A devaluation of 9,3 billion euros. More cleaning in Piazza Cordusio, or rather by now Piazza Gae Aulenti after Unicredit moved to the imposing Tower A of Porta Nuova. In 2011 the group had already started a maxi devaluation of 10 billion, and now the value of goodwill in the balance sheet is practically zeroed, at 3,5 billion, at 2004 levels. The intention is to prepare the field for the recovery which, however, Federico Ghizzoni himself admitted when presenting the 2013 accounts and the 2013-2018 strategic plan, I do not "deceive myself that it is easy". Ghizzoni hopes to be able to bring home a profit of around 2014 billion in 2, after 2013 closed with a net loss of 14 billion, due not only to write-downs on goodwill but also to additional provisions on loans, which rose by 46,8, 13,7% to 10 billion. In any case, a XNUMX-cent dividend is envisaged, even if he writes that, in Ghizzoni's words, "it gives one more chance, for some shareholders it may be more convenient".
For Unicredit, the benefit of the valuation of the stake in Bankitalia was 1,4 billion before taxes, recorded in the income statement under the item net profits from investments in the fourth quarter of 2013. But if at the end of the investigations underway by the authorities it will emerge that the valuation will be made using the equity method (and not the income statement), the group's net loss will be higher by 1,2 billion in the quarter and in the full year.
The provisions, explained the group, bring the cash coverage ratio to 52%, the pre-crisis levels and the levels of the average of European banks. With an eye to the next European stress tests.
If the recovery comes, it will probably be driven by Germany and Central-Eastern Europe because, Ghizzoni recalled, "we are not just Italians". In Italy the credit situation is what it is and Unicredit in its forecasts remains more conservative than the IMF, estimating a 0,8% loss of GDP.
In Italy, the business plan envisages continuing with the sale of non-performing loans in support of de-risking. Additionally, the group established a noncore portfolio in April 2013 to segregate business segments deemed non-witchcraft. A portfolio of 87 billion (at the end of December 2013), which cannot strictly be called a bad bank, because it includes not only non-performing loans (67%) but also performing loans (33%). A segregated portfolio which will employ 1.100 people and which will have internal quarterly reporting which will be disclosed to the market. In the meantime, Ghizzoni specified that the vehicle for restructured credits "hasn't faded away".
In Central and Eastern Europe, Unicredit aims to "invest in growth markets and rationalize geographical presence", increasing the allocation of capital in the area from 23 to 30% over the 2013-2018 plan. The bank in Ukraine is in sales, for which "provisions have been made for around 600 million, because there are ongoing negotiations and it is for sale".
Unicredit also plays the joker. Confirmed the next IPO of Fineco in 2014. As part of the management of the portfolio also the potential sale of Unicredit Credit Management Bank (UCCMB). Overall, from these and other initiatives (Ghizzoni did not want to respond to a possible IPO on Pioneer), the aim is for a benefit of around 30 basis points of capital. However, they are not yet considered in the Strategic Plan.
Lastly, in terms of objectives, the bank aims to achieve a profit of 2018 billion euro in 6,6 with a return on tangible capital (rote) of 13% and to distribute an average pay-out of approximately 40% throughout the arc of the floor. In addition, UniCredit's Commercial Bank business model review projects in Italy, Germany and Austria envisage a reduction in the workforce of approximately 8.500 units by 2018, of which over 5.700 additional redundancies in Italy. The savings will be €0,3 billion in 2016, and €0,7 billion on a recurring basis from 2018, including the effect of additional restructuring costs of around €650 million to be accounted for in 2016. The cuts will also affect Germany, 1.500, almost 10% of employees in the country, who have already been agreed with the unions, and 900 in Austria, almost 12% of the total.
In terms of capital requirements, the Cet1 stood at 10,4% phased-in (9,4% fully anticipating the effects of Basile3) and the group ruled out the possibility of a capital increase. The target for 2018 is 10% Cet1, fully anticipating the effects of Basel 3.
