· Net profit attributable to the Group: €1,827 million, the best quarter in the history of
UniCredit: +6.8% YoY
· Strong growth in revenues (+9.4% YoY) thanks to the buoyant commissions (+10.7% Yo Y)
· EVA* of approximately €2 billion in the first six months of 2007, more than €1 billion
generated in the second quarter
· Cost/income ratio down to 49%, -5.2 pp YoY
· Assets under management by the Group reach €256 billion (+9.8% YoY)
· Core Tier 1 at 6.09%, an increase of 27 bp on year-end 2006
· Asset quality and the Group’s risk profile improve:
Ø Significant reduction in total net impaired loans (-€1.9 billion, -13.5% on year-end
2006)
Ø Incidence of net customer loans down by 51 bp (2.72% at June 2007 versus 3.23%
at December 2006)
Ø Coverage ratio of total net impaired loans increases by 4.3 pp (53.2% at June 2007
compared to 48.9% at December 2006)
Today the Board of Directors of UniCredito Italiano (UniCredit) has approved second quarter
2007** consolidated results which show a net profit that grew by 6.8% YoY to reach €1,827
million (mn), the best result in the Group’s history, despite the lower contribution of net
income from investments which in the second quarter 2006 included a contribution to net
income of €332 mn following the sale of Splitska.
In the first half 2007 the Group’s net profit rose to €3,607 mn, an increase of 16.6% YoY.
ROE*** in first half 2007 is 19.8% (compared to 19.0% in the first six months of 2006). EVAâ
generated in the semester is equal to more than €2 billion (bn) (€2,073 mn), +53% YoY.
The operating profit (€3,340 mn) rose significantly by approximately 21.8% YoY (+21.6%
YoY on a like-for-like foreign exchange and perimeter basis) in second quarter 2007, attributable to a positive contribution from all divisions (including Markets & Investment
Banking (MIB): +72.5% YoY, Retail: +23.4% YoY, Private & Asset Management: +19.2%
YoY and Corporate: +11.8% YoY) and the decidedly robust performance of the CEE area
(the Poland’s Markets rose by +22.3% at constant FX, while the Central Eastern Europe
(CEE) Division rose by +24.2% YoY at constant FX).
The Group’s operating income reached €6,547 mn, approximately +9.4% YoY (+9.8% YoY
on a like-for-like foreign exchange and perimeter basis), due to growth in both net interest
income (€3,513 mn, +9.4% YoY, +9.7% on a like-for-like foreign exchange and perimeter
basis) and net non-interest income (€3,034 mn, +9.4% YoY, approximately +10% on a likefor-
like foreign exchange and perimeter basis).
Net interest (€3,188 mn), forming part of net interest income, grew by 8.4% YoY (+8.8 % on
a like-for-like foreign exchange and perimeter basis) thanks primarily to a rise in the volumes
intermediated with customers and an increase in market rates, which favored the
remuneration of the investments in own funds. Customer rates, on both loans and deposits,
increased less than market rates which had a positive effect on deposit spreads and a
negative effect on loan spreads.
Net customer loans for the Group totaled €454.1 bn at June 2007 (+2.9% when compared
to December 2006).
The growth in the second quarter (+1.2%) was sustained by the Retail, Corporate and the
CEE Divisions, while the reduction in the non strategic assets allocated to the German
Corporate Centre continued. The positive trend in consumer credit (+23.8% YoY , +2.3% from
the beginning of the year) and leasing (+10.7% YoY, +14.3% in the first six months of 2007)
also continued.
Customer deposits, excluding securities, confirm the growth trend rising by 3% in the quarter
(+5.3% from the beginning of the year) to €303 bn, thanks to a significant contribution from
both Retail and Corporate.
Net commissions, equal to €2,334 mn rose by 10.7% YoY (+11.5% YoY on a like-for-like
foreign exchange and perimeter basis), a positive trend confirmed in the last quarter (+2.6%).
All the Divisions contributed significantly to the growth in commissions, particularly the MIB
(+35.2% YoY ) and CEE (+23.6% YoY ) Divisions. The trend in Asset Management (+16.8%
YoY) and Corporate (+9.8% YoY) was also good. The most dynamic components in this
category were fees linked to segregated accounts (+36%) and mutual funds (+19%).
Commissions in the first half rose by 8.7% YoY with important results from both segregated
accounts (+42%) and the placement of insuranc e products (19%). Overall commissions from
asset management rose 9.5%, benefiting from both an increase in volumes and solid recovery
in up-front and performance fees, which had dropped in the first quarter.
At the end of June 2007, in fact, volumes of the assets managed by the Group’s asset
management companies reached €256 bn, with a significant increase in the last twelve
months (+9.8%) and an increase of 2.4% in the quarter. Net inflows since the beginning of
the year were positive at €3.7 bn, thanks to the decisive contribution of the US (€3.3 billion )
and the other international markets where the Group is active. In Italy the Group
strengthened its market share by 23 bp in the second quarter reaching a market share of
15.66% at June 2007. The total financial assets of the Private Banking Area amount to
approximately €194 bn, up 3.5% on March 2007.
Net trading, hedging and fair value income (€559 mn, -0.9% YoY ) was influenced by the
fair value valuation of the Generali option that had a negative impact of €40 mn in second
quarter 2007 compared to a positive €42 mn in second quarter 2006. Net this effect, growth
would have amounted to 14.7% YoY primarily attributable to the sound performance of the
Markets & Investment Banking Division (€484 mn, approximately +33% YoY ).
Other net income totaled €141 mn, an increase of 40 mn YoY .
Operating costs (€3,207 mn, -1.1% YoY, -0.4% YoY on a like-for-like foreign exchange and
perimeter basis) benefited from new Italian legislation related to termination of employmentand the provisioning for pensions in Austria. Net the effects of these items, the costs grew by
approximately 7% YoY with an increase in staff costs (€1,817 mn) of 6.9% YoY primarily
due to the variable component linked to business results (in particular in the MIB, Asset
Management and Poland’s Markets Divisions). This trend was also impacted by the effects of
the significant expansion of the activities in selected Central Eastern European countries and
investments in the global business lines.
Other administrative costs (€1,171 mn) grew by 10.8% YoY (+11.2% on a like-for-like
foreign exchange and perimeter basis) due to the rapid and marked expansion of the CEE
Division network (particularly in Turkey, Hungary and Russia) and to the outsourcing of certain
back office functions.
Amortisation, depreciation and impairment losses on intangible and tangible assets
(€289 mn) dropped by 4.6% YoY (-4.4% on a like-for-like foreign exchange and perimeter
basis).
The cost/income ratio improved noticeably from 54.2% in second quarter 2006 to below
50% (49%) in second quarter 2007.
The provisions for risks and charges (€70 mn compared to €79 mn in second quarter
2006) are basically unchanged YoY, integration costs amounted to €19 mn versus €52 mn
in second quarter 2006.
As regards to the trend in asset quality, the improvement, begun at the end of 2005, in the
Group’s net impaired loans (€12,342 mn) continued with a further reduction of 13.5% vs
2006 particularly thanks to decided decline in restructured loans. The most significant
contributions were reported in Germany and Poland. The total impaired loans/net customer
loans ratio fell from 3.23% at the end of 2006 to 2.72% at June 2007.
The coverage ratio of total impaired loans improved by more than four percentage points
reaching 53.2% at June 2007 (compared to 48.9% at December 2006) and in terms of net
non performing loans the ratio rose from 61.5% at year-end 2006 to 63.6%, testimony to the
validity of the policies to improve risk control and coverage implemented by the Group,
particularly outside of domestic market.
Net income from investments amounted to €89 mn (compared to €449 mn in the same
period of the previous year). More in detail, while the second quarter 2006 included a capital
gain of €367 mn from the sale of Splitska, in the second quarter 2007 the only positive
relevant non-recurring item was the sale of HVB’s equity investment in Munich Re
(approximately €70 mm). On a like-for-like foreign exchange and perimeter basis (ex
Splitska), therefore, net income from investments grew by 15.3% YoY.
Income tax for the period, was 27.4% higher YoY at €808 mn, translating to a tax rate of
28.6%, an increase over 24.8% reported in second quarter 2006.
Net profit, therefore, amounted to €2,021 mn (+5.0% YoY ).
Minorities totaled €194 mn at the end of June 2007, compared to €230 mn in the same
period of 2006.
Net profit attributable to the Group totaled €1,827 mn, an increase of €116 mn (+6.8%)
when compared to second quarter 2006. The trend in the first two quarters of 2007 indicate
that the Group will exceed its year-end EPS target of 0.56 cents.
The Group’s portion of net equity amounted to €39,748 mn (38,468 mn at the end of
December 2006).
Core Tier 1 equaled 6.09%, an improvement of 27 bp on year-end 2006 (5.82%). The Total
Capital Ratio reached 10.48% at June 2007 (basically in line with December 2006).
At the end of June 2007, the Group’s organization consisted of a staff**** of 135,880 (-1,317
heads when compared to December 2006). This total is the result of a combination of
factors: on the one hand, the reduction in personnel following the outsourcing of several
functions (-3,121 heads) and the exit of companies from the Group (-1,585 heads), efficiencies in the Corporate Centre and in the GBS (-1,020 heads), in the CEE countries excluding Russia
and Turkey (-489 heads) and Retail (-26 heads); and on the other hand, an increase in
resources due to the inclusion of new companies in the perimeter of consolidation (+350
heads) along with growth initiatives (+1,453 heads) mainly in Russia, Turkey, Retail - Italy and
in leasing.
The Group’s network consists of 7,486 branches5 (+129 on December 2006).
UniCredit announces that Bank Austria Creditanstalt (BA-CA) has finalized the acquisition of
the entire institutional business of the Russian broker Aton through the purchase of 100% of AI
Beteiligungs GmbH, a company newly created to hold shares of ZAO Aton Broker, Aton
International Ltd and OOO Aton Line. The total purchase price is US$424 million (approx. €307
million). In addition, BA-CA has finalized the acquisition of a 9.97% of the total share capital of
International Moscow Bank (IMB) from EBRD for a price of ca. US$229 million (approx. €166
million). Following completion of such acquisition, BA-CA now holds 100% of IMB’s share
capital.
Attached are the Group’s key figures, the Group’s reclassified balance sheets and income
statements and the main Divisional results, which are not subject to certification by the
Independent Auditors.
* EVA: Economic Value Added, equal to the difference between NOPAT (net operating profit after taxes) and the cost of capital.
** Since the close of FY 2006, the most significant changes in the scope of consolidation were principally due to the HVBGroup, with the entry of 3 subsidiaries in the Retail Division (Planethome AG and its subsidiaries Planethome GmbH and Enderlein) and one Private Banking Division entity (Wealth Management Capital Holding GmbH), and the exit of Indexchange and HVB Payments & Services GmbH. Compared to H1 2006, further significant changes in the scope of consolidation referred to the sale of Splitska Banka on 30 June 2006, Uniriscossioni, 2S Banca and Banque Monégasque de Gestion. For comparison purposes, the condensed income statement also includes the change in individual items over Q2 and H1 2006, scope of
consolidation and exchange rates used to translate subsidiaries’ income statements being the same. The main assets recognised as “Non-current assets and disposal groups classified as held for sale” under IFRS 5 in the balance sheet as at 30 June 2007 were “BPH200”, the BPH business to be sold following the agreement with the Polish Authorities, and Istratourist, a subsidiary of Zagrebacka Banka operating in the holiday industry already recognised under this item in March 2007.
*** Calculated on the basis of the average shareholders’ equity for the period (excluding dividends to be distributed, res erves for AfS assets and hedge cash flows)
**** “Full time equivalent”, calculated according to a new methodology which does not include unpaid leaves. In the figures reported the KFS Group, proportionately consolidated, is included at 100%.
Milan, August 3rd, 2007
Investor Relations:
Tel. +39-02-88628715; e-mail: [email protected]
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