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)