UniCredit (UCG) Goldman Sachs 28th Annual European Financials conference summary

Business transformation and performance

• Achieved significant improvements in profitability, capital efficiency, and cost efficiency over the past three years, with €18 billion distributed and €27 billion in capital generated.

• Transitioned from a restructuring story to a sustainable, best-in-class bank, focusing on maintaining high profitability and capital generation.

• 2024 targets include net profit above €8.5 billion, return on tangible equity around 16.5%, and distributions in line with previous years.

• Excess capital above €6.5 billion after regulatory adjustments, with plans to deploy or return this by 2027.

• Distribution in 2025 and 2026 expected to exceed 2023 and 2024 levels, unless capital is deployed under strict criteria.

Net interest income (NII) and revenue drivers

• NII expected to moderate in 2024, with resilience in Q2; sensitivity to EURIBOR changes is €140 million per 25 basis points.

• Deposit pass-through expected to average slightly above 30% in 2024, with significant differentiation by country.

• Replicating portfolio contributes €400 million in 2024 and €700 million over 2024–2026, though benefits will decline over time.

• Lending strategy prioritizes profitability over volume, with repricing efforts improving credit spreads and NII sensitivity at €40 million per basis point.

• Overall, NII will moderate in 2024 but remain resilient, supported by fee growth.

Fee income growth strategy

• Targeting €1.4 billion steady-state fee increase by 2026, diversified by geography and source.

• Growth drivers include asset management (+€400 million), insurance (+€300 million), payments (+€300 million), and corporate solutions (+€300 million).

• Asset management focus on increasing retained value chain share from 70% to 80%.

• Insurance growth driven by reinsourcing JVs in Italy and strong performance in credit protection and property/casualty.

• Payments revenue base is €2.5 billion, with growth from transactional payments and partnerships like Mastercard.

• Corporate solutions growth supported by workforce strengthening and advisory expansion to SMEs.

• Q2 2024 trends confirm guidance, with fee growth in investment and payment segments.