The group Unicredit archive the first quarter 2020 and with a net book loss of 2,7 billion euro, in the face of an underlying net result of -58 million. Determine the weight of extraordinary write-downs related to the Covid-19 effect. The Bank made it known in a press release, specifying that revenues they stood at 4,37 billion euros, down by 8,2% year-on-year and by 9,7% compared to the last quarter of 2019.
On the profitability side, the interest margin it stopped at 2,5 billion, recording a decline of 3% on a trend basis and 0,5% in the quarter. The commissions, on the other hand, amounted to 1,6 billion, up 5,2% on the year.
As far as I was concerned coefficients, Unicredit says it has “a level of capital Cet1 very solid, at 13,44%, and a liquidity ratio at 143%”. The Cet1 MDa buffer rose to 436 basis points in the first quarter of 2020, “despite the update of the IFRS9 macro scenario”. The bank confirms that the Cet1 Mda buffer target will be "well above" 200-250 basis points throughout 2020.
In general, the result for the quarter was affected “by inoperative posts in line with guidance”: mainly integration costs in Italy (-€1,3 billion), transactions relating to Yapi (-€1,7 billion) and property sales (+€0,5 billion).
Unicredit writes that the beginning of the year was “excellent, with an excellent performance in the first two months”, while the consequences of the coronavirus pandemic “have been visible since March”.
In the new scenario, "in the light of the high uncertainty of the context", Unicredit announces that it will work on an update of the Strategic Plan, to be presented “at a Capital Markets Day towards the end of the year or the beginning of next year”. In any case, the Bank confirms that “the pillars of Team 23 remain a strategic priority: increase and strengthen the customer base; transformation and maximization of productivity; disciplined management of risk and controls; capital and budget management.
“Q2020 2019 once again confirmed the positive impact of Transform XNUMX on our entire business,” he comments. Jean Pierre Mustier, Chief Executive Officer of Unicredit – Our commercial performance in the first two months was very strong and we now have an extremely robust capital position, with a very large liquidity position, equal to 143 per cent at the end of the quarter”.
Following the extended lockdown, "we took the proactive decision to bring forward our periodic update of the IFRS9 macroeconomic scenario for the second quarter - the manager recalls - and we announced Additional 902 million euros of loan adjustments. Based on our realistic assumptions, we estimate our cost of risk will be in the 100-120bp range in FY2020”.
As for the remuneration for shareholders, "there are no changes in the dividend policy on 2021 and beyond“, explains Mustier in a telephone briefing with journalists, specifying that the guidelines on the pay-out ratio “will not change”, which “will be 40% on 2022 and 50% on 2023”.
As for the dividend for 2019, "we have suspended it and we will review the decision in the fourth quarter, after October XNUMX, taking into account the situation and the recommendations of the ECB".
Finally, “we have all the tools to face the unprecedented challenges presented by the Covid-19 pandemic thanks to our important strengths and our focused business model”, concludes Mustier.
In April, Unicredit disbursed almost one billion euros in state-guaranteed loans in Italy, but the goal is to reach 15 billion. Furthermore, as of April 24, the bank had approved 28 billion euros in loans to 279 customers in all the countries that offered the moratorium.
