Fixed Income Presentation. Milan May 12 th, 2017

Transcription

1 Fixed Income Presentation Milan May 12 th, 2017

2 Disclaimer This Presentation 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 Presentation are provided as at the date hereof and are subject to change without notice. Neither this Presentation 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 Presentation 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 Presentation 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) Francesco Giordano, in his capacity as manager responsible for the preparation of the Company s financial reports declares that the accounting information contained in this Presentation reflects the UniCredit Group s documented results, financial accounts and accounting records. This Presentation has been prepared on a voluntary basis since the financial disclosure additional to the half-year and annual ones is no longer compulsory pursuant to law 25/2016 in application of Directive 2013/50/EU, in order to grant continuity with the previous quarterly presentations. The UniCredit Group is therefore not bound to prepare similar presentations in the future, unless where provided by law. 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 Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it. 2

3 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 3

4 UniCredit, a G-SIBs with a strong capitalisation and a solid recurring profitability thanks to cost and risk levers firmly under control Significantly strengthened capital position through asset disposals and successful 13 bn capital increase Well-diversified franchise in Western Europe and CEE maximizing commercial banking value Active balance sheet de-risking resulting in higher coverage ratio to address asset quality legacy. New coverage translates into a Non Core credit portfolio positioned to sell Cost discipline and efficiency measures to significantly reduce cost income ratio and transform operating model/business processes to a sustainable lower cost structure Lean but steering corporate center to drive Group-wide performance and ensure accountability 4

5 UniCredit: a Pan European Commercial Bank with inherent competitive advantages Commercial Banking model delivering unique Western, Central and Eastern European network to extensive Retail and Corporate client franchise 25 million clients (1) 78% revenues from Commercial Banking (2) "One Bank" business model replicated across full network, driving synergies and streamlined operations Commercial Banks with leadership position (3) in 12 out of 14 countries (4) Low risk profile business model benefiting from diversification and a more stable national/regulatory environment 94% revenues in EU 57% outside Italy (5) CIB plugged into Commercial Banking, enabling cross-selling and synergies across business lines and countries 3 bn joint CIB-Commercial Banking revenues (6) 1. Data as of 1Q17, includes 100% clients in Turkey 2. Data as of 1Q17, CBK Italy, CBK Germany, CBK Austria, CEE. 3. Data as of FY16, ranking between #1 and #5 of market share in terms of total assets according to local accounting standard 4. Italy, Germany, Austria, Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herz., Serbia, Russia, Romania, Bulgaria, Turkey 5. Data as of 1Q17 based on regional view Data as of FY16 Includes revenues on GTB, ECM, DCM, M&A, Markets products from Commercial Banking clients and structured financing products from Corporate clients. Sources: for total assets, central bank statistics, if available, or local company reports

6 Strong competitive advantage across countries and products Italy Strong local Commercial Bank # clients, m (1) 8.8 Rank by assets in Europe (2) Germany Austria CEE Revenues by geography (4) Austria CEE Germany 21% 9% 43% Italy 27% 2 "Go to" bank for European "Mittelstand" Corporates Loans to corporate in EU zone, bn (3) Peer 1 UniCredit Peer 2 Peer 3 Peer 4 Peer 5 EMEA ranking (5) Best in class CIB products provider EMEA Bonds in Euro by # of transactions (6) 1 Syndicated Loans in Italy (7) Syndicated Loans in Germany (7) Syndicated Loans in Austria (7) Awards European Trade Finance Power House (8) 5 Stars for Cash Management in Western Europe and CEE (9) Data as of 1Q17, includes 100% clients on Turkey 2. Data as of FY16, for Austria domestic assets as of end of 2015 on local GAAP (source OeNB), for Germany only private banks; for CEE compared to Erste, KBC, Intesa Sanpaolo, OTP, RBI, Société Générale (data as of 2015). 3. Data as of 1Q17; peers includes: BNP Paribas, Deutsche Bank, Intesa Sanpaolo, Santander, Société Générale. 4. Data as of 1Q17 based on Regional view. 5. Data from league tables as of 1Q Source: Dealogic Analytics, per 3 April Period: 1 Jan 31 March Source: Dealogic Analytics, per 3 April Period: 1 Jan 31 March Source: EuroMoney Trade Finance Survey Source: EuroMoney (

7 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 7

8 Net profit 907m in 1Q17, up by 40.6% Y/Y thanks to resilient recurring revenues and cost excellence Resilient recurring revenues thanks to strong business focus: net interest at 2,564 m, in line with projections, and fees at 1,481 m (+4.5% Y/Y) Operating costs reduced by 3% Y/Y thanks to Transform 2019 actions LLP down by 11.8% Y/Y at 670 m with cost of risk at 60bp (-11.5% Y/Y) Focus on Non Core de-risking, with NPE further down by 1.8% Q/Q, confirming positive AQ trends Net profit at 907 m, up by 40.6% Y/Y adjusted, with gross operating profit +14.6% Y/Y and net operating profit +36.1% Y/Y Solid CET1 ratio at 11.45% fully loaded after successful 13 bn right issues, above 12% considering Pioneer & Pekao disposals and RWA dynamics expected in 2017 Transform 2019 execution on track, delivering tangible results 8

9 Key financial figures RoTE at 7% at Capital Markets Day perimeter in 1Q17 (9.4% stated) Total revenues Operating expenses Loan loss provisions Net profit Fully loaded CET1 ratio (2) RWA transitional (2), bn Loans, excl. repos Gross NPE RoTE (3) Cost income Key Figures Group 4Q16 Delta % Delta % 1Q16 adj. 4Q16 adj. Delta Q/Q Delta Y/Y adj. (1) 1Q17 Q/Q Y/Y 4,674 4,327 4, % +3.4% -2,976-2,930-2, % -3.0% , % -11.8% n.m % 10.45% 11.15% 11.45% +0.3pp +1.0pp % -2.3% 421, , , % -0.4% 77,064 56,342 55, % -28.2% 6.1% n.m 9.4% n.m. +3.4pp 63.7% 67.7% 59.7% -8.0pp -3.9pp 9 Cost of risk (bp) bp -8bp 1. 4Q16 adj. for non recurring items of Transform Stated figures: Revenues: 4.2bn, Costs 3.6bn, LLP 9.6bn, Net loss -13.6bn. 1Q16 adj. for restructuring charges. C/I 4Q16 also adj. for temporary effect of IFRS5 at 64.5%. 2. 1Q16 CET1 ratio FL PF as published in 2Q16 results. CET1 and RWA 4Q16 PF for cap. increase. CET1 above 12% considering disposals of Pioneer & Pekao (c.1.5p.p.) and RWA dynamics expected in Q17 figures include contribution to net profit from Pioneer & Pekao and exclude the full benefit of capital increase (given avg calculation) and M&A deal on tangible equity. RoTE at 7% at CMD perimeter.

10 Group 1Q17 net profit at 907 m, with CIB, CEE and CBK Italy top contributors Stated net profit, m Net profit divisional breakdown, m CBK Italy 317 CBK Germany 114 RoAC 12.8% 9.3% -13,558 CBK Austria % RoTE 1Q16 4Q16 1Q17 3.8% n.m. 9.4% 7% at CMD perimeter CEE CIB % 15.4% Fineco % Net profit progressed Y/Y, underpinned by strong fee generation, some large client driven transactions in markets and lower LLP ROTE at 7% in 1Q17 at Capital Markets Day (CMD) perimeter, benefitting from seasonally positive performance in 1Q17 Group CC -104 Non Core -206 Group 907 n.m. n.m. 10

11 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 11

12 Progress Transform 2019 (1/2) 5 Strategic Pillars Achieved 2019 Target STRENGTHEN AND OPTIMIZE CAPITAL Bold actions taken: disposals of Pioneer, Pekao and 30% of Fineco 13bn rights issue successfully executed Solid CET1 ratio at 11.45% fully loaded after successful 13 bn capital increase, above 12% considering Pioneer & Pekao disposals and RWA dynamics expected in 2017 CET1 ratio >12.5% IMPROVE ASSET QUALITY Decisive actions to address Italian legacy issues Strengthened coverage ratio Further tightened risk discipline Gross NPE reduced to 55.3 bn, with coverage ratio increased to 56.3% (1) in 1Q17 Improved expect loss on performing stock, from 0.43% to 0.39% in 1Q17 Operational plan on NPE finalized and consistent with both Transform 2019 and ECB guidelines Disposals of 0.3 bn NPE portfolios in 1Q17 at Group level (additional 0.4bn in 2Q17, already classified as held for sale in 1Q17) (2) Net NPE ratio 4% NPE Coverage >54% Cost of Risk 49bps 1. Gross NPE at 24.4bn in the Group excl. Non Core in 1Q17 with a coverage ratio of 55.2%. Gross NPE at 30.9bn in the Non Core in 1Q17 with a coverage ratio of 57.2%. 2. 1Q17 disposals of NPE at 0.2bn in the Group excl. Non Core (additional 0.4bn in 2Q17, already classified held for sale in 1Q17 ) and 0.1bn in the Non Core. Additional 0.5bn disposals of Non Core NPE already signed in 2Q17. 12

13 Progress Transform 2019 (2/2) 5 Strategic Pillars Achieved 2019 Target TRANSFORM OPERATING MODEL Transformation of operating model to a sustainable lower cost structure Improve customer focus, services & products 1.6 bn IT investments (1) to support business transformation Reduced ~1,900 FTEs in 1Q17: decrease of ~4,500 since December 2015 (32% of target) Reduction of FTEs in support functions and operations by 7%, vs. target of 19% in 2019 Branch closures in Western Europe on track with 36% of closures achieved out of target of bn net cost savings by 2019 C/I ratio <52% 944 branch reduction in Western Europe MAXIMIZE COMMERCIAL BANK VALUE ADOPT LEAN BUT STEERING CENTER Leverage on CIB leadership Increase CEE client penetration Enhance cross-selling across business lines and countries Effective steering Group Corporate Center KPIs to drive performance and accountability Leaner support functions and transparent cost allocation Rank #1 in EMEA Bonds in Euro by number of transactions (2) Simplification of commercial network implemented supported by 500 transformation agents Strong focus on multichannel approach New holding organization structure set up (4) Tangible results in 1Q17, with FTEs down by 5.6% Y/Y and costs down by 10.6% Y/Y Additional 363 m joint CIB-Commercial Banking revenues (3) 856 bn TFA Weight of Group Corporate Center on total costs from 5.1% to 2.9% by Excluding 0.7 bn investments to fulfill regulatory demand in Source: Dealogic Analytics, per 3 April Period: 1 Jan 31 March Includes revenues on GTB, ECM, DCM, M&A, Markets products from Commercial Banking clients and structured financing products from Corporate clients. 4. Group Risk Management, Planning, Finance & Administration, Human Capital, Group 13 Identity & Communication, Legal, Compliance, Group Institutional & Regulatory Affairs, Strategy and M&A.

14 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 14

15 Group Solid CET1 ratio FL at 11.45% after successful 13 bn capital increase, above 12% considering Pioneer & Pekao disposals and RWA dynamics expected in 2017 Fully loaded Common Equity Tier 1 ratio 361bp 11.15% +23bp +14bp 11.45% -6bp -1bp 320bp 7.54% 41bp RWA fully loaded Dec Capital increase (1) Dec-16 post cap. incr Net profit 1Q17 20% dividends accrual & coupons (2) Other (3) RWA dynamics Mar CET 1 ratio up by 361bp thanks to the successful completion of 13 bn capital increase concluded in March Positive contribution of earning generation and RWA dynamics Dividend accrual for full year 2017 will be based on payout ratio of 20% on normalized earnings (excluding disposals) 1. Including the benefit of capital increase and of the reversal of thresholds related to financial participations and Deferred Tax Assets (41bp); Thresholds effect on CET1 ratio transitional is lower due to phase-in benefit. 2. Coupons on Cashes and AT1 instruments paid in 1Q17 equal to 65.9m. 3. DBO: +1bp, FX: +5bp, AFS: -8bp and other: +1bp 15

16 Group Transitional ratios well above MDA after successful 13 bn capital increase, above 12% considering Pioneer & Pekao disposals and RWA dynamics expected in 2017 CET1 transitional Tier 1 transitional Total capital transitional 2016 Basel 3 phase-in 60%, 2017 Basel 3 phase-in 80% +0.2pp +0.2pp +0.1pp 11.49% (1) 11.71% 12.43% (1) 12.65% 15.08% (1) 15.20% 8.77% MDA 1Q % MDA 1Q % MDA 1Q % 9.04% 11.66% Dec-16 Mar-17 Dec-16 Mar-17 Dec-16 Mar-17 32bn 45bn 35bn 49bn 45bn 59bn Capital buffer vs MDA requirements is c. 240bp as of Mar-17 Note: Phase-in of net liability related to Defined Benefit Obligation at 40% in 2016 and 60% in Including the benefit of capital increase and of the reversal of thresholds related to financial participations and Deferred Tax Assets. In particular, in 4Q16 was 3.34% for CET1 transitional, 3.39% for Tier 1 transitional and 3.42% for total capital transitional.

17 CET1 Transitional capital buffer vs MDA requirements is expected to be above 300bps by end CET1 FL capital buffer vs MDA requirements to be above 200bps by end 2019 (assuming constant P2R) CET1 ratio requirements T1 requirements (2) Total Capital requirements Target >12.5% Target >14.0% Target >17.1% MDA level Regulatory buffers (1) Pillar 2 Requirement (P2R) Pillar 2 Guidance (P2G) 1.77% 8.77% Pillar 2 Guidance (P2G) 3.53% 2.50% 2.50% 10.53% Regulatory buffers (1) Pillar 2 Requirement (P2R) T % 1.77% 12.03% 3.53% 2.50% 2.50% 1.50% 1.50% MDA level Regulatory buffers (1) Pillar 2 Requirement (P2R) Pillar 1 T2 T % 1.77% 14.03% 3.53% 2.50% 2.50% 2.00% 2.00% 1.50% 1.50% MDA level Pillar 1 CET1 4.50% 4.50% Pillar 1 CET1 4.50% 4.50% CET1 4.50% 4.50% 1Q17 CET1r transitional requirement 2019 CET1r FL requirement (assuming constant P2R) 1Q17 T1 transitional requirement 2019 T1 FL requirement (assuming constant P2R) 1Q17 TC transitional requirement 2019 TC FL requirement (assuming constant P2R) 1. Regulatory buffers include (i) as of 1Q17, Capital Conservation Buffer (1.25%), G-SIBs Buffer (0.50%) and Countercyclical Buffer (0.02%); (ii) as of 2019 Capital Conservation Buffer (2.50%), G-SIBs Buffer (1.0%) and Countercyclical Buffer (0.03%) which is estimated on the basis of exposures as of March 2017 and of buffers to be applied starting from June 2017 and set by national authorities. 2. In case of 17 a Gap on AT1 1.5% minimum requirement, this can be fulfilled through the P2G, as the P2G is only on top of CET1 requirement and not on top of T1 & Total Capital requirements.

18 Solid CET1 fully loaded position among G-SIBs. Target leverage ratio at 5.6% in 2019 Total Capital, Total Assets & CET1 Fully Loaded (1)(2) as of Mar-17, bn /bn Total Capital Total Assets Q17 4Q Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 UCG Peer 9 Peer 10 Peer , ,401 1, ,352 2,198 2,437 FL Basel 3 Leverage Ratio (1) as of Mar-17, % 1Q17 4Q16 EU avg. 4.9% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 UCG Peer 6 Peer 7 Peer 8 Peer 9 UCG 2019 Peer 10 Peer Leverage Ratio FL where available. Peers: BBVA, BNP, Commerzbank, CASA, DB, HSBC, ISP, ING Bank, Nordea, SAN, SG. 2. CET1 FL calculated as FL CET1 Ratio * RWA.

19 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 19

20 Well diversified and centrally coordinated funding and liquidity profile UniCredit SpA is operating as the Group Holding as well as the Italian operating bank: TLAC issuer assuming Single-Point-of-Entry (SPE) Coordinated Group-wide funding and liquidity management to optimize market access and funding costs Diversified by geography and funding sources Western Europe CEE Banks (11 CEE countries (1) ) Local funding and self-sufficiency principle is part of overall Group funding plan while leveraging on local knowledge (well established issuance platform in Germany e.g. Covered Bond/Pfandbriefe) Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Russia, Slovakia, Slovenia, Serbia and Turkey.

21 Strong Group liquidity position 1Q17 strong liquidity buffer bn Additional eligible assets available within 12 months (1) Cash and Deposits with Central Banks Already compliant with key liquidity ratios LCR NSFR (2) >100% >100% Unencumbered assets (immediately available) bn liquid assets immediately available, well above 100% of wholesale funding maturing in 1 year UniCredit S.p.A. LCR and NSFR >100% 1. Unencumbered assets are represented by all the assets immediately available to be used with Central Banks. Additional eligible assets (available within 12 months) consist of all the other assets eligible within 1 year time. 2. As of 31 Dec'16. 21

22 Group Funding Plan Group Funding Plan Strategy by Product bn, to be issued over plan period by Country Very conservative funding plan given the current regulatory uncertainty to mitigate any execution risk TLAC funding plan (ex. AT1) AT1 Other senior bonds Covered Supranational Other wholesale M/L term Total funding plan (2) Italy Germany Austria CEE (1) 78.7bn 42.8% 33.6% 4.0% 19.6% Group ML Term funding plan envisages cumulated bond issuances of c. 79 bn with a carefully selected array of debt and capital instruments The funding plan has been put in place to ensure that TLAC and MREL requirements are respected over the next three years The recent set-up of a $30 bn 144a / RegS Global MTN combined Program will allow the bank to further diversify its funding sources and tap investors globally Including Turkey at 100% bn AT1 planned of which 500 m AT1 already executed in December 2016.

23 2017 Medium-Long Term Funding Plan (1/2) 2017 M/L term Funding plan M/L term run offs by region (1) TLTROII split by country Italy Germany Austria CEE (2) 26.9bn 49.8% 28.2% 3.5% 18.5% 2017 (Planned) Italy Germany Austria CEE (2) 6.4bn 43.2% 39.1% 0.9% 16.8% 2017 (Realized) (3) Italy Germany Austria CEE (2) 33.8bn 59.0% 17.1% 7.5% 16.3% bn 51.8% 25.3% 11.2% 11.6% 2018 As of April 28 th, c. 24% or c. 6 bn of the 2017 Group Funding Plan is executed 13.6bn 47.0% 25.0% 18.4% % Germany 24.6% Austria CEE 7.8% 1.9% 65.7% Italy Taking also advantage of the last additional TLTROII take-up of c bn during the recent auction in Mar-17, the Group is leveraging on 51.2 bn of TLTROII Inter-company funding not included. 2. Including Turkey at 100%. 3. As of 28 th of April 2017.

24 2017 Medium-Long Term Funding Plan (2/2) 2017 M/L term Funding plan by product M/L term run offs by product (3) Bank Capital Bonds Senior Bonds Secured Funding (1) 26.9bn 33.8bn 3.2 Bank Capital Bonds Senior Bonds Secured Funding (1) bn bn (Planned) 6.4bn (Realized) (2) Secured funding: Public Sector & Mortgage Covered Bonds and Supranational Funding. 2. As of 28 th of April Inter-company funding not included.

25 UniCredit SpA has successfully issued its inaugural $2 bn Senior Unsecured Dual-Tranche Apr-2022 & Apr-2027 Investor breakdown Highlights By Investor Type Insurance/PF Others SAS 1% Banks/PB 5% 6% 4% Apr-2022 By Geography Asia&ME Others 3% 8% Europe (1) 37% 52% N. America Inaugural issue under the new $30 bn 144a / RegS Global MTN combined Program On Apr-17, UC successfully issued $1,250 mn with 3.750% semi annual coupon rate at 5yr and $750 mn with 4.625% semi annual coupon rate at 10yr Well diversified geographical distribution across both tranches with high quality accounts 84.0% 84% Asset managers The order book peaked above $6 bn with more than 200 investors Others Corporate Insurance/PF 3% 14% 2% SAS 3% Banks/PB 4% 74% Apr-2027 Asset managers Asia&ME Others 1% 14% Europe (2) 26% 59% N. America Allocation: 5-year tranche was mainly allocated to North America (52%), UK & Ireland (14%), Asia and ME (8%) 10-year tranche was mainly allocated to North America (59%), Asia and ME (14%), UK & Ireland (10%) Both the 5-year and the 10-year tranche were mainly allocated to high quality Asset Managers, Insurance & Pension Funds, Banks and Private Banks 1. Italy 10%, Switzerland 4%, France 3%, Nordics 2%, UK/Ireland 14% and Germany/Austria 4%. 2. Italy 2%, Switzerland 2%, France 1%, Nordics 5%, UK/Ireland 10%, Germany/Austria 1% and Benelux 5% 25

26 TLAC (Pillar 1 MREL) issuance plan (1/2) Over 17% TCR with almost 70 bn of bank capital instruments for 2019 Funding plan based on conservative case - TLAC compliant 2019 assumed TLAC requirements (1) (Pillar 1 MREL) TLAC building blocks Total issuance over the Plan 19.50% (2) 1.0% G-SIBs 2.5% Capital conservation buffer 2.5% Senior Bond exemption 17.0% TLAC ratio + buffers Old Senior outst. TLAC eligible ( 5.6 bn) Senior bond Funding Plan Not part of the issuance plan 4.5 bn >23.0% 1.4% 1.1% 2.5% of RWA met with senior bonds 8% TLAC eligible instruments 2.0% Tier % Subordination requirements Senior non preferred Funding Plan Capital ratio Tier bn 5.0 bn 3.3% >17.1% 3.1% 1.5% AT1 Tier 1 ratio >14.0% 4.5% CET1 AT1 CET1 3.5 bn (3) 1.5% >12.5% 1. UniCredit view on current regulations which may be subject to change. Assuming UniCredit as Single Point of Entry (SPE) and all the TLAC instruments have to be issued by UniCredit S.p.A.; % by Jan Assuming Counter-Cyclical Buffer set at 0%. Plan RWAs bn vs. 362 bn as of 9m16 presented during CMD bn AT1 planned of which 500m AT1 already executed in Dec

27 TLAC (Pillar 1 MREL) issuance plan (2/2) Over the Transform 2019, UniCredit envisages to issue 8.5 bn of capital instruments, of which 3.5 bn Additional Tier 1 and 5.0 bn Tier 2 The 3.5 bn Additional Tier 1 ( 500 mn AT1 already executed in December 2016) will be issued in order to fill the 1.5% Additional Tier 1 bucket. UCG envisages to issue c. 1.0 bn each year during the Transform 2019 plan The 5.0 bn Tier 2 will be issued to reach the 3.0% Tier 2 bucket, above the 2.0% minimum requirement, needed to achieve and preserve 17% Total Capital Requirement (TCR) for TLAC/MREL subordination requirement. UCG envisages to issue c. 1.5/2.0 bn each year during the Transform 2019 plan The BRRD II is currently being amended and expected to be approved by the EU Parliament by mid Delays in the EC s common harmonisation of creditor hierarchy could hamper UCG s ability to raise Senior Non-Preferred in the near future. In that context, UCG will continue to explore alternative solutions and at the same time to keep issuing bank capital instruments and old style seniors so as to be compliant with TLAC/MREL requirement 27

28 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 28

29 Concluding remarks Resilient recurrent revenues thanks to strong business focus, with net interest stabilizing, strong trading profit and improved fees Operating costs reduction confirmed thanks to Transform 2019 actions Cost of risk at 60bp, confirming target for 2017 at 65bp Non Core run down further continued with NPE down, confirming positive asset quality trends Net profit at 907 m, up by 40.6% Y/Y adjusted as a result of improved operating profitability Solid CET1 ratio at 11.45% fully loaded after successful 13bn right issue, above 12% considering Pioneer & Pekao disposals and RWA dynamics expected in 2017 Transform 2019 target confirmed 29

30 Agenda 1 UniCredit at a glance 2 1Q17 results update 3 Transform 2019 update 4 Capital position 5 Funding & Liquidity 6 Concluding remarks 7 Annex 30

31 Ratings Overview SpA BBB-/Stable/A3 (1) Baa1/Stable/P2 (1) BBB/Stable/F2 (1) (bbb-) (2) (ba1) (2) (bbb) (2) The successful completion of the rights issue and evidence of execution on cost savings and the disposal of nonperforming assets could result in an improvement in its stand-alone credit profile over the next months...very large capital raising coupled with a reduction in problem loans and increased provisioning coverage places the bank in a better position to meet the challenges of an adverse operating environment in Italy... the planned recapitalisation, sale of non-performing loans and cost-cutting measures, if achieved, are all positive for creditors Issuance Ratings Issuance Ratings Issuance Ratings UC SpA T2 AT1 OBGI (Ital CB) (5) OBGII (Ital CB) (6) BB nr A nr UC SpA T2 AT1 OBGI (Ital CB) (5) OBGII (Ital CB) (6) Ba1 nr Aa2 nr UC SpA T2 AT1 OBGI (Ital CB) (5) OBGII (Ital CB) (6) BBB- B+ AA AA Italy BBB-/Stable/A3 (1) Baa2/Negative/P2 (1) BBB/Stable/F2 (1) BBB/Develop (3) /A2 (1) A2 (4) /Stable/P1 (1) BBB+/Negative/F2 (1) (bbb+) (2) (baa2) (2) (bbb+) (2) BBB/Negative/A2 (1) Baa1/Stable/P2 (1) BBB+/Negative/F2 (1) (bbb) (2) (baa3) (2) (bbb+) (2) 1. Order: Long-Term Senior Unsecured Debt Rating / Outlook or Watch-Review / Short-Term Rating / Stable = Stable Outlook; 2. Stand-Alone Rating; 3. Outlook "developing" due to (i) uncertainties around resolution process and (ii) related questions about sustainability of ALAC (Additional Loss-Absorbing Capacity) buffer; 4. Deposit rating shown, while Senior Debt at 'Baa1/Stable/P1; 5. Soft Bullet; Conditional Pass Through

32 Italy Macro Outlook 2016 positive GDP growth, Deficit and Debt to GDP ratio under control Key Highlights GDP Growth, % Debt/GDP, % Third largest economy in the eurozone; after Germany and France Positive GDP Growth: +1.0% in 2016; the recovery is ongoing, although it remains moderate Deficit/GDP Ratio under control: in 2016 it stood at -2.4% and is expected to slow to -2.0% in Public Debt/GDP ratio at 132.6% in It is expected to broadly stabilize at the current level over a two year forecast horizon The public debt needs to be viewed together with one of the lowest Non-financial private sector debt in Europe at 118% of GDP Italy primary surplus (1.7% of GDP 2017 estimated) is one of the best amongst European countries Low foreign debt: c. 60% of Italian sovereign bonds are held by domestic investors (1) Unemployment rate at 11.7% only slightly above European average 10% and well below Spain (19.6%) Trade Balance Rebalancing: strong trade balance surplus since GE FR SP Unemployment rate, % GE FR 17.5 IT IT SP GE FR IT SP Italian trade balance, bn Source: Bank of Italy, FY16. 32

33 UniCredit has been placed into 1.0% bucket of G-SIBs List Bucket G-SIBs 3.5% (Empty) 2.5% Citigroup, JP Morgan Chase 2.0% Bank of America, BNP Paribas, Deutsche Bank, HSBC 1.5% Barclays, Credit Suisse, Goldman Sachs, Industrial and Commercial Bank of China Limited, Mitsubishi UFJ FG, Wells Fargo 1.0% Agricultural Bank of China, Bank of China, Bank of New York Mellon, China Construction Bank, Group BPCE, Group Crédit Agricole, ING Bank, Mizuho FG, Morgan Stanley Nordea, RBS, Santander, Societe Generale, Standard Chartered, State Street, Sumitomo Mitsui FG, UniCredit, UBS 33 Note: G-SIBs as of November 2016 allocated to buckets corresponding to required levels of additional capital buffers

34 Group excl. Non Core Asset quality further improved in the quarter with lower NPE, improved NPE ratios and strengthened coverage ratios Net NPE Non performing exposures, bn % % bn disposals in 1Q17 Additional 0.4bn in 2Q17, already classified held for sale Net bad Loans Coverage ratio o.w. Gross bad loans, bn Mar % Dec % Mar % 67.9% 69.8% Gross NPE ratio Net NPE ratio Coverage ratio Mar-16 Dec-16 Mar % 5.6% 5.4% 3.1% 2.6% 2.5% 49.1% 54.7% 55.2% Net UTP Coverage ratio o.w. Gross unlikely to pay, bn Mar % Dec % Mar % 41.6% 41.6% Gross NPE including gross bad loans, gross unlikely-to-pay and gross Past due. Past due at 1.17bn in 1Q17 (-59m Q/Q and -264m Y/Y).

35 Non Core NPE continued to reduce Q/Q mainly thanks to improving flows. Coverage ratio up by 80bp Q/Q to 57.2% Non performing exposures (1), bn o.w. Gross bad loans, bn -49.7% Net NPE Mar % Dec % Mar bn disposals in 1Q17 Net bad loans Coverage ratio Mar Dec-16 o.w. Gross unlikely to pay, bn -8.9% -0.5% Mar % 64.0% 64.6% Gross NPE ratio Net NPE ratio Coverage ratio 84.9% 84.8% 85.0% 73.5% 71.7% 71.7% 52.5% 56.4% 57.2% Net UTP Coverage ratio -4.0% Mar-16 Dec-16 Mar % 44.7% 45.7% 35 1.Gross NPE including gross bad loans, gross unlikely-to-pay and gross Past due. Past due at 229m in 1Q17 (+26m Q/Q and -522m Y/Y).

36 Asset quality across all divisions Group, 1Q17 CBK Italy CBK Germany CBK Austria CIB CEE Non Core Gross Loans, bn 486, ,634 84,181 49, ,410 65,127 36,360 Gross NPE ratio, % Bad loans 11.4% 7.0% 2.6% 4.6% 3.7% 9.4% 85.0% ratio, % 6.4% 3.4% 2.1% 2.3% 1.7% 4.0% 52.2% UTP ratio, % 4.7% 3.2% 0.4% 2.3% 2.0% 5.0% 32.3% Past due ratio, % 0.3% 0.5% 0.0% 0.1% 0.0% 0.5% 0.6% NPE coverage, % 56.3% 53.5% 50.8% 59.8% 53.4% 58.4% 57.2% Bad loans coverage, % 66.6% 69.6% 56.9% 84.9% 62.8% 79.0% 64.6% UTP coverage, % 43.7% 39.9% 24.4% 35.7% 45.4% 44.1% 45.7% 36 Note: total gross loans including repos and intercompanies on divisional data.