET1 RATIO AT 12.51 PER CENT, INCLUDING -35 BPS IMPACT OF FVOCI3 PORTFOLIO. FY18 FULLY LOADED CET1 RATIO CONFIRMED BETWEEN 12.3 PER CENT AND 12.6 PER CENT, AT CURRENT BTP SPREAD LEVELS4

 

UNICREDIT GROUP
2Q18 highlights Group
Total revenues at €4.9 bn (-4.3 per cent Y/Y, -3.3 per cent Q/Q), impacted by lower trading income and a €90 m positive one-off net interest item in 2Q17. Net interest up 1.6 per cent Q/Q to €2.7 bn, thanks to higher lending volumes and lower term funding costs. Resilient fees down only 0.3 per cent Y/Y, with transactional fee growth offsetting lower investment and financing fees
Lower operating costs (-7.0 per cent Y/Y, -2.9 per cent Q/Q) thanks to lower HR costs (-7.6 per cent Y/Y, -1.4 per cent Q/Q) and non HR costs (-6.0 per cent Y/Y, -5.1 per cent Q/Q), with FTEs down 1,725 Q/Q. C/I ratio at 53.7 per cent (-1.5 p.p. Y/Y, +0.2 p.p. Q/Q)
LLPs down 23.7 per cent Y/Y to €504 m, mainly driven by non-recurring write backs in CIB leading to a low CoR of 45 bps including 5 bps of models impact
Net operating profit at €1.8 bn, up 7.9 per cent Y/Y and Net profit at €1.0 bn, down 13.3 per cent vs. 2Q17 adjusted, mainly due to higher other charges and provisions
CEE and Commercial Banking Italy main contributors to net profit
Group Core
Net profit at €1.3 bn, down 6.4 per cent vs. 2Q17 adjusted 
1H18 highlights Group
Revenues at €10.1 bn (-2.5 per cent H/H) with NII down 1.7 per cent H/H due to pressure on customer loan rates and trading income down 23.2 per cent H/H due an unfavourable market environment in 2Q18. Fees increased 1.3 per cent H/H thanks to positive net AuM sales and transactional services 
Operating expenses down 6.1 per cent H/H to €5.4 bn in 1H18 with lower C/I ratio at 53.6 per cent (-2.0 p.p. H/H). FY18 C/I ratio target confirmed below 55 per cent  
 
Improved LLP at €1.0 bn (-29.9 per cent H/H) with low CoR at 45 bps, including 2 bps models change. FY18 CoR expected to be below 68 bps
Net profit of €2.1 bn, up 4.7 per cent vs. 1H17 adjusted with sound operating performance from all divisions 
1H18 RoTE at 8.7 per cent (+0.4 p.p. vs. 1H17 adjusted). Confirmed FY19 RoTE target above 9 per cent
Group Core
Group Core net profit at €2.6 bn (+4.2 per cent vs. 1H17 adjusted) with a RoTE of 10.9 per cent (+0.2 p.p. vs. 1H17 adjusted). FY19 RoTE target confirmed above 10 per cent
Capital Group fully loaded CET1 ratio at 12.51 per cent in 2Q18, including -35 bps impact of FVOCI portfolio
 
Group fully loaded leverage ratio at 5.20 per cent in 2Q18
Asset Quality
Group Core gross NPE ratio improved 85 bps Y/Y to 4.4 per cent in 2Q18, with a coverage ratio of 58.2 per cent
Total Group disposals of €1.1 bn in 2Q18 and €1.4 bn in 1H18
 
Group Core Gross NPE ratio improved 85 bps Y/Y to 4.4 per cent in 2Q18, with a coverage ratio of 58.3 per cent
Non Core NPEs down euro7.5 bn Y/Y to 22.2 bn in 2Q18 with a coverage ratio of 63.4 per cent
Transform 2019 Update Group fully loaded CET1 ratio confirmed between 12.3 per cent and 12.6 per cent at the end of 2018 and above 12.5 per cent at the end of 2019, at the current BTP spread levels4
Accelerated Non Core rundown progressing as planned. New gross NPE target at €19 bn at the end of 2018
 
Operating model transformation ahead of schedule, with 84 per cent of planned branch closures and 87 per cent of FTE reduction targets achieved
Strategic commercial initiatives ongoing and E2E process redesign in progress 

Milan, 7 August 2018: on 6 August 2018, the Board of Directors of UniCredit S.p.A. approved the Group's 2Q18 and 1H18 consolidated financial accounts as of 30 June 2018.

 

Jean Pierre Mustier, Chief Executive Officer of UniCredit S.p.A., commenting on the 2Q18 and 1H18 Group results:

 

"The UniCredit team has delivered another very solid set of results in the first half of 2018 despite a more challenging market and geopolitical context. We remain confident in the European and Italian economy and their strong underlying fundamentals. UniCredit continues to finance the real economy where it operates.

 

The ongoing successful execution of Transform 2019 underpins the resilient commercial dynamics we enjoyed across the Group in the second quarter: net interest is up by 1.6 per cent to 2.7 billion euro, lending volumes increased by 9 billion euro in Group Core and we saw AuM net sales of an additional 3.2 billion euro.

 

Thanks to the decisive actions we are continuously taking to de-risk the Group, our Group Core gross NPE ratio at the end of the second quarter dropped by 85 bps year on year to 4.4 per cent.

 

In terms of our accelerated Non Core rundown, our end 2018 objective is to reach 19 billion euro from 22.2 billion at the end of Q2.

By the end of this year, we expect to be close to finalising the announced Transform 2019 branch closures in Western Europe as well as the planned FTE reductions."

 

 

Notes:

 

[1] Group adjusted net profit and RoTE exclude the net impact of the Pekao disposal (-€310 m in 2Q17) and the net profit from Pekao and Pioneer (+€48 m in 1Q17, +€73 m in 2Q17). RoTE calculated at CMD perimeter, taking into account the capital increase and Pekao and Pioneer disposals as of 1 January 2017. RoTE defined as Return on Tangible Equity (annualised net profit divided by average tangible equity).

[2] Full Time Equivalent.

[3] FVOCI stands for fair value through other comprehensive income.

[4] As of 29 June 2018, BTP sensitivity: +10 bps parallel shift of BTP asset swap spread has a -3.8 bps (or -€137 m) pre and -2.6 bps (or-€95 m) post tax impact on the fully loaded CET1 ratio (capital).

[5] NPEs: Non Performing Exposures. The perimeter of Non Performing Loans is equivalent to the perimeter of EBA non performing exposures. NPEs are broken down in bad exposures, unlikely-to-pay and past due.