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UniCredit: a pan-European Winner. 1Q20 Group Results

1Q20 GROUP RESULTS SHOW

 

STRONG CAPITAL AND LIQUIDITY POSITION

 

DECISIVE COVID-19 RESPONSE TO PROTECT ALL STAKEHOLDERS

 

 

On 5 May 2020, the Board of Directors of UniCredit S.p.A. approved the 1Q20 Group's consolidated financial accounts as of 31 March 2020:

 

FAST AND DECISIVE ACTION IN RESPONSE TO COVID-19 ENSURING CONTINUED EFFICIENT CUSTOMER SERVICE WHILE PROTECTING THE WELL-BEING OF ALL STAKEHOLDERS

•       Employees: Group wide protective measures; effective business contingency plan activated

•       Clients: accelerated digital transformation; €28 bn loans under moratoria; €1 bn guarantees 1

•       Communities: local and regional donations; partnership with central banks and governments

 

EXCELLENT START TO THE YEAR WITH STRONG PERFORMANCE IN FIRST TWO MONTHS. COVID-19 IMPACT VISIBLE FROM MARCH ONWARDS

•       NII: €2.5 bn, down 0.5 per cent Q/Q; Fees: €1.6 bn, up 5.2 per cent Y/Y

•       Gross AuM sales: first two months 2 c.150 per cent 2019 run-rate; the last two weeks of March2 at c.50 per cent

 

1Q20 NET PROFIT IMPACTED BY NON-OPERATING ITEMS IN LINE WITH GUIDANCE

•       Mainly integration costs in Italy 3 (-€1.3 4 bn), Yapi transactions (-€1.7 bn)4,5 and real estate sales 6 (+€0.5 bn4)

•       Stated net profit: -€2,706 m; underlying net profit including IFRS9 macro scenario LLPs: -€58 m

 

STRONG CAPITAL AND LIQUIDITY POSITION TO SUPPORT CLIENTS AND COMMUNITIES

•       Strong capital: 1Q20 CET1 MDA buffer at 436bps, well above the 200-250bps target throughout FY20

•       Realistic IFRS9 macro scenario 7  update, additional €0.9 bn LLPs, FY20 cost of risk range 100-120bps, while FY21 cost of risk range 70-90bps

•       Strong liquidity: 1Q20 LCR ratio 143 per cent 8

 

DOING THE RIGHT THING FOR ALL STAKEHOLDERS IN ORDER TO BEST SERVE OUR STAKEHOLDERS

•       UniCredit's Core strengths and focussed business model to ease Covid-19 impact

•       Core pillars of Team23 remain strategic priorities

•       Updated Team 23 plan reflecting current conditions will be presented at a Capital Markets Day towards the end of the year or early next year

 

 

Jean Pierre Mustier, Chief Executive Officer of UniCredit S.p.A., commenting on the 1Q20 Group results, said :

 

"The first quarter of 2020 reconfirmed the positive impact of Transform 2019 across our business.

 

Our commercial performance for the first two months was very strong, NII held steady and fees were up 5.2 per cent year on year. We now draw on remarkable capital strength with a significant increase of our CET1 MDA buffer in the quarter to 436bps, well above our 200-250bps target, as well as a very strong liquidity position which at the end of the first quarter at 143 per cent8.

 

From the first days of the Covid-19 outbreak in Italy, UniCredit has taken decisive action to protect and support its employees and clients while remaining fully open for business across all geographies. Thanks to the unfailing commitment of all team members, we have continued to serve our clients and the economies where we are present. In addition, both the Group and its employees have made significant donations to the fight against Covid-19.

 

Following the widespread lockdown, we took the proactive decision to anticipate our regular Q2 IFRS9 macro scenario update, announcing an additional €902 m in LLPs. Based on realistic assumptions, we expect our FY20 cost of risk to be in the 100-120bps range.

 

I want to express my sincere gratitude to all my colleagues and to reassure them that, as the lockdown starts to ease across our markets, we will base our decisions as to how proceed on data, not dates. We will always do the right thing, placing the health and wellbeing of our colleagues and clients first. We are well positioned to meet the unprecedented challenges brought on by the Covid-19 pandemic, thanks to our fundamental strengths and focussed business model."

 

Notes:

 

 

1 As of 24 April 2020

2 Managerial figures. Western Europe only, excluding Wealth management, from January till mid of March.

3 See press release of 02/04/20 for details "UniCredit and Italian trade unions sign agreement related to Team 23 strategic plan.

4 Figures shown are pre-tax. Overall tax impact & other minor for non operating items is -€143 m.

5 Revaluation reserves, recycling from net equity through P&L -€1.6 bn, mainly FX reserve. Positive impact from regulatory deconsolidation of +58 bps on CET1 ratio.

6 excluding PPA

7 Annual GDP growth rates for FY20 are assumed to be -15.0 per cent for Italy, -10.0 per cent for Germany, -9.1 per cent for Austria and -6.3 per cent for CEE. The annual GDP recovery for FY21 is assumed to be +9.0 per cent for Italy, +10.0 per cent for Germany, +7.9 per cent for Austria and +6.0 per cent for CEE.

8 Regulatory figure as of 1Q20 (monthly 12M average).

 

 

Enquiries:

 

Investor Relations:

 

 e-mail: investorrelations@unicredit.eu

 

Media Relations:

 

e-mail: mediarelations@unicredit.eu