| | KOMISJA NADZORU FINANSOWEGO | | | | | | | Raport bieżący nr | 32 | / | 2016 | | | | | | Data sporządzenia: | 2016-05-10 | | | | | | | | | | | Skrócona nazwa emitenta | | | | | | | | | | UniCredit | | | | Temat | | | | | | | | | | | | | Consolidated Interim Report as at March 31, 2016 – Press release | | | | Podstawa prawna | | | | | | | | | | Art. 56 ust. 1 pkt 2 Ustawy o ofercie - informacje bieżące i okresowe
| | | | Treść raportu: | | | | | | | | | | | | 1 | P a g e
From this quarter, UniCredit will publish a “Consolidated Interim Report – Press Release" on a voluntary basis for 1Q and 3Q each year, in order to grant continuity with previous quarterly reports
NET PROFIT AT €406 M IN 1Q16 _+165% Q/Q_, ABOVE €640 M EXCLUDING INTEGRATION COSTS
STABLE CET1 RATIO FULLY LOADED PRO-FORMA AT 10.85% _-9BPS Q/Q, +75BPS Y/Y_
FURTHER IMPROVEMENT IN ASSET QUALITY WITH LOWER NET IMPAIRED LOANS AT €38.1 BN _-2.0%
Q/Q, -7.1% Y/Y_ AND SOLID COVERAGE RATIO OF 51.7% _+0.5P.P. Q/Q, +1.1P.P. Y/Y_.
NET BAD LOANS RATIO AT 4.2% IN 1Q16, WITH COVERAGE RATIO OF 61.2%
SIGNIFICANT INCREASE OF NET OPERATING PROFIT TO €1.4 BN _+44.4% Q/Q_ THANKS TO RESILIENT
REVENUES _+0.7% Q/Q ADJUSTED FOR ONE-OFFS_, LOWER GROUP OPERATING EXPENSES _-2.7% Q/Q_
AND REDUCED COST OF RISK _-39BPS Q/Q_
-
3.8K FTE Y/Y AND -519 BRANCHES Y/Y ACROSS ALL GEOGRAPHIES SUPPORTING CONTINUED
COST REDUCTION _-3.7% Y/Y_
INVESTMENT SERVICES FEES IN CORE BANK UP BY 7.1% Q/Q IN A CHALLENGING FINANCIAL
MARKET CONTEXT
CORE BANK COMMERCIAL DEPOSITS INCREASED BY €6.0 BN IN 1Q16,MAINLY IN ITALY AND CEE
NEW MEDIUM-LONG TERM LOAN ORIGINATION OF €15 BN IN 1Q16
IMPORTANT CONTRIBUTORS TO GROUP RESULTS COMMERCIAL BANK ITALY, CIB AND CEE.
IN CEE NET PROFIT INCREASE OF 93.6% Y/Y AS A RESULT OF HIGHER REVENUES AND LOWER LLP
DIGITAL TRANSFORMATION: STRENGTHENED LEADERSHIP IN MOBILE BANKING APPLICATIONS WITH
LAUNCH OF NEW STATE-OF-THE-ARTMOBILE SERVICES.MOBILE USERS UP BY C. 50% SINCE DEC-14
Today, the Board of Directors of UniCredit approved 1Q16 results. Federico Ghizzoni, CEO of UniCredit,
comments:
“In the first quarter of 2016, we reported a significantly higher net profit versus the previous quarter of above €640 m excluding negative one-off items, despite an extremely challenging financial environment.
Our capital ratios confirm the solidity of our Group and our asset quality continues to improve: impaired loans continuously decrease, net bad loans are stable with a coverage ratio above 61%, the highest among Italian banks. The business performance is more than satisfactory, as reflected in the growth trend of loans and deposits. In particular, the increase in investment fees in Italy is extremely positive. UniCredit is highly committed to support the economy in all its geographical constituencies: new loans origination reached €15 bn in the first quarter. UniCredit’s pan-European footprint is a key strength ensuring steady business growth. The implementation of our Strategic Plan is on track: we already achieved tangible results in terms of cost reduction and we are progressing well in the digital transformation of the bank."
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2 | P a g e
Group net profit reaches €406 m in 1Q16 and stands above €640 m excluding non-recurring items related
to restructuring charges in Austria and Italy. RoTE1 at 3.8% in 1Q16 _6.1% excluding restructuring charges_.
Strong contributors to bottom line are Commercial Bank Italy, CEE and CIB.
Net operating profit registers a strong performance at €1.4 bn _+44.4% Q/Q; +5.9% Y/Y_, thanks to:
i. resilient revenues at €5.5 bn _+0.7% Q/Q, excluding positive one-offs in Germany of €96 m booked in
4Q15 and days & FX impacts of €55 m_ supported by fees and trading growth;
ii. lower operating costs at €3.3 bn _-2.7% Q/Q, -3.7% Y/Y_ both in staff and administrative expenses;
iii. lower LLP at €755 m _-37.9% Q/Q, -22.9% Y/Y_, translating into an improved cost of risk at 63bps _-39bps
Q/Q, -19bps Y/Y_.
CET1 ratio fully loaded pro-forma2 is stable at 10.85% _-9bps Q/Q, +75bps Y/Y_. CET1 ratio transitional proforma stands at 10.50% _-23bps Q/Q_, Tier 1 ratio transitional pro-forma at 11.36% and Total Capital ratio
transitional pro-forma at 13.98%3. Basel 3 Leverage ratio transitional4 pro-forma stands at 4.49% and fully
loaded5 pro-forma at 4.42%.
Group asset quality continues to improve in 1Q16, with net impaired loans further down to €38.1 bn _- 2.0% Q/Q, -7.1% Y/Y_ with a solid coverage ratio at 51.7%. Net bad loans slightly increase at €20.2 bn with
an improved coverage ratio at 61.2%. Net bad loan ratio is stable at 4.2% in 1Q166. Other net impaired
loans further shrink by -5.4% Q/Q and -16.0% Y/Y, mainly due to higher collections and back to performing.
In Italy, asset quality experiences continued positive progress with impaired loans trend of UniCredit S.p.A.
consistently better than the Italian banking system _ABI sample7_ at the end of March 2016, with the
highest coverage ratio on gross impaired loans at 53.0%.
The Core Bank net profit increases to €973 m in 1Q16 _excluding c. €240 m of restructuring costs_.
Revenues are resilient at €5.5 bn _-2.6% Q/Q, -3.8% Y/Y_, with higher trading and investment fees offsetting
the impact of low interests rates. Costs register a downward trend, as provisions do. Commercial Bank Italy
confirms its role as largest contributor to net profit followed by CIB and CEE, notwithstanding a challenging
and adverse market environment.
New medium-long term loan origination reaches c. €15 bn in 1Q16, of which €7.5 bn in the three
Commercial Banks, €3.9 bn in CIB, €2.8 bn in CEE and c. €1 bn in Poland, thanks to UniCredit’s pan-
European franchise and cross-divisional synergies.
Commercial deposits increase by €6.0 bn to €393.5 bn _+1.5% Q/Q, +9.7% Y/Y_, mainly due to growth
registered in Commercial Bank Italy to €126.1 bn _+3.4% Q/Q, +14.4% Y/Y_ and in CEE to €58.4 bn _+4.6%
Q/Q, +17.9% Y/Y at constant FX_.
1RoTE = Net Profit / Average tangible equity _excluding Additional Tier 1_.
2Assuming _i_ unaudited 1Q16 earnings net of dividend accrual, _ii_ 2015 scrip dividend paid on May 3, 2016, with 78% shares acceptance rate, _iii_ the full absorption of DTA on goodwill tax redemption and tax losses carried forward and _iv_ Pekao minority excess capital calculated with 12% threshold.
3All transitional ratios assuming _i_ unaudited 1Q16 earnings net of dividend accrual and _ii_ 2015 scrip dividend paid on May 3, 2016, with 78% shares acceptance rate. For regulatory purposes, CET1 ratio transitional stands at 10.31%, Tier 1 ratio transitional at 11.17% and Total Capital ratio transitional at 13.79%
4Assuming _i_ unaudited 1Q16 earnings net of dividend accrual and _ii_ 2015 scrip dividend paid on May 3, 2016, with 78% shares acceptance rate. For regulatory purposes, leverage ratio transitional at 4.42%.
5Assuming _i_ unaudited 1Q16 earnings net of dividend accrual, _ii_ 2015 scrip dividend paid on May 3, 2016, with 78% shares acceptance rate, _iii_ the full absorption of DTA on goodwill tax redemption and tax losses carried forward and _iv_ Pekao minority excess capital calculated with 12% threshold.
6Calculated as €20.2 bn net bad loans divided by €483 bn total net customer loans.
7Italian Banking Association – sample composed by c. 80% of Italian banking system _excluding UniCredit S.p.A._, including exposures towards households and non-financial corporations.3 | P a g e
Strategic Plan achievements in 1Q16
− The Group continued its effort on cost reduction. The number of FTEs declined by 1,050 Q/Q and 3,804
Y/Y as a result of agreements with Workers' Council and Trade Unions. In addition, the Group agreed
with Unions to reduce c. 500 executives in Italy. In terms of administrative cost efficiencies, 92 branches
Q/Q _519 Y/Y_ were successfully closed contributing to €25 m real estate savings Q/Q.
− In terms of Group simplification, a reallocation exercise was carried out on several line items from
Corporate Centres to Business Divisions in first quarter. The transfer of CEE, via elimination of the
Austrian sub-holding and the subsequent direct ownership of CEE subsidiaries by UniCredit S.p.A., is in
progress and is to be completed by year-end.
− Digital transformation: the delivery model upgrade is accelerating both in mobile banking and in the
branch automation areas. Online banking users reached 10.5 m across the Group and mobile banking
users reached 4.3 m _c. +50% versus Dec. 2014_. In mobile banking, new state-of-the art mobile
applications were launched in Italy _Personal Financial Management and account opening_, Germany
_new banking application_ and Poland _enriched payment services_. As to branch automation, after a
successful pilot phase, a first wave of new evolved self-service machines will be installed in Italy in
2Q16. In parallel, UniCredit is progressing on two main projects to shape the Group’s future digital
business model: buddybank and UniCredit EVO.
1Q16 KEY FINANCIAL DATA
GROUP
• Net profit: €406 m _+165% Q/Q, -20.8% Y/Y_ and 3.8% RoTE _6.1% excluding restructuring charges_
• Revenues: €5.5 bn _-2.0% Q/Q, -4.7% Y/Y_
• Total costs: €3.3 bn _-2.7% Q/Q, -3.7% Y/Y_, cost/income ratio of 60.1% _-0.4p.p. Q/Q, +0.6p.p. Y/Y_
• Asset Quality: LLP at €755 m _-37.9% Q/Q, -22.9% Y/Y_, cost of risk at 63bps _-39bps Q/Q, -19bps Y/Y_;
net impaired loan ratio at 7.9% _-0.3p.p. Q/Q, -0.6p.p. Y/Y_ and coverage ratio at 51.7%; net bad loan
ratio at 4.2% and coverage ratio at 61.2%
• Capital adequacy: CET1 ratio fully loaded pro-forma at 10.85% and CET1 ratio transitional pro-forma at
10.50%; Tier 1 ratio transitional pro-forma at 11.36% and Total Capital ratio transitional pro-forma at 13.98%
CORE BANK
• Net profit: €735 m _+14.5% Q/Q, -16.3% Y/Y_ and 8.0 %RoAC8 _10.6% excluding restructuring charges_
• Revenues: €5.5 bn _-2.6% Q/Q, -3.8% Y/Y_
• Total costs: €3.2 bn _-3.1% Q/Q, -2.2% Y/Y_, cost/income ratio of 58.1% _-0.3p.p. Q/Q, +0.9p.p. Y/Y_
• Asset Quality: LLP at €413 m _-42.9% Q/Q, -28.1% Y/Y_, cost of risk at 37bps _-29bps Q/Q, -16bps Y/Y_
8RoAC = Net profit/ Allocated capital. Allocated capital is calculated as 10% of RWA, including deductions for shortfall and securitizations.4 | P a g e
UNICREDIT GROUP – 1Q16 HIGHLIGHTS
Net profit reaches €406m in 1Q16 and above €640 m, excluding non-recurring items related to restructuring charges in Austria and Italy. RoTE stands at 3.8% _6.1% excluding restructuring charges_.
Total assets rise to €892.2 bn in 1Q16 _+€31.8 bn Q/Q_, pushed by an increase both in financial assets and
investments _+€14.9 bn Q/Q_, as well as in loans to customers and banks _+€16.1 bn Q/Q_. Total liabilities
increase mainly due to a strong boost in deposits from customer _+€28.0 bn Q/Q_.
RWA/Total assets ratio decreases to 44.2% in 1Q16 _-1.2p.p. Q/Q_. RWA increase to €394.4 bn in 1Q16
_+€3.8 bn Q/Q_ as the result of an increase in credit _+€3.4 bn Q/Q_ and market RWA _+€0.8 bn Q/Q_,
partially compensated by a decrease in operational risk _-€0.4 bn Q/Q_. In particular, credit RWA growth is
mostly related to business evolution _+€4.1 bn Q/Q_ in Commercial Banks Italy and Germany, while market
RWA increases mainly on the back of higher trading assets _+€0.5 bn Q/Q_.
Commercial funding gap9 is positive at €12.2 bn _+€2.5 bn Q/Q_ mainly due to a decrease in commercial
customer securities, partially offset by the increase in both commercial loans and deposits.
Asset quality improvement accelerates in 1Q16 with gross impaired loans further down to €79.0 bn _-0.9%
Q/Q, -5.1% Y/Y_, on the back of reduced inflows from performing to impaired loans and higher collections,
with a net impaired loan ratio down to 7.9% _-0.3p.p. Q/Q, -0.6p.p. Y/Y_. Coverage ratio improves to 51.7%
in 1Q16. Gross bad loans rise to €52.0 bn _+1.8% Q/Q, +1.2% Y/Y_ with a coverage ratio improved at 61.2%.
Other gross impaired loans decline to €27.0 bn _-5.9% Q/Q, -15.2% Y/Y_.
CET1 ratio fully loaded pro-forma stands at 10.85% in 1Q16 _-9bps Q/Q, +75bps Y/Y_ with the contribution
of: _i_ earnings generation _+10bps_, _ii_ 1Q16 pro-quota dividend and CASHES coupon _-6bps_, _iii_ FX
impact _+4bps_, _iv_ RWA increases _-13bps_ and _v_ AFS & other _-4bps_. CET1 ratio transitional pro-forma
stands at 10.50% _-23bps Q/Q, +40bps Y/Y_, Tier 1 ratio transitional pro-forma and Total Capital ratio
transitional pro-forma stand at 11.36% and 13.98% respectively. Basel 3 Leverage ratio transitional proforma
at 4.49% and fully loaded pro-forma at 4.42%, confirming the solidity of UniCredit’s balance sheet.
As of today, Funding plan 2016, planned for €27.6 bn, has been executed for about €6 bn. In March, the
ECB launched a new TLTRO program to support growth in the EU. UniCredit intends to participate into this
scheme in order to support our customers, as we had done in 2014 with the existing program where we
borrowed c. €18 bn of TLTRO funds and effectively redeployed them as loans to corporates in Italy and
Austria.
CORE BANK – 1Q16 RESULTS
Net profit increases to €735 m in 1Q16 _+14.5% Q/Q, -16.3% Y/Y_ and reaches c. €1 bn, excluding
restructuring charges in Austria and Italy. Main contributors are Commercial Bank Italy with €354 m _above
100% Q/Q, -11.7% Y/Y_, CIB with €298 m _-8.1% Q/Q, -22.9% Y/Y_ and CEE with €285 m _above 100% Q/Q,
+60.6% and +93.6% Y/Y at current and constant FX respectively_. RoAC stands at 8.0% _10.6% excluding
restructuring charges_.
Net operating profit rises to €1.9 bn in 1Q16 _+16.7% Q/Q, +1.0% Y/Y_ thanks to stable revenues, lower
operating costs and provisions.
9Defined as customers loans - _customer deposits + customer securities_.5 | P a g e
Revenues are resilient and stand at €5.5 bn in 1Q16 _-2.6% Q/Q, -3.8% Y/Y_ with positive contributions
coming from all businesses and driven by Commercial Bank Italy with €1.9 bn _+4.6% Q/Q, -1.6% Y/Y_, CIB
with €1.1 bn _+16.5% Q/Q, -3.4% Y/Y_ and CEE with €912 m _-10.4% Q/Q, +0.2% and +4.0% Y/Y at current
and constant FX respectively_. During the quarter, revenues trend is mainly sustained by the positive trend
of fees in Commercial Bank Italy and Germany and trading income in CIB, mitigating the impact of low
interest rates.
Net interest income10 stands at €2.9 bn in 1Q16 _-5.3% Q/Q, -1.3% Y/Y_. Adjusted for the impact of FX &
days effect and previous quarter one-offs _totaling €151 m_, net interest income is almost flat _-0.4% Q/Q, -
1.3% Y/Y_ with the positive dynamics of loan volumes _+€38 m Q/Q, +€111 m Y/Y_ combined with term
funding _+€64 m Q/Q, +€190 m Y/Y_ and re-pricing on deposit rates _+€37 m Q/Q, +€184 m Y/Y_, more than
offsetting compression on loan rates _-€64 m Q/Q, -€340 m Y/Y_, higher deposits volumes _-€10 m Q/Q, -
€49 m Y/Y_ and treasury activity _-€77 m Q/Q, -€81 m Y/Y_.
Customer loans slightly increased to €450.0 bn in 1Q16 _+2.7% Q/Q, +2.2% Y/Y_, with contributions from
Commercial Bank Italy at €135.7 bn _+3.2% Q/Q, +2.0% Y/Y_, Commercial Bank Germany at €79.9 bn _-0.7%
Q/Q, +0.8% Y/Y_ and CEE at €58.0 bn _+1.2% Q/Q, -2.2% and +1.7% Y/Y at current and constant FX
respectively_. Institutional and market counterparts contribute with €48.3 bn _+15.9% Q/Q, +5.9% Y/Y_.
New medium-long term lending reaches €15 bn in 1Q16. In particular in Commercial Banks, new
production stands €7.5 bn in 1Q16 _-0.2% Q/Q, -4.9% Y/Y_. New flows are particularly robust in Italy at €4.4
bn _+15.4% Q/Q, -3.3% Y/Y_, sustained both by household mortgages at €1.4 bn _+9.7% Q/Q, +88.9% Y/Y_
and by mid-corporates at €1.4 bn _+19.7% Q/Q, -37.6% Y/Y_.
Customer direct funding11 increases to €605.8 bn in 1Q16 _+3.9% Q/Q, +5.9% Y/Y_. Commercial Bank Italy,
Commercial Bank Germany and CIB are top contributors. Institutional and market counterparts contribute
with €80.5 bn _+42.5% Q/Q, +24.1% Y/Y_.
Dividends and other income12 are down to €297 m in 1Q16 _-11.3% Q/Q, +86.0% Y/Y_. Yapi Kredi
contributes €72 m in 1Q16 _-44.6% Q/Q at current FX, +2.2% and +18.9% Y/Y at current and constant FX
respectively_, mainly affected by a reduction in revenues at €297 m in 1Q16 _-18.2% Q/Q_ only partially
compensated by a drop in operating costs at €130 m _-12.0% Q/Q_.
Fees and commissions register a solid performance with €1.9 bn in 1Q16 _+0.6% Q/Q, -1.8% Y/Y_ despite a
challenging market environment. Investment services take the lion share contributing to €905 m in 1Q16
_+7.1% Q/Q, -1.1% Y/Y_ supported by resilient net sales, change in asset mix towards products with higher
added-value and profitability and mainly driven by Italy. Financing services fees stand at €508 m in 1Q16 _-
1.2% Q/Q, +1.9% Y/Y_. Transactional and banking service fees decrease to €533 m in 1Q16 _-7.4% Q/Q, -
6.3% Y/Y_ mainly due to new regulations _i.e. interchange fees and new regulation on CPI products_ and
reduction in FOREX activity.
Trading income rises at €344 m in 1Q16 _+15.0% Q/Q, -44.7% Y/Y_ mainly supported by customer driven
activities benefitting from a rebound in financial markets. CIB is the main contributor to trading profit with
€266 m _above 100% Q/Q, -22.7% Y/Y_.
10Contribution from macro hedging strategy on non-naturally hedged sight deposits in 1Q16 at €373 m _€369 m in 4Q15 and €370 m in 1Q15_.
11Direct funding defined as the sum of total customer deposits, customer securities in issue and financial liabilities designated at fair value.
12Include dividends, equity investments and balance of other operating income / expenses. Turkey contribution based on a divisional view.6 | P a g e
Total costs decrease to €3.2 bn in 1Q16 _-3.1% Q/Q, -2.2% Y/Y_ as the result of _i_ a reduction in staff costs
to €2.0 bn _-0.9% Q/Q, -2.1% Y/Y_ as a result of lower FTE mainly in the three Commercial Banks and _ii_ a
shrink in other administrative expenses at €1.1 bn _-7.9% Q/Q, -4.7% Y/Y_ due to lower real estate costs,
consulting fees, marketing and advertising costs. Cost/Income ratio is stable at 58.1% in 1Q16.
LLP reduces to €413 m in 1Q16 _-42.9% Q/Q, -28.1% Y/Y_ driven by improved asset quality across the Core
Bank and benefiting from exceptional performance in Commercial Banks Italy and Germany. Cost of risk
reduces to 37bps _-29bps Q/Q, -16bps Y/Y_.
Other charges and provisions stand at €390 m in 1Q16 _-45.8% Q/Q, +55.7% Y/Y_, including €368 m13 of
additional costs for systemic charges.
Integration costs stand at €259 m in 1Q16 _-33.4% Q/Q, above 100% Y/Y_ including c. €250 m of additional
impact in Austria and integration costs in Italy.
NON-CORE BANK – 1Q16 RESULTS
De-risking continues with gross customer loans further down to €60.7 bn at the end of March _-€2.8 bn
Q/Q, -€10.8 bn Y/Y_, mainly thanks to performing loan transfers back to the Core Bank _€1.6 bn_, improvement in cash recoveries _+26% Y/Y in UniCredit S.p.A._, maturities _c. €0.6 bn_ and impaired loans disposals _€0.1 bn_ in 1Q16. RWA continue reduction to €29.2 bn in 1Q16 _-6.2% Q/Q, -19.3% Y/Y_.
Gross impaired loans confirm the downward trend reaching €51.5 bn _-1.0% Q/Q, -5.8% Y/Y_, coupled with
a sound coverage ratio at 52.5% _almost stable Q/Q_. Gross bad loans up to €37.8 bn _+1.1% Q/Q, +4.1%
Y/Y_, due to the natural ageing of the defaulted portfolio, with a solid coverage ratio stable at 60.0%. Other
impaired loans shrink to €13.7 bn _-6.3% Q/Q, -25.4% Y/Y_ as a result of lower inflows from performing,
with a resilient coverage ratio of 31.7%.
Bottom line shows a loss of €329 m in 1Q16, due to reduced LLP at €342 m _-30.4% Q/Q, -15.6% Y/Y_
offsetting increasing operating costs. LLP and cost of risk are also significantly lower in the quarter due to
particularly low flows from performing to impaired.
DIVISIONAL HIGHLIGHTS – 1Q16 RESULTS
Starting from 1Q16, UCG divisional segmentation has been revised following the application of new
financial criteria and the allocation of several Balance Sheet and Income Statement items from Corporate
Centres to Business Divisions. This simplification allows more transparency of Corporate Centres and
facilitates the analysis of Business Divisions. Main changes are related to:
− review of sight deposits remuneration in Business Divisions, aligned with current market conditions;
− centralization of the investment portfolio in CIB;
− transfer of the insurance JVs with CNP, Aviva and Credit RAS to Commercial Bank Italy;
− reallocation of some RWA and DTA to Business Divisions.
Group figures are unaffected.
* * *
13Referring to the contributions to:
_i_ Single Resolution Fund of c. €225 m _of which €72 m in Italy, €71 m in Germany, €35 m in Austria and €47 m in CEE_,
_ii_ bank levies of c. €67 m _of which €32 m in Austria, €18 m in Poland and €16 m in CEE_ and
_iii_ Deposit Guarantee Scheme of c. €76 m _of which €23 m in CEE, €19 m in Germany, €18 m in Austria and €15 m in Poland_.7 | P a g e
Commercial Bank Italy is the main contributor to Group earnings with €354 m in 1Q16 _above 100% Q/Q, -
11.7% Y/Y_ despite the impact of integration costs in Italy _€33 m_. The positive contribution from revenues
is confirmed, reaching €1.9 bn _+4.6% Q/Q, -1.6% Y/Y_, driven by resilient net interest income at €997 m
_+0.1% Q/Q, -5.3% Y/Y_ and solid fee and commission generation to €932 m _+13.6% Q/Q, +1.2% Y/Y_ in
1Q16. Investment services fees strongly up to €481 m _+30.8% Q/Q, +7.5% Y/Y_ despite the challenging
market environment.
Operating costs slightly up to €1.1 bn _+2.7% Q/Q, +3.5% Y/Y_ offset by a reduction in LLP to €236 m _-
44.5% Q/Q, -20.5% Y/Y_. Cost/Income ratio reduces to 56.5% in 1Q16 _-1.1p.p. Q/Q, +2.8p.p. Y/Y_.
CIB14 remains one of the top contributors to Group bottom-line result with a solid net profit equal to €298
m in 1Q16 _-8.1% Q/Q, -22.9% Y/Y_, despite high market volatility during the first quarter.
Resilient revenue generation at €1.1 bn in 1Q16 _+16.5% Q/Q, -3.4% Y/Y_ sustained by all product lines,
while efficient cost management brings operating expenses down to €424 m in 1Q16 _+0.4% Q/Q, -5.8%
Y/Y_ following FTEs reduction _-29 units Q/Q, -72 units Y/Y_ and a well-managed cost control. LLP reaches
€55 m in 1Q16.
CIB managed to increase commercial lending volumes at €57.0 bn in 1Q16 _+1.7% Q/Q, +11.5% Y/Y_
registering a moderate increase in RWA to €70.9 bn _+3.9% Q/Q, -5.9% Y/Y_. RoAC stands at 16.8% in 1Q16,
confirming the high profitability of the division.
CIB’s leading position is also reflected in league table rankings as #3 in “EMEA Syndicated Loans EURDenominated" 15 and in the excellent results achieved in corporate bond activity in Core Countries16 _#1 in
“All Italian Bonds", #2 in “All German Bonds" and #1 in “All Austrian Bonds"_.
Global Transaction Banking confirms its leadership in Trade Finance. UniCredit has a leading market share
in Italy of approximately 30%, both in import and export; while in Germany, it is the third largest player in
export trade finance.
CEE17 continues to be a significant contributor to Group results, with net profit at €285 m in 1Q16 _above
100% Q/Q, +93.6% Y/Y_, in a context of adverse global macro-economic conditions and €86 m of
contributions to systemic charges. The strongest contributors to CEE division bottom line are Turkey with
€72 m _-42.5% Q/Q, +18.9% Y/Y_ and Czech Republic & Slovakia with €49 m _+26.1% Q/Q, -20.2% Y/Y_.
Positive results are also achieved in Bulgaria with earnings at €46 m _+48.4% Q/Q, +8.1% Y/Y_ and Russia at
€45 m _-15.6% Q/Q, -18.3% Y/Y_.
Net operating profit is significantly increase to €411 m in 1Q16 _+18.3% Q/Q, +12.8% Y/Y_ thanks to the
positive performance both in revenues and costs.
Solid revenues across all countries at €912 m _-8.4% Q/Q, +4.0% Y/Y_ mainly driven by net interest income
at €581 m _+0.5% Q/Q, +3.4% Y/Y_ and fee income at €174 m _-6.5% Q/Q, +4.8% Y/Y_. Operating expenses
are down to €361 m _-8.6% Q/Q, +4.4% Y/Y_, due to lower FTE, leading to a flat C/I ratio at 39.6% in 1Q16.
LLP significantly reduced to €140 m _-44.5% Q/Q, -15.8% Y/Y_ supported by lower provisions in most CEE
countries.
14We highlight developments in the quarter with reference to loan restructuring operation into participating instruments _Carlo Tassara S.p.A._. The credit exposure recorded in UniCredit S.p.A. as at March 31, 2016 amounts to €74 m _€91 m as at December 31, 2015_ against which there are recognized value
adjustments for €28 m _€13 m at the end of December 2015_. Please refer to the Consolidated Financial Report as at December 31, 2015 for further details of the recovery plan and its evolution to date
15Source: Dealogic Loanware, per 6 April 2016. Period: 1 Jan – 31 Mar 2016.
16Source: Dealogic Loanware, per 1 April 2016. Period: 1 Jan – 31 Mar 2016.
17For CEE, changes at constant FX.8 | P a g e
Sound asset quality is confirmed, with gross impaired loans18 further down to €6.2 bn in 1Q16 _-1.2% Q/Q,
-4.8% Y/Y_. Impaired coverage ratio stands at 55.9% in 1Q16 _+118bps Q/Q_.
Asset Management _AM_ and Asset Gathering _AG_ show solid bottom line results in 1Q16 with a positive
net profit of €45 m and €33 m, respectively _+39.1% and +21.3% Q/Q for AM and AG respectively_. AG posts higher revenues at €140 m _+2.4% Q/Q, +2.5% Y/Y_ driven by resilient net interest income and solid fee and commission growth. In addition, the remarkable increase in trading activity in AG at €20 m _+56.1% Q/Q, +15.2% Y/Y_ confirms the excellent business model able to generate strong results in adverse market conditions. In AM, well managed operating costs at € 135 m _-26.8% Q/Q, -2.2% Y/Y_ offset the impact of fees reduction to €207 m _-12.4% Q/Q, -6.0%Y/Y_.
SIGNIFICANT EVENTS DURING AND AFTER 1Q16
With reference to the significant events occurred during the quarter until the date of approval of this Consolidated Interim Report – Press Release, please refer to section “Subsequent Events" in the Report on Operations included in the Consolidated Financial Statements as at December 31, 2015, as well as the press releases published on UniCredit Group website. In particular :
− buddybank: the new “molecular" bank of UniCredit – which will actually start its operations on January 1, 2017 – is designed exclusively for smartphone users. The bank will offer 3 financial products _modular current accounts, innovative credit/debit cards, instant and contextual loans_ as well as a 24/7 concierge service _similar to the ones of big hotels_, accessible via mobile chat and phone. The activities planned to launch the bank are on track: the authorization request to Bank of Italy has already been sent; a partnership with Mastercard has been signed; also, buddybank has already been working in partnership with IBM on the core banking platform. Buddybank is a cornerstone of the digitalization and innovation strategy of UniCredit; it expects to reach 1 m customers in Italy in 5 years while the break-even is expected in the third year with 300k customers.
− UniCredit EVO Investment Partnership: UniCredit and Anthemis Group _investment and advisory firm focused on re-inventing financial services_ launched a new partnership through the establishment of a new investment fund _UniCredit EVO – Equity Venture Opportunities_, which aims at identifying the best investment opportunities, in both already consolidated fintech companies and new start-ups. Through the investment, UniCredit will have the opportunity to scout for new fintech solution, to be then used to innovate the Group’s banking business. The initial expected commitment is €175 m, which completes the commitment of UniCredit to invest €25 m in “Anthemis Venture Fund I", a fund already established by Anthemis. The partnership was announced on March 23 and as of today the fund has already done its first investment of €5 m in a US based company, called TROV, dealing with customers’ property assets.
− “UniCredit: Binding Agreement Reached to sell Ukrsotsbank to Alfa Group's ABH Holdings" _press release published on January 11, 2016 on UniCredit Group website_. As anticipated, the transaction will be finalized in the course of 2016.
− UniCredit Bank Austria AG _“UCBA"_: the Austrian Parliament approved a new ordinary law _published on April 13, 2016_ on the transfer of pension obligations regarding active employees of UCBA to the Austrian national pension system. The new law confirms the effectiveness of this kind of agreements, whose nature and features are the same of the Agreement reached between UCBA and the Central Works Council on December 14, 2015. The agreement will apply retroactively, in particular increasing 18Excluding Turkey and Ukraine.
9 | P a g e
the amount to be paid towards the transfers occurring from February 1, 2016 from 7% to 22.8% of the latest wage paid to the employee. The new law will be fully effective following the opinion of the European Commission on State aids. Despite UCBA believes that the new law is unconstitutional in light of its retroactive effect and the significant increase in the percentage to be applied for the transfer of pension obligations, UCBA made provisions for the higher costs related to the new law and at the same time revised the HR-related charges related to the restructuring plan, reflecting the developments of the plan itself. Net increase of restructuring charges amounted to €204 m pre-tax in 1Q16.
− Fondo Atlante: press releases published on April 18, 20 and 25, 2016.
OUTLOOK
The global recovery slowed at the turn of the year amid uncertainty regarding growth prospects stemming
from emerging markets and it is expected to continue to expand at a gradual pace going forward. Despite
the financial turbulence at the beginning of the year, the eurozone economy expanded at a solid 0.6% Q/Q
in 1Q16, mostly driven by domestic factors in the wake of sluggish global trade. For the year as a whole, we
expect the eurozone GDP to grow by 1.7% _vs 1.5% in 2015_ with domestic demand remaining the main
driver of growth. Germany’s growth outperformance vs the eurozone is expected to wane, while Italy
should narrow its negative growth gap. The monetary policy of the ECB will continue to be extremely
accommodating. The new round of the stimulus package approved at the beginning of March is targeted at
further improving the transmission mechanism of monetary policy and is expected to bring relief to the
banking sector. The ongoing, albeit slow, progress of the economic recovery in Europe will continue to
support the Group’s results during 2016, facilitating the improvement of asset quality, combined with the
Group’s undiminished commitment on cost containment and fee growth.10 | P a g e
UNICREDIT GROUP: RECLASSIFIED INCOME STATEMENT
_€ million_ 1Q15 4Q15 1Q16 Y/Y% Q/Q%
Net interest 2,963 3,029 2,876 -2.9% -5.0%
Dividends and other income fromequity investments 118 250 212 +79.0% -15.4%
Net fees and commissions 2,014 1,935 1,946 -3.4% +0.6%
Net trading, hedging and fair value income 619 302 362 -41.5% +19.8%
Net other expenses/income 34 73 80 n.m. +10.2%
OPERATING INCOME 5,749 5,589 5,476 -4.7% -2.0%
Staff expenses _2,093_ _2,053_ _2,028_ -3.1% -1.2%
Other administrative expenses _1,289_ _1,289_ _1,202_ -6.7% -6.7%
Recovery of expenses 188 210 176 -6.4% -16.1%
Amort. deprec. and imp. losses on intang. & tang. assets _224_ _250_ _237_ +5.7% -5.5%
OPERATING COSTS _3,418_ _3,382_ _3,291_ -3.7% -2.7%
OPERATING PROFIT _LOSS_ 2,331 2,207 2,186 -6.2% -0.9%
Net write-downs on loans and provisions _980_ _1,216_ _755_ -22.9% -37.9%
NETOPERATING PROFIT _LOSS_ 1,351 991 1,430 +5.9% +44.4%
Other charges and provisions _264_ _807_ _417_ +58.0% -48.3%
Integration costs _1_ _398_ _260_ n.m. -34.7%
Net income frominvestments _5_ _39_ _17_ n.m. -55.6%
PROFIT _LOSS_BEFORE TAX 1,080 _254_ 736 -31.9% n.m.
Income tax for the period _343_ 640 _246_ -28.2% n.m.
NETPROFIT _LOSS_ 737 387 490 -33.6% +26.7%
Profit _Loss_ fromnon-current assets held for sale, after tax _58_ _143_ 14 n.m. n.m.
PROFIT _LOSS_ FOR THE PERIOD 679 244 503 -25.9% n.m.
Minorities _102_ _72_ _93_ -8.2% +30.1%
NETPROFIT _LOSS_ATTRIBUTABLE TOTHEGROUP BEFORE PPA 577 172 410 -29.0% n.m.
Purchase Price Allocation effect _65_ _19_ _4_ -93.5% -77.3%
Goodwill impairment - - - n.m. n.m.
NETPROFIT _LOSS_ATTRIBUTABLE TOTHEGROUP 512 153 406 -20.8% +165.2%11 | P a g e
UNICREDIT GROUP: RECLASSIFIED BALANCE SHEET
_€ million_ 1Q15 4Q15 1Q16 Y/Y% Q/Q%
ASSETS
Cash and cash balances 9,870 10,303 9,419 -4.6% -8.6%
Financial assets held for trading 114,356 90,997 97,880 -14.4% +7.6%
Loans and receivables with banks 89,014 80,073 86,907 -2.4% +8.5%
Loans and receivables with customers 482,658 473,999 483,282 +0.1% +2.0%
Financial investments 148,503 152,845 160,899 +8.3% +5.3%
Hedging instruments 11,482 8,010 8,562 -25.4% +6.9%
Property, plant and equipment 10,278 10,031 9,635 -6.3% -3.9%
Goodwill 3,668 3,618 3,598 -1.9% -0.6%
Other intangible assets 2,020 2,140 2,115 +4.7% -1.2%
Tax assets 14,595 15,726 15,715 +7.7% -0.1%
Non-current assets and disposal groups classified as held for sale 3,915 2,820 3,509 -10.4% +24.4%
Other assets 10,291 9,872 10,682 +3.8% +8.2%
Total assets 900,649 860,433 892,203 -0.9% +3.7%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits from banks 130,422 111,373 112,130 -14.0% +0.7%
Deposits from customers 423,162 449,790 477,833 +12.9% +6.2%
Debt securities in issue 150,625 134,478 128,181 -14.9% -4.7%
Financial liabilities held for trading 90,224 68,919 71,793 -20.4% +4.2%
Financial liabilities designated at fair value 539 455 1,217 n.m. n.m.
Hedging instruments 16,408 11,254 12,263 -25.3% +9.0%
Provisions for risks and charges 10,449 9,855 9,495 -9.1% -3.6%
Tax liabilities 1,892 1,529 1,657 -12.4% +8.4%
Liabilities included in disposal groups classified as held for sale 1,479 1,880 2,760 +86.7% +46.8%
Other liabilities 20,408 17,416 20,930 +2.6% +20.2%
Minorities 3,711 3,399 3,513 -5.4% +3.4%
Group Shareholders' Equity: 51,331 50,087 50,431 -1.8% +0.7%
- Capital and reserves 50,655 48,315 49,971 -1.4% +3.4%
- Available-for-sale assets fair value reserve, cash-flow hedging reserve and
defined benefits plans reserve 164 77 55 -66.7% -29.5%
-Net profit _loss_ 512 1,694 406 -20.8% -76.1%
Total liabilities and Shareholders' Equity 900,649 860,433 892,203 -0.9% +3.7%12 | P a g e
CORE BANK: RECLASSIFIED INCOME STATEMENT
_€ million_ 1Q15 4Q15 1Q16 Y/Y% Q/Q%
Net interest 2,942 3,065 2,903 -1.3% -5.3%
Dividends and other income from equity investments 118 250 212 +79.0% -15.4%
Net fees and commissions 1,983 1,935 1,946 -1.8% +0.6%
Net trading, hedging and fair value income 621 299 344 -44.7% +15.0%
Net other expenses/income 41 84 85 n.m. +0.7%
OPERATING INCOME 5,706 5,634 5,490 -3.8% -2.6%
Staff expenses _2,057_ _2,032_ _2,013_ -2.1% -0.9%
Other administrative expenses _1,155_ _1,196_ _1,101_ -4.7% -7.9%
Recovery of expenses 172 184 159 -7.7% -13.9%
Amort. deprec. and imp. losses on intang. & tang. assets _224_ _250_ _236_ +5.6% -5.5%
OPERATING COSTS _3,264_ _3,293_ _3,191_ -2.2% -3.1%
OPERATING PROFIT _LOSS_ 2,442 2,340 2,299 -5.9% -1.8%
Net write-downs on loans and provisions _575_ _724_ _413_ -28.1% -42.9%
NETOPERATING PROFIT _LOSS_ 1,867 1,616 1,885 +1.0% +16.7%
Other charges and provisions _251_ _720_ _390_ +55.7% -45.8%
Integration costs _1_ _389_ _259_ n.m. -33.4%
Net income from investments _5_ _39_ _15_ n.m. -62.3%
PROFIT _LOSS_BEFORE TAX 1,610 468 1,221 -24.1% n.m.
Income tax for the period _507_ 407 _403_ -20.5% n.m.
Profit _Loss_ from non-current assets held for sale, after tax _58_ _143_ 14 n.m. n.m.
PROFIT _LOSS_ FOR THE PERIOD 1,044 732 832 -20.3% +13.7%
Minorities _102_ _72_ _93_ -8.2% +30.1%
NET PROFIT _LOSS_ATTRIBUTABLE TOTHEGROUP BEFORE PPA 943 660 739 -21.6% +11.9%
Purchase Price Allocation effect _65_ _19_ _4_ -93.5% -77.3%
Goodwill impairment - - - n.m. n.m.
NET PROFIT _LOSS_ATTRIBUTABLE TOTHEGROUP 877 641 735 -16.3% +14.5%13 | P a g e
NON-CORE: RECLASSIFIED INCOME STATEMENT
_€ million_ 1Q15 4Q15 1Q16 Y/Y% Q/Q%
Net interest 21 _36_ _27_ n.m. -26.9%
Dividends and other income from equity investments - - - n.m. n.m.
Net fees and commissions 31 _0_ _1_ n.m. n.m.
Net trading, hedging and fair value income _2_ 3 18 n.m. n.m.
Net other expenses/income _7_ _12_ _5_ -33.6% -58.6%
OPERATING INCOME 43 _45_ _14_ n.m. -69.5%
Staff expenses _36_ _20_ _15_ -59.3% -27.9%
Other administrative expenses _134_ _94_ _102_ -24.2% +8.5%
Recovery of expenses 16 25 17 +7.0% -32.2%
Amort. deprec. and imp. losses on intang. & tang. assets _0_ _0_ _0_ n.m. +2.7%
OPERATING COSTS _154_ _89_ _99_ -35.5% +11.7%
OPERATING PROFIT _LOSS_ _111_ _134_ _113_ +1.9% -15.5%
Net write-downs on loans and provisions _405_ _491_ _342_ -15.6% -30.4%
NETOPERATING PROFIT _LOSS_ _516_ _625_ _455_ -11.8% -27.2%
Other charges and provisions _13_ _87_ _27_ n.m. -69.1%
Integration costs - _9_ _1_ n.m. n.m.
Net income from investments - _0_ _3_ n.m. n.m.
PROFIT _LOSS_BEFORE TAX _529_ _722_ _486_ -8.2% -32.7%
Income tax for the period 164 233 157 -4.4% -32.8%
Profit _Loss_ from non-current assets held for sale, after tax - - - n.m. n.m.
PROFIT _LOSS_ FOR THE PERIOD _365_ _488_ _329_ -10.0% -32.7%
Minorities - - - n.m. n.m.
NET PROFIT _LOSS_ATTRIBUTABLE TOTHEGROUP BEFORE PPA _365_ _488_ _329_ -10.0% -32.7%
Purchase Price Allocation effect - - - n.m. n.m.
Goodwill impairment - - - n.m. n.m.
NET PROFIT _LOSS_ATTRIBUTABLE TOTHEGROUP _365_ _488_ _329_ -10.0% -32.7%14 | P a g e
UNICREDIT GROUP: SHAREHOLDERS’ EQUITY
Note: _*_ This positive effect is mainly due to the impact of the Rouble for €118 m partially net of the negative effect of Krivna for €61 m. _**_ This includes mainly the negative change in the valuation reserve of the companies accounted for using the equity method for €55 m, mainly due to the valuation of the items
in Turkish Lira.
UNICREDIT GROUP: STAFF AND BRANCHES
Note: _*_ "Full Time Equivalent" data _FTE_: number of employees counted for the rate of presence.
UNICREDIT GROUP: RATINGS
Note: S&P lowered Italy’s long-term and short-term ratings to “BBB-"/“A-3" on December 5, 2014 and subsequently took the same rating action on December 18, 2014 on UniCredit S.p.A. On December 2, 2015, S&P affirmed UniCredit S.p.A.’s ratings with Stable outlook.
Moody’s on June 22, 2015 when implementing its new bank rating criteria and reduced government support assumptions, upgraded UniCredit S.p.A.’s long-term deposit and senior unsecured debt ratings to “Baa1" _from “Baa2"_, which is 1 notch higher than Italy. The outlook is Stable.
Fitch on March 24, 2016 changed the outlook of UniCredit S.p.A.'s “BBB+" rating to Negative _from Stable_.
_€ million_
Shareholders' Equity as at December 31, 2015 50,087
Capital increase _net of capitalized costs_ -
Equity instruments -
Disbursements related to Cashes transaction _"canoni di usufrutto"_ _33_
Dividend payment -
Forex translation reserve _*_ 76
Change in afs/cash-flow hedge reserve _26_
Others _**_ _78_
Net profit _loss_ for the period 406
Shareholders' Equity as atMarch 31, 2016 50,431
Staff and Branches _units_ 1Q15 4Q15 1Q16 Y/Y Δ Q/Q Δ
Employees _*_ 128,263 125,510 124,459 -3,804 -1,050
Branches 7,361 6,934 6,842 -519 -92
- o/w, Italy 3,961 3,873 3,805 -156 -68
- o/w, other countries 3,400 3,061 3,037 -363 -24
SHORT-TERM MEDIUM AND STANDALONE DEBT LONG-TERM RATING
Standard & Poor's A-3 BBB- STABLE bbb-
Moody's P-2 Baa1 STABLE ba1
Fitch Ratings F2 BBB+ NEGATIVE bbb+
OUTLOOK15 | P a g e
UNICREDIT GROUP: LOANS TO CUSTOMER – ASSET QUALITY_*_
Note: _*_ The perimeter of impaired loans is substantially equivalent to the perimeter of EBA "Non-Performing Exposure" _NPE_.
UNICREDIT GROUP: SOVEREIGN LOANS – BREAKDOWNBY COUNTRY
The table below shows the total amount as at March 31, 2016 of loans given to countries towards which the overall exposure exceeds €140 m, representing about 94% of the total. Tax items are excluded.
Sovereign exposures are loans given to and bonds issued by central and local governments and governmental bodies. ABS are not included.
Note: _*_ of which €1,339.1 m financial assets held for trading and those at fair value through profit or loss. _**_ of which €311.7 m in financial assets at fair value through profit or loss.
_€ million_
Bad exposures
Unlikely to pay
other than bad
Non performing
past-due
Total non
performing Perfoming
TOTAL
LOANS
As at 03.31.2016
Gross Exposure 52,032 24,804 2,171 79,008 447,410 526,418
as a percentage of total loans 9.9% 4.7% 0.4% 15.0% 85.0%
Writedowns 31,863 8,406 596 40,865 2,272 43,136
as a percentage of face value 61.2% 33.9% 27.4% 51.7% 0.5%
Carrying value 20,170 16,398 1,575 38,143 445,139 483,282
as a percentage of total loans 4.2% 3.4% 0.3% 7.9% 92.1%
As at 12.31.2015
Gross Exposure 51,089 26,054 2,617 79,760 437,495 517,255
as a percentage of total loans 9.9% 5.0% 0.5% 15.4% 84.6%
Writedowns 31,165 8,968 707 40,840 2,417 43,257
as a percentage of face value 61.0% 34.4% 27.0% 51.2% 0.6%
Carrying value 19,924 17,086 1,910 38,920 435,079 473,999
as a percentage of total loans 4.2% 3.6% 0.4% 8.2% 91.8%
_€ million_ Book value
As at 03.31.2016
- Germany _*_ 7,947
- Italy 5,815
- Austria _**_ 5,223
- Croatia 2,465
- Poland 1,363
- Indonesia 324
- Serbia 307
- Slovenia 213
- Gabon 196
- Bosnia and Herzegovina 189
- Turkey 172
- Bulgaria 169
Total on-balance sheet exposures 24,38216 | P a g e
UNICREDIT GROUP: SOVEREIGN DEBT SECURITIES – BREAKDOWNBY COUNTRY/
PORTFOLIO
With reference to the Group’s sovereign exposures, the book value of sovereign debt securities as at March 31, 2016 amounts to €140,814 m, of which over 90% concentrated in 8 countries; Italy, with €62,700 m, represents about 45% of the total. For each of the 8 countries, the table below shows the exposures broken down by portfolio as at March 31, 2016.
Note: _*_ including exposures in Credit Derivatives.
_€ million_ Book value
As at 03.31.2016
- Italy 62,700
financial assets/liabilities held for trading _net exposures *_ 4,172
financial assets at fair value through profit or loss 1
available for sale financial assets 57,583
loans and receivables 190
held tomaturity investments 754
-Germany 20,593
financial assets/liabilities held for trading _net exposures *_ 1,403
financial assets at fair value through profit or loss 16,952
available for sale financial assets 1,202
loans and receivables 1,036
held tomaturity investments -
- Spain 16,867
financial assets/liabilities held for trading _net exposures *_ 50
financial assets at fair value through profit or loss 4,401
available for sale financial assets 12,411
loans and receivables -
held tomaturity investments 6
-Austria 9,994
financial assets/liabilities held for trading _net exposures *_ 358
financial assets at fair value through profit or loss 395
available for sale financial assets 9,046
loans and receivables 82
held tomaturity investments 114
- Poland 8,434
financial assets/liabilities held for trading _net exposures *_ 85
financial assets at fair value through profit or loss -
available for sale financial assets 6,313
loans and receivables 1,231
held tomaturity investments 805
- France 4,487
financial assets/liabilities held for trading _net exposures *_ _ 27_
financial assets at fair value through profit or loss 479
available for sale financial assets 4,034
loans and receivables -
held tomaturity investments -
- Czech Republic 2,331
financial assets/liabilities held for trading _net exposures *_ _ 2_
financial assets at fair value through profit or loss 3
available for sale financial assets 2,330
loans and receivables -
held tomaturity investments -
-Hungary 1,878
financial assets/liabilities held for trading _net exposures *_ 119
financial assets at fair value through profit or loss -
available for sale financial assets 1,758
loans and receivables -
held tomaturity investments -
Total on-balance sheet exposures 127,28417 | P a g e
The remaining 10% of the total of sovereign debt securities, amounting to €13,530 m with reference to the book values as at March 31, 2016, is divided into 50 countries, including Russia _€1,077 m_, Slovenia _€408 m_, the US _€320 m_, Portugal _€106 m_, Ireland _€20 m_ and Argentina _€5 m_. The sovereign exposure to
Greece, Cyprus and Ukraine is immaterial.
With respect to these exposures, as at March 31, 2016 there are no indications that impairment may have occurred.
It should moreover be noted that among the aforementioned remaining part of sovereign debt securities as at March 31, 2016 there are also debt securities towards Supranational Organizations such as the European Union, the European Financial Stability Facility and the European Stability Mechanism amounting to
€3,797 m.18 | P a g e
BASIS OF PREPARATION
1. This Consolidated Interim Report as at March 31, 2016 - Press Release has been prepared on a voluntary basis, with the aim to ensure continuity with the previous quarterly reports19, following the elimination of the requirement to disclose additional financial information to the half-year and annual reports pursuant to law _D. Lgs._ 25/2016, issued in application of Directive 2013/50/EU. This Consolidated Interim Report as at March 31, 2016 - Press Release as well as the press releases on significant events occurred during the period, the
market presentation of 1Q16 results, the Divisional Database and the disclosure by institutions pursuant to Regulation _EU_ No.575/2013 are available on UniCredit Group website.
2. Reclassified balance sheet and income statements have been prepared pursuant to Banca d’Italia instructions laid down in Circular 262/2005 and applying the aggregations and reclassifications disclosed in Annex 1 of Consolidated Financial Statements as at December 31, 2015.
3. The contents of this Consolidated Interim Report as at March 31, 2016 - Press Release are not prepared according to the international accounting standard on interim reporting _IAS 34_.
4. The Consolidated Interim Report as at March 31, 2016 - Press Release, which is presented in reclassified form, has been prepared on the basis of IAS/IFRSs in force, as detailed in the Explanatory Notes to the Consolidated Accounts - Part A - Accounting Policies of the Consolidated Financial Statements as at December 31, 2015, with the exception of the elements highlighted below:
For the purposes of the Consolidated Interim Report as at March 31, 2016 – Press Release, the following valuation processes have not been updated:
a. re-measurement of recoverable amount of tangible and intangible assets, including goodwill and assets evaluated on the basis of the same estimates;
b. update of the actuarial valuations of “post-employment defined benefit" plans. The effects of the re-measurement of such “postemployment benefits" were recognized as of December 31, 2015. The decrease in interest rates during the first quarter of 2016 _different depending on the type of obligation_ would have resulted in an increase in the value of liabilities through equity, according to sensitivity parameters already disclosed in the Consolidated Financial Statements as at December 31, 2015.
Where necessary, such evaluations will be updated in the Consolidated First Half Financial Report as at June 30, 2016.
5. In those cases in which the accounts did not fully reflect the reporting of items on an accrual-basis, such as certain administrative expenses, the accounting figures were supplemented by estimates based on the budget.
6. With reference to the ordinary contributions due for 2016 to the Single Resolution Fund, the relevant cost has been estimated on the basis of the information available as of March, 31 2016. Similarly, this interim report does not reflect the effects of the law _D.L._ dated May, 3 2016, n. 59 _including those related to deferred tax assets_.
7. Scope of consolidation: in the first three months of 2016 the following changes occurred in the scope of consolidation:
a. the number of the wholly-owned subsidiaries changed from 713 at the end of 2015 to 696 in March 2016 _2 entries and 19 exits_ recording a decrease by 17 _the exits depend on disposals and mergers with other Group’s entities_;
b. the number of the entities consolidated using the equity method changed from 67 at the end of 2015 to 68 in March 2016.
8. Non-current assets and asset groups held for disposal: in the Balance Sheet as at March 31, 2016 the main reclassified assets based on the IFRS 5 accounting principle, as non-current assets and asset disposal groups refer to:
a. regarding the individual assets and liabilities held for sale:
i. subsidiary Bankhaus Neelmeyer AG;
ii. properties held by some Group entities;
b. regarding the data relating to group of assets held for sale and associated liabilities, the following companies, already reported as held for sale in the Consolidated Financial Statements as at December 31, 2015:
i. the companies of the Ukrainian Group _Public Joint Stock Company Ukrsotsbank, Private Joint Stock Company Ferrotrade Internartional, LLC Ukrsotsbud, LTD SI&C AMC Ukrsots Real Estate_;
ii. the companies of Immobilien Holding Group _Austria_.
9. All intercompany transactions of a material amount were eliminated _both balance sheet and income statement figures_. All unreconciled amounts were posted to other assets or liabilities or to net other income/expenses, if not related to interests or commissions.
10. This Consolidated Interim Report - Press Release is not audited by the External Auditors.
19It should be noted that this decision does not imply the publication of the disclosure in future by UniCredit Group.19 | P a g e
Declaration by the Manager charged with preparing the financial reports The undersigned, Marina Natale, in her capacity as the Manager charged with preparing UniCredit S.p.A.’s financial reports
DECLARES
That, pursuant to Article 154 bis, paragraph 2, of the “Consolidated Law on Financial Intermediation" the
information disclosed in this document corresponds to the accounting documents, books and records.
Milan, May 10 2016
Manager charged with preparing the financial reports
Investor Relations:
Tel.+39-02-88624324; e-mail: investorrelations@unicredit.eu
Media Relations:
Tel.+39-02-88623569; e-mail: mediarelations@unicredit.eu
UNICREDIT 1Q16 GROUP RESULTS – DETAILS OF CONFERENCE CALL
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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
20 | P a g e
OTHER DOCUMENTATION
In addition to the tables in this document, further information can be found in the Divisional Database available at the following address:
https://www.unicreditgroup.eu/en/investors/group-results.html. The Divisional Database contains specifically:
A. CONSOLIDATED ACCOUNTS: 1. Consolidated income statement, 2. Consolidated balance sheet, 3. Group shareholders’ equity, 4. Core
Bank, 5. Asset quality Core Bank, 6. Asset quality country breakdown, 7. Asset quality Non-Core, 8. Capital position.
B. CONTRIBUTION OF DIVISIONS TO GROUP RESULTS: 1. Commercial Bank Italy, 2. Commercial Bank Germany, 3. Commercial Bank Austria,
4. CIB, 5. CIB Managerial Data, 6. Poland, 7. Asset Management, 8. Asset Gathering, 9. GBS – CC – Elisions , 10. CEE Division, 11. CEE
countries, 12. Non-Core. | | |
+0,17% +0,74gr
-0,30% -1,19gr
