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UniCredit: 2Q21 & 1H21 Group Results. Robust commercial performance and solid profitability


New organisational structure 1 including dedicated management team for Italy. Simplification, clients and digital as guiding principles to underpin strategy

 

2Q21 underlying net profit 2 of €1.1 billion, with 1H21 underlying RoTE 3 at 7.7 per cent. 2Q21 revenues at €4.4 billion, with strong fees and stable NII 4. 2Q21 costs at €2.5 billion

 

Strong liquidity and capital position, with fully loaded CET1 ratio at 15.50 per cent 5 and fully loaded CET1 MDA buffer 6 at 647 basis points 7

 

FY21 total revenues in line with previous guidance of circa €17.1 billion and costs confirmed at €9.9 billion

 

FY21 underlying Cost of Risk 8 guidance improved to below 40 basis points, equivalent to LLPs of less than €1.8 billion. FY21 underlying net profit now expected to be above €3 billion.

 

 

 

 

On 29 July 2021, the Board of Directors of UniCredit S.p.A. ("UniCredit" or "the Group") approved the Consolidated First Half Financial Report as at 30 June 2021.

 

Simplification, client centricity and digitalisation are the guiding principles underpinning the new strategic plan, to be communicated at the Investor Day intended in the fourth quarter 2021. The Bank's objective will be to deliver sustainable returns above the cost of equity over the cycle, by optimising a combination of three levers: risk-adjusted revenue growth, operational efficiency and capital efficiency.

 

In 2Q21 underlying net profit2 reached €1.1 billion, up 24.7 per cent quarter on quarter, and €2.0 billion in the first half, equivalent to an underlying 1H21 RoTE3 of 7.7 per cent. The robust commercial performance, reflecting the strengths of UniCredit's franchise, led to €4.4 billion of revenues, with fees delivering another very strong result, as economies began to slowly open up through the quarter, and NII starting to stabilise at €2.2 billion.

 

Year on year costs were almost flat at €2.5 billion in 2Q21 due to continued focus on cost efficiency and strong cost discipline with cost/income ratio at 56.0 per cent.

The strength of the balance sheet can be seen in UniCredit's extremely healthy capital position. Group gross NPE ratio improved to 4.7 per cent. The fully loaded CET1 ratio stands at 15.50 per cent5, with fully loaded CET1 MDA buffer6 at 647 basis points7. Tangible equity at €52.3 billion increasing 1.3 per cent quarter on quarter mainly thanks to net profit.

Stated cost of risk at 33 basis points in 2Q21, benefitting from better than expected asset quality, partially offset by regulatory headwinds.

 

FY21 total revenues in line with previous guidance of circa €17.1 billion and costs confirmed at €9.9 billion. The FY21 underlying cost of risk8 guidance is now expected to be below 40 basis points, equivalent to underlying Loan Loss Provisions (LLPs) of less than €1.8 billion. FY21 underlying net profit is now expected at above €3 billion.

 

The key financial events of 2Q21 include the following:

 

  • First Buy-Back Programme 2021 completed; purchasing in aggregate around 17 million shares for a total amount of €179 million, equivalent to 0.8 per cent of the share capital. These will be cancelled within the terms and according to the procedures established by the resolution passed at 15 April 2021 shareholders' meeting
  • Combined ordinary distribution of capital of €447 million for FY20 that represented a total yield of around 2 per cent
  • Issuance of Group's inaugural €1 billion Senior Preferred Green Bond for with very attractive book
  • Standard & Poor's upgrade changing UniCredit SpA's outlook to 'stable' from 'negative'
  • Issuance of €750 million of Additional Tier 1 9 and of $2 billion dual-tranche Senior Preferred, (with $8 billion of strong, international demand)

 

 

 

Andrea Orcel, Chief Executive Officer of UniCredit S.p.A. :

 

"UniCredit has strong fundamentals based on its unique geographic footprint, the distribution power of its network and the strength of its balance sheet. These provide an excellent foundation for improving returns and creating long-term value for all our stakeholders. We have made significant early progress in simplifying the business so that it can operate faster and with greater clarity. We have more to do, and our focus will be on continuing to reduce complexity, increasing the pace of digitalisation and ensuring that client outcomes are at the heart of every decision we make. There is huge value to be unlocked in UniCredit, and I am excited by the opportunities ahead."

 

 

 

 

Notes:

1 The new organisation will become fully operational during the second half of the year.

2 Underlying net profit is the basis for the ordinary distribution policy. Underlying net profit normalised for 2Q21 one-offs (-€68 m).

3 Based on underlying net profit.

4 Net contribution from hedging strategy of non-maturity deposits in 2Q21 at €368.2 m, +€4.8 m Q/Q and +€39.2 m Y/Y.

5 Including pro-rata deduction for 1H21 accrued dividends. Not yet including extraordinary share buyback of 652m already approved by AGM and subject to ECB approval.

6 2Q21 CET1 MDA transitional buffer at 708 bps.

7 MDA buffer is relevant for regulatory purposes only versus the CET1 ratio transitional, at 708 bps; CET1 MDA requirements at 9.03 per cent in 2Q21.

8 Underlying CoR: defined as stated CoR excluding regulatory headwinds.

9 Settlement date as of 7 Jul 21.

 

 

 

 

 

 

Enquiries:

 

Investor Relations:

e-mail: investorrelations@unicredit.eu

 

Media Relations:

e-mail: mediarelations@unicredit.eu