UniCredit: 3Q21 & 9M21 Group Results. Continued strong commercial performance supports profitability

Further progress in simplifying and empowering the organisation, building momentum in executing on our strategic levers

3Q21 underlying net profit ^[1] of €1.1 billion, with revenues at €4.4 billion, and costs at €2.4 billion.

9M21 gross operating profit at €6.2 billion up 11.5 per cent 9M/9M and underlying RoTE^[2] at 7.9 per cent

Confirmed strong capital and liquidity position, with 3Q21 fully loaded CET1 ratio at 15.5 per cent ^[3] and a fully loaded CET1 MDA buffer at 647 basis points ^[4]

FY21 total revenues guidance updated to circa €17.5 billion and costs in line with previous guidance confirmed at €9.9 billion

FY21 underlying Cost of Risk ^[5] guidance further improved to circa 30 basis points. FY21 underlying net profit guidance increased to above €3.7 billion

On 27 October 2021, the Board of Directors of UniCredit S.p.A. ("UniCredit" or "the Group") approved the 3Q21 and 9M21 Consolidated Results as at 30 September 2021.

The Bank's ambition remains to deliver sustainable returns above the cost of equity over the cycle, by optimising the combination of risk-adjusted revenue growth, operational efficiency and capital efficiency. Simplification, client centricity and digitalisation remain our three guiding principles. The new strategic plan will be presented at our virtual Strategy Day on 09 December 2021.

In 3Q21 underlying net profit¹ reached €1.1 billion, up 0.5 per cent quarter on quarter, and €3.1 billion in the first nine months, equivalent to an underlying 9M21 RoTE² of 7.9 per cent. The excellent commercial performance, reflecting the strengths of our unique pan-European franchise, led to €4.4 billion of revenues in 3Q21. Fees delivered another very robust result, despite the third quarter being usually seasonally weak, and NII ⁶ had a positive quarter sequentially.

Year on year costs were largely stable at €2.4 billion in 3Q21 due to a continued focus on cost efficiency and strong cost discipline with cost/income ratio at 55.2 per cent.

Stated cost of risk stood at 27 basis points in 3Q21, thanks to better asset quality and limited impact from regulatory headwinds ⁷.

Asset quality improved despite Covid-19, with Group gross NPE ratio at 4.5 per cent. The fully loaded CET1 ratio stood at 15.5 per cent³ at the end of the quarter, with a fully loaded CET1 MDA buffer at 647 basis points⁴. Tangible equity stands at €53.4 billion increasing 2.0 per cent quarter on quarter mainly thanks to net profit.

FY21 total revenues guidance is updated to circa €17.5 billion and costs are in line with previous guidance confirmed at €9.9 billion. FY21 underlying Cost of Risk⁵ guidance further improved to circa 30 basis points. FY21 underlying net profit guidance increased to above €3.7 billion.

The key recent events include the following:

• Regulatory approval for the "Second Share Buy-Back Programme 2021" of €652 million
• Cancellation of the 17.4 million shares repurchased in the 1H21 "First Buy-Back Programme 2021", in accordance with the resolution passed at the shareholders' meeting on 15 April 2021
• Issuance of UniCredit Bank AG inaugural €500 million green mortgage covered bond
• UniCredit Ireland to be merged into UniCredit SpA as part of the strategy to streamline operations

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

"I am pleased to report a robust set of results for the third quarter, reflecting the strength of our franchise, supportive market conditions, increased client activity across all business lines and a powerful economic recovery, which is expected to moderate. We continue to execute on our three priorities - simplification, digitalisation and client centricity - which will form the core of UniCredit's new strategic plan to be unveiled on 09 December 2021, and will underpin our commitment to the long-term strength, stability and growth of the Group. Our liquidity and balance sheet remain strong, providing a solid foundation as we continue to unlock the full potential of UniCredit."

Notes:

1 Underlying net profit is the basis for the ordinary capital distribution policy. Underlying net profit normalised for 3Q21 one-offs (-€48 m). 

2 Based on underlying net profit.

3 CET1 fully loaded includes the deduction for the accrued cash components of ordinary capital distribution (30 per cent of underlying net profit). Indeed, ordinary capital distribution policy is equal to 50 per cent of underlying net profit, o/w max 30 per cent cash and min 20 per cent share buyback; however, since the authorisation for share buyback will be requested in 2022, the Own Funds deduction does not include the related amount.

4 MDA buffer is relevant for regulatory purposes only versus the CET1 ratio transitional. 3Q21 CET1 MDA transitional buffer at 711 bps. CET1 MDA requirements at 9.03 per cent in 3Q21.

5 Underlying CoR: defined as stated CoR excluding regulatory headwinds.

6 Net contribution from hedging strategy of non-maturity deposits in 3Q21 at €359.7 m, -€8.4 m Q/Q and +€4.7 m Y/Y.

7 Including new Definition of Default, where relevant.

Enquiries:

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e-mail: investorrelations@unicredit.eu

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