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UniCredit: 2Q23 and 1H23 Group Results. Record-Breaking set of Results, delivering sustainable excellence

Best first half and 10th consecutive quarter of profitable quality growth, with €4.4 billion stated net profit and RoTEof 20.8% in 1H23; stated net profit in 2Q23 at €2.3 billion


Excellent net revenue growth of 24.4% year on year in 2Q23 driven by commercial momentum in all key lines with 2Q23 NII of €3.5 billion, fees of €1.9 billion and minimal loan loss provisions


Costs reduced year on year with low cost-income ratio of 39%, despite inflationary pressures and without constraining revenue growth or investments


Well positioned for any future macro deterioration with structurally low cost of risk of 2 basis points in 2Q23 and robust asset quality, while maintaining c. €1.8 billion overlays


Best-in-class CET1 ratio at 16.64% net of the €1.5 billion 1H23 accrued dividend, underpinned by €6.5 billion organic capital generation in 1H23


Outstanding shareholder value creation with 2Q23 EPS2 at €1.12 and Tangible Book Value per share at €30.2, generating strong returns through the cycle


Well progressed on 2022 €3.34 billion share buyback3, equal to 6.5% share capital and bringing total distribution to €5.25 billion


FY23 guidance upgrade with net profitof at least €7.25 billion and shareholder distribution5 equal to or higher than €6.5 billion


Launch of second UniCredit per l'Italia tranche of €10 billion and Foundation programs "Re-power your Future" and "Call for Education", with combined value of almost €10 million


On 25 July 2023, the Board of Directors of UniCredit S.p.A. ("UniCredit" or "the Group") approved the Consolidated First Half Financial Report as of 30 June 2023.


The record set of financial results affirms UniCredit's excellence. It is continued proof of UniCredit Unlocked success in creating a transformed bank with increased, resilient and sustainable profitability stemming from high quality risk-adjusted results.

The combination of the three levers of net revenues, costs and capital efficiency continues to yield exceptional financial results, unlocking internal value and paving the way for sustainable growth, further evidenced by the 2Q23 RoTE1 of 21.3% and 2Q23 €2.3 billion stated net profit. In 1H23 net profit reached a record high €4.4 billion, a 91.5% increase half-year on half-year. Net of the integration costs booked in 2Q23 net profit stood at €4.5 billion.


The 2Q23 excellent financial outcome reflects consistent quality growth, delivering on all key levers across all businesses and driven by €5.9 billion of net revenues in 2Q23, an increase of 24.4% year on year. Revenues were underpinned by net interest income ("NII") of €3.5 billion, up 41.3% year on year due to higher rates and well managed deposit pass-through and resilient fees of €1.9 billion, up 2.4% year on year excluding the impact of the current account fees reduction in Italy.


Loan loss provisions ("LLPs") decreased 77.5% quarter on quarter resulting in a negligible and structurally low cost of risk ("CoR") of 2 basis points in 2Q23 reflecting the Group's healthy asset quality that is further strengthened by its lines of defence and resilient credit portfolio quality as well as the existing c. €1.8 billion overlays. The sound asset quality and the credit performance of 1H23 lead to the improvement of the FY23 CoR guidance from the target range of 30-35 basis points to below 25 basis points, with potential upside.


In 2Q23 operational costs were €2.3 billion, flat quarter on quarter and reduced by 1.2% year on year, confirming the Group's ability to structurally decrease its costs despite extraordinarily high inflation and without impacting growth or ongoing investments. As part of these since 2022 UniCredit has hired around 2,000 employees mainly in the front-line, in Italy and Germany and has refurbished circa 550 branches in Italy. The cost-income-ratio ("C/I") stood at 39.0% in 2Q23 and the integration costs of €0.2 billion booked in the same period will further enable future operational efficiencies.


The Group continues to improve its already best-in-class capital position, with 210 basis points of organically generated capital in 1H23, or €6.5 billion, leading to a CET1 ratio of 16.64% including the €1.5 billion dividend accrued in 1H23. Risk weighted assets ("RWA") decreased to €294.8 billion.


Following the completion of the first tranche of €2.34 billion, out of the total 2022 €3.34 billion share buyback, the second tranche of €1.0 billion is currently being executed. UniCredit is delivering on its unwavering commitment to shareholder value creation.


The Group's rock-solid balance sheet and sound liquidity profile are derived from its granular and diversified deposit base and effective management of the pass-through, with a stable loan to deposit ratio of circa 90%. The Liquidity Coverage Ratio stood above 140%, within the managerial target range of 125% - 150% post TLTRO repayment6.


On the back of an improved interest rate environment, and the respective deposit pass-through assumptions, low cost of risk, structural cost control, and progress on capital efficiency ambitions, UniCredit has improved its financial guidance7 for 2023 to NII of at least €13.2 billion, net revenues above €21.5 billion and net profit4 at or above €7.25 billion. We have increased our shareholder distribution intention for 2023 to at least €6.5 billion5 on the back of extremely strong capital generation of 210 bps in 1H23. Net profit and shareholder distribution for 2024 is expected to be broadly in line with 2023.


UniCredit announced the next tranche of the "UniCredit per l'Italia" program, with a total potential value of €10 billion, aimed at supporting the disposable income of individuals and households and the liquidity of Italian businesses. This second tranche reiterates UniCredit's purpose to support customers and communities during challenging times. UniCredit also announced the partnership with the European Investment Fund channelling €1 billion to small businesses across Central and Eastern European countries where the Group is present. The Group will continue to offer concrete help to families, communities, and businesses so that they can accelerate their individual paths to growth and our collective path to success. An example of our social commitment is the partnership between the UniCredit Foundation and Junior Achievement Europe that launched a €6.5 million educational program "Re-power your future" to re-engage students in school, improving outcomes and preventing dropouts. The UniCredit Foundation also allocated €3 million to its "Call for Education" initiative that supports programs combating educational poverty.


The momentum of the Group's financial success is further evidenced by the nine awards won at this year's Euromoney Awards. UniCredit was named "best bank" in Central and Eastern Europe with further individual tributes to Austria, Bosnia and Herzegovina, Bulgaria, Croatia and Italy. Italy has further garnered additional praise for its investment banking activity, while Central and Eastern Europe were recognized for their transaction services and wealth management activity. These awards are a testament of the successful ongoing execution of the industrial transformation and the commitment and dedication of the Group's employees driving business and proximity to clients.


The key recent events in 2Q23 include:


  • 2022 first share buyback tranche of €2.34 billion completed on 29 June 2023;
  • 2022 second share buyback tranche of €1 billion commenced on 30 June 2023, after the completion of the first one. As of 21 July 2023, and considering also the purchases made under the aforementioned first tranche, UniCredit purchased a total of 125.8 million shares equal to 6.5% of share capital;
  • Announcement of the global expansion of UniCredit and Mastercard payment partnership on 26 May 2023;
  • Issuance of a dual tranche Obbligazioni Bancarie Garantite (OBG) for a combined size of €3 billion.



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


As we continue to unlock the significant untapped potential of our franchise, UniCredit delivered the best first half on record and an exceptional second quarter stated net profit of €2.3 billion, an increase of 14.9% year on year.


We continue to achieve excellence through a winning strategy rooted in our ongoing industrial transformation. Our performance is the outcome of high-quality fee growth despite an uncertain macroeconomic backdrop, further cost reduction despite high inflation and NII strength. This together with our structurally low Cost of Risk demonstrates how we can drive sustainable profitability.


Our extremely strong CET1 ratio of 16.64%, organic capital generation of €6.5 billion in the first half of 2023 and our profitable growth allows us to further increase the financial guidance for the year to a net profit of at least €7.25 billion and a minimum distribution of €6.5 billion. Looking ahead this serves as a baseline for what we are confident we can achieve next year as well.


Although we cannot predict macroeconomic outcomes, we do know that we are well equipped for the future with our clear strategy, diversified business mix and ever improving operating efficiency. Our sound asset quality coupled with prudent overlays and a rock-solid balance sheet provide lines of defense that position us well against uncertainties.


We have an unwavering commitment to financial success and equally to living our purpose. In these challenging times we are supporting and empowering our communities to progress and recently launched a second UniCredit per l'Italia with a potential value of €10 billion. This is aimed at supporting the disposable income of individuals and households and the liquidity of Italian businesses, and we will continue to fulfil our social responsibilities to our stakeholders across the countries where we are present.


We have achieved much but our journey is not yet complete. The excellent financial results we have accomplished over the last 10 quarters have not made us complacent and we continue to make every endeavor to deliver the best that we can for all our stakeholders.


[1] RoTE calculated at 13% CET1 ratio.

[2] Diluted Earnings Per Share.

[3] 2022 first share buyback tranche of €2.34 billion completed on 29 June 2023. 2022 second share buyback tranche of €1 billion commenced on 30 June 2023.

[4] Net profit means stated net profit adjusted for impacts from DTAs tax loss carry forward resulting from sustainability test, pre AT1 and cashes coupons which for FY23 are expected to be around €0.4 billion after tax and post integration costs which for FY23 are expected to be around €0.5 billion before tax.

[5] Subject to shareholders and supervisory approval.

[6] Total TLTRO drawn €106.8 billion, residual amount to be repaid equal to €12.6 billion with expected maturity in March 2024.

[7] UniCredit Group 2023 financial guidance available in section "Group key financial 2023 guidance" at page 5.



Milan, 26 July 2023




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