| | KOMISJA NADZORU FINANSOWEGO | | | | | | | Raport bieżący nr | 70 | / | 2015 | | | | | | Data sporządzenia: | 2015-11-12 | | | | | | | | | | | Skrócona nazwa emitenta | | | | | | | | | | UniCredit | | | | Temat | | | | | | | | | | | | | 2018 STRATEGIC PLAN FINANCIAL TARGETS | | | | Podstawa prawna | | | | | | | | | | Art. 56 ust. 1 pkt 2 Ustawy o ofercie - informacje bieżące i okresowe
| | | | Treść raportu: | | | | | | | | | | | | 2018 STRATEGIC PLAN FINANCIAL TARGETS:
CET1 RATIO AT 12.6% THANKS TO ORGANIC CAPITAL GENERATION ALLOWING FOR
SUBSTANTIAL DIVIDEND POOL
HIGHER SUSTAINABLE RETURN TO SHAREHOLDERS WITH ROTE AT 11%
NET PROFIT OF €5.3 BN
SIGNIFICANT COST CONTAINMENT MEASURES OF €1.6 BN
FURTHER UPSIDE FROM DISCONTINUITY ACTIONS
MAIN STRATEGIC ACTIONS TO REACH TARGETS:
C.18,200 FTE REDUCTION INCLUDING SALE OF UKRAINE AND PIONEER JV
EXIT OR RESTRUCTURING OF POORLY PERFORMING ASSETS BY END 2016
SIMPLER ANDMORE INTEGRATED GROUP: ELIMINATION OF THE AUSTRIAN SUB-HOLDING WITH DIRECT
CONTROL OF CEE SUBSIDIARIES BY UNICREDIT HOLDING; STRONGER CENTRAL GOVERNING FUNCTIONS
AND LEANERMANAGERIAL LAYERS
STRONG FOCUS ON HIGH GROWTH AND CAPITAL LIGHT BUSINESSES:WEALTH
MANAGEMENT, CEE & POLAND AND CIB TRANSACTIONAL AND ADVISORY SERVICES
€1.2 BN INVESTMENTS IN DIGITAL EVOLUTION
OUR MISSION IS CONFIRMED:
A LEADING,WELL-DIVERSIFIED PAN-EUROPEAN COMMERCIAL BANKING FRANCHISE
ACCELERATION ON EXECUTION TO BECOMEMORE EFFICIENT ANDMORE PROFITABLE
Today, the Board of Directors of UniCredit approved the Strategic Plan and Group 3Q15 results. Federico
Ghizzoni, CEO of UniCredit, commented:
“Today we approved a Plan envisaging ambitious goals for 2018, both in terms of profitability and capital,
thus confirming the Group’s capability to generate capital organically and distribute dividends. We aim at
these goals in a persistently tough macroeconomic environment, marked by historically low interest rates
and decelerating worldwide economic growth. The plan is rigorous and at the same time ambitious. Above
all, it is a realistic Plan, as it is based on our managerial decisions and it is a totally self-financed Plan.
Therefore, we are fully confident of its successful execution. We can now concentrate on reinforcing our
European commercial bank franchise with significant cost containment measures and further discontinuity
actions, and by exiting or restructuring poorly performing businesses. We are planning a considerable level
of investments for the future, including €1.2 billion only in our Group’s digital evolution."
* * * * * * * *
As a result of the macro-economic scenario characterized by interest rates at historical lows and regulatory
changes, which are impacting the European banking sector, the Board of Directors of UniCredit at its
meeting on November 11th, 2015 resolved to set out a new Strategic Plan outlining the business direction,
structure and organization of UniCredit to ensure sustainable return to shareholders. The 2018 key targets
are summarized below:
− A solid capital base, with a 12.6% CET1 ratio fully loaded pre-dividend distribution, above
UniCredit’s internal target of 11.5%;
− Reduction in operating expenses of €1.6 bn;
− A return on tangible capital of 11%, in excess of UniCredit’s cost of equity;
− A substantial dividend pool available for distribution, corresponding to an average pay-out of c.
40% over the Strategic Plan.
UniCredit’s Top Management execution will be focused on five key actions:
− Acceleration of cost cutting measures in staff and other administrative expenses as well as
streamlining corporate centres, aimed at staff cuts of c.18,200 FTEs by 2018;
− Exit or restructuring of poorly performing businesses such as retail banking in Austria and leasing
in Italy, on top of the ongoing rundown of the Non Core Division;
− Strong focus on the new digital agenda, underpinned by €1.2 bn investments over the 2016-18
horizon, which will accelerate the Group’s retail and corporate multi-channel transformation and
create further discontinuity from traditional banking;
− Becoming a simpler and more integrated Group, with the elimination of the Austrian sub-holding
with direct shareholding control of CEE subsidiaries by UniCredit Holding (while preserving CEE
Division know-how) by the end of 2016, strengthening central governing functions and focusing on
commercial synergies between global platforms (CIB) and the Commercial Banks networks;
− Leverage on growth businesses in CEE Region, Asset Management and Asset Gathering, increasing
capital allocation towards CEE whilst increasing and rebalancing the revenue stream towards capital
light businesses.
Unicredit confirms its mission as a well-diversified Pan-European commercial bank with a leading position
across Western and Central European countries.
2018 KEY FINANCIAL TARGETS
GROUP
Net profit: €5.3 bn and RoTE at 11%
Total costs: €12.9 bn, with cost/income ratio of 50%
Cost of risk: 67bps
Capital: CET1 ratio fully loaded at 12.6%, higher than internal target of 11.5%, allowing for substantial
dividend distribution
Loans to customers: €503 bn, with RWA at €425 bn
CORE BANK
Net profit: €6.3 bn and RoAC at 14%
Total costs: €12.8 bn, with cost/income ratio of 50%
Cost of risk: 53bps
UNICREDIT STRATEGIC PLAN
CAPITAL & PROFITABILITY
CET1 ratio fully loaded will reach 12.6% in 2018, pre-dividend distribution, above our internal target of 11.5%, a level which is consistent with regulatory requirements and the competitive landscape and will include a substantial managerial buffer compared to our minimum regulatory requirement. This solid capital base will allow the distribution of a substantial dividend, implying an average pay-out of c. 40% across the Plan. Further capital strengthening is expected upon completion of the exit from or restructuring of poorly performing businesses.
UniCredit is firmly focused on profitability, which is expected to materially increase from a RoTE of 5% in 2014 to 11% in 2018. Profitability enhancement will be achieved via significant cost cutting actions, focus on the potential of assets and wealth management in Western Europe, acceleration of growth in CEE Region, de-risking actions as well as the efficient and effective run-down of Non Core Division.
STRATEGIC ACTIONS
SIGNIFICANT COST REDUCTION
The Strategic Plan embeds a strong acceleration of cost reductions across UniCredit’s geographies and
divisions aimed at delivering a cost base of €12.9 bn in 2018 (-5% vs FY14), with a cost/income ratio target
at 50% (-11p.p. vs FY14).
Target cost savings of €1.6 bn are a result of the reduction of both staff and other administrative expenses.
In particular, staff expenses will be cut by €0.8 bn and other administrative expenses will be downsized by
€0.8 bn, mainly in Commercial Banks in Germany (-46%) and Austria (-13%).
FTEs will be reduced by c.18,200 within the Plan horizon (-14% vs FY14), including the reduction of c.6,000
FTE related to the disposal of Ukraine and the JV between Pioneer and Santander AM. FTEs reduction will
take place both in local and global Corporate Centres (-17% vs FY14) as well as in Commercial Banks in
Italy, Germany and Austria and CEE Region (-9% vs FY14). As such, in 2018, the workforce will amount to c.
111.000 FTEs.
In addition, Commercial Banks in Italy, Germany and Austria will continue to right size the number of
branches by c. 800 units by 2018, having already completed a reduction of 928 from Jan-14 to Sep-15.
Integration costs related to HR initiatives amount to approximately €1 bn, gross of tax and will be booked
mostly in 2015.
EXIT OR RESTRUCTURING OF POORLY PERFORMING ASSETS
The execution of the Plan envisages a thorough monitoring of UniCredit’s banking portfolio with the
commitment to exit or restructure low performing assets.
Recently poorly performing assets have been divested, such as Kazakhstan and are in the process of being
sold or restructured, such as Ukrsotsbank in Ukraine.
In this context, the Austrian retail activities and the Italian leasing business are under management
assessment. UniCredit anticipates to exit or restructure these businesses by the end of 2016.
UniCredit will continue to monitor its portfolio of assets and remain committed to take further decisive
actions in respect of underperforming businesses.A DIGITAL STRATEGY AIMED AT SUPPORTING PROCESS EFFICIENCIES AND INCREASE SALES
UniCredit’s digital strategy will be supported by €1.2 bn cumulated investments by 2018 and will be based
on two key pillars. Firstly, an acceleration of the digital transformation of the retail multichannel and,
secondly, building a future digital business model.
UniCredit aims at delivering a service model upgrade which will increase quality, speed of service and
customer experience. Over 90% of transactions will be carried out on remote channels by 2018. As a result,
approximately 1,500 branches will be affected between closures and new flexible formats.
In addition, the simplification of internal processes, such as back-end process and paperless
transformation, will translate into FTE efficiencies equal to c.5,800.
As a result of the ongoing investments in digitalization, UniCredit will improve time-to-market and
customer services, allow cost-to-serve optimization and higher execution effectiveness as well as
supporting commercial actions across the board, extending end-to-end and multichannel sales on all basic
banking products from currently 15% to 25% in 2018.
In this context, UniCredit is launching a new initiative, the set-up of UniCredit “buddybank", a capital-light
and mobile-only bank with 24/7 live caring service. The implementation has already started and launch will
take place in early 2017.
A SIMPLER AND MORE INTEGRATED GROUP
Top Management actions will be focused on reducing the complexity of the Group in order to simplify the
structure and strengthen central steering functions.
In this respect, all CEE subsidiaries are intended to be transferred from Bank Austria to Unicredit Holding
by the end of 2016, via elimination of the Austrian sub-holding and the subsequent direct shareholding
ownership of CEE subsidiaries by UniCredit Holding, while preserving CEE Division know how.
In addition, UniCredit has already reduced governance layers regrouping CIB and most foreign banks under
one managerial responsibility as well as bringing digital and the information & communication technology
activities under one roof.
UniCredit is committed to be a more integrated banking group with strong central governing functions and
more effective capital allocation and liquidity management. Several initiatives and organisational changes
to enhance integration across divisions and to fully exploit commercial synergies have already been
launched such as the joint ventures between Commercial Banks and CIB.
INVESTING IN CAPITAL-LIGHT AND HIGH GROWTH BUSINESSES TO FOSTER PROFITABILITY AND CAPITAL
EFFICIENCY
Continued focus on high growth potential of assets and wealth management
UniCredit continues to focus on the high growth potential of assets and wealth management where it
expects a contribution of additional fees of €2 bn, on total fees and commissions of €9.6 bn in 2018.
The Group expects growth in Total Financial Assets (TFA) to continue as well as client’s asset reallocation,
which will enable a substitution effect of other TFAs into asset under management.
In Italy, TFA are planned to increase by €78 bn and the penetration of AuM will grow from 30% in 2014 to
40% in 2018, in line with pre-crisis levels. Such growth will be achieved mainly thanks to the strengthening
of our private banking service model and to the broadening of the existing customer base.In Asset Management, UniCredit is planning to leverage on the JV with Santander AM which will give
access to a much broader distribution network on a global scale, as well as further developing of the noncaptive
business.
In Asset Gathering, Fineco will keep growing the stock of guided products on the back of the increasing
clients’ demand for investment advisory services. Fineco’s market shares are expected to increase thanks
to its superior technological platform and skilled financial advisors’ network.
In Private Banking, UniCredit will continue to focus on ultra-high net worth individuals. Recently a
dedicated company was set up in order to offer a full package of investment management and consulting
services for customers with over €5 m in financial assets.
Continued focus on CIB Division
A key priority for the Group is the consolidation of CIB’s role as enabler for client access to international
infrastructure (6,000 customers in Western Europe) and superior product capabilities. The new
management has launched a new strategy focused on four pillars: rebalancing the revenue mix towards
capital light income, exploiting flow businesses and extracting cross-border and cross-divisional synergies.
CIB revenue target stands at €4 bn in 2018; on top of that, revenues generated by CIB in the other divisions
of the Group will amount to €3 bn in 2018.
Continued focus on CEE Region
UniCredit Strategic Plan encompasses a higher capital allocation towards CEE & Poland with a target
increase of customer loans of €22 bn within 2018. The strategy will be focused on selective customer
acquisition both in retail and corporate segments, at a pace of 1 million new clients a year within the Plan.
Similarly to Western Europe, CEE Region will focus on capital light revenues and cross-selling, simplifying
and digitalising of customer facing as well as back-office processes.
Investor Relations:
Tel.+39-02-88624324; e-mail: investorrelations@unicredit.eu
Media Relations:
Tel.+39-02-88623569; e-mail: mediarelations@unicredit.eu
UNICREDIT STRATEGIC PLAN – DETAILS OF CONFERENCE CALL
MILAN, NOVEMBER 11TH 2015 – 15.30 CET
CONFERENCE CALL DIAL IN
ITALY: +39 02 805 88 11
UK: +44 1 212818003
USA: +1 718 7058794
THE CONFERENCE CALL WILL ALSO BE AVAILABLE VIA LIVE AUDIOWEBCAST AT
https://www.unicreditgroup.eu/en/investors/group-results.html, WHERE THE SLIDES WILL BE
DOWNLOADABLE
This Press Release may contain written and oral “forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of UniCredit S.p.A. (the “Company"). There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this Press Release are provided as at the date hereof and are subject to change without notice. Neither this Press Release nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.
The information, statements and opinions contained in this Press Release are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will
be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the “Other Countries"), and there will be no public offer of any such securities in the United States. This Press Release does not constitute or form a part of any offer or solicitation to
purchase or subscribe for securities in the United States or the Other Countries.
Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Marina Natale, in her capacity as manager responsible for the preparation of the Company’s financial reports declares that the accounting information contained in this Press Release reflects the UniCredit Group’s documented results, financial accounts and accounting records.
Neither the Company nor any member of the UniCredit Group nor any of its or their respective representatives, directors or employees accept any liability whatsoever in connection with this Press Release or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it. | | |
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