“Il Transform 2019 plan of Unicredit is in line with expectations and is generating the first positive results, supported by renewed commercial dynamics throughout the group". This was stated by Jean Pierre Mustier, CEO of Unicredit.
“We confirm all our initial key objectives – he added – in particular the objective of a RoTE greater than 9 percent, with a further improvement of our risk profile and the reduction of the group gross non-performing loan target by a further €4,0 billion. We have decided to increase our FY 2019 dividend to 30 percent, while maintaining ours target CET1 ratio6 at a level greater than 12,5 per cent. Today we are also announcing the fully self-financed rundown of our Non Core NPL portfolio by the end of 2025.”
As regards the Pillar 2 capital requirement of the SREP, “it decreased by 50 basis points to 200 basis points – Mustier explained again – a clear recognition of the progress made in our plan, allowing us to reach a margin of over 250 basis points compared at CET1 MDA level after 2019. We have also decided to provide the market with a complete and transparent view of what we believe will be the evolution of the regulatory landscape and its impact on Unicredit up to 2019 and beyond”.
Mustier then underlined how Unicredit has “chosen to anticipate the implementation of some of the guidelines recently announced by the European Banking Authority (EBA). Thanks to our continued positive organic capital generation, the expected regulatory impact beyond 2019 will be incorporated leaving our CET1 ratio target unchanged at a level above 12,5 per cent. As soon as we have confirmation of the effects of these regulatory impacts, we will increase the dividend payout target from 30 per cent to 50 per cent”.
Transform 2019 therefore forms “the basis of a long-term, forward-looking strategy to seize opportunities and take advantage of the changing banking landscape and customer behaviour. Thanks to the commitment of all colleagues at Unicredit, we are convinced that we will achieve our Transform 2019 objectives, contributing together to make Unicredit a winning pan-European bank”, concluded Mustier.
UNICREDIT FALLS BELOW 20% OF "FINO"
Unicredit also announced that it has signed agreements to reduce its stake in the NPL portfolio called 'Fino' (initially equal to 17,7 billion then dropped to 16,2 billion) below 20% (from 49,9 % maintained at the end of the first phase, after having sold the majority of the two securitization vehicles created ad hoc to Fortress and Pimco).
In detail, on 7 December Generali, "following a competitive process and in-depth due diligence", bought 30% of the securities issued by Onif, the vehicle sold to Pimco which corresponded to NPLs for 3,3 billion. “This part of the portfolio – specifies a note from Unicredit – originally had a gross book value of 990 million and corresponded to a part of the 49,9 percent held by Unicredit. The price was in line with that of the sale of Phase One", or about 13% of the nominal value.
Unicredit also “entered into a definitive binding agreement with funds managed by King Street Capital Management for the sale of a part of its exposure in the securities issued by the vehicles acquired by Fortress, which corresponded to Npl for 14,4 billion. Fortress will also participate in the transaction and settlement of the transaction is expected in January 2018”.
