Fixed Income Presentation 2Q19 and 1H19 Results Milan, 7 August - - PowerPoint PPT Presentation

SLIDE 1

Fixed Income Presentation 2Q19 and 1H19 Results

Milan, 7 August 2019

SLIDE 2

Agenda

1

UniCredit at a glance

2

Transform 2019 update

3

2Q19 results

4

Asset quality

5

Capital

6

Funding & Liquidity

2

SLIDE 3

2Q19 adjusted(1) net profit at 1.0bn, CET1 ratio at 12.08% Fineco disposal boosts capital and stated net profit to 1.9bn

1 2 3 4 5 6

Very strong quarterly results benefitting from net positive exceptional items(1) and resilient commercial dynamics

• 2Q19 Group adjusted net profit of 1.0bn, up 0.4% Y/Y(2). Stated net profit of 1.9bn, up 81.0% Y/Y
• 1H19 adjusted Group Core RoTE at 10.7%, down 0.2p.p. 1H/1H(2). 1H19 adjusted Group RoTE at 8.8%, up 0.1p.p. 1H/1H(2)

(1) Exceptional items in 2Q19: Fineco disposal (+1,176m) and one-offs (-351m, o/w Ocean Breeze disposal -178m and others -173m). (2) Group and Group Core adjusted net profit and RoTE exclude net impacts from disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal -178m and others -173m (o/w -151m Core and -22m Non Core)). (3) 2Q19 TLAC ratio 20.69%, o/w 18.20% TLAC subordination ratio and 2.5% senior preferred exemption.

Focused execution of Transform 2019 continues to deliver tangible results

• Net FTE and 98% of branch reduction targets achieved, well ahead of plan
• 2Q19 costs at 2.5bn, down 4.4% Y/Y. FY19 costs of 10.1bn confirmed
• 2Q19 CoR at 60bps. FY19 target of 55bps confirmed, including 4bps from models
• 2Q19 Non Core gross NPEs of 15.7bn, down 5.8bn Y/Y

Strong capital position and successful execution of mitigation actions

• 2Q19 CET1 ratio at 12.08%. MDA buffer of 201bps
• 2Q19 CET1 ratio includes +24bps from Fineco disposal and -40bps of regulatory headwinds as per guidance
• 2Q19 TLAC ratio 20.69%(3). 2Q19 buffer of 112bps, target now at the upper end of 50-100bps range
• 2Q19 tangible equity up 4.0% Q/Q to 50.7bn, TBVpS up 3.9% Q/Q to 22.7

UniCredit at a glance

3

SLIDE 4

UniCredit: a simple successful pan-European Commercial Bank with a fully plugged in CIB, delivering a unique Western, Central & Eastern European network

Commercial Banking model delivering unique Western, Central and Eastern European network to extensive Retail and Corporate client franchise "One Bank" business model replicated across full network, driving synergies and streamlined operations CIB fully plugged into Commercial Banking, enabling cross-selling and synergies across business lines and countries Low risk profile business model benefiting from diversification and a more stable macro/regulatory environment 25.3 million clients(1) 80% revenues from Commercial Banking(2) Commercial Banks with leadership position(3) in 12(4) out of 14 countries €1.5bn joint CIB-Commercial Banking revenues(5) 53% revenues

• utside Italy(6)

(1) Data as of 2Q19 includes 100% clients in Yapi. (2) Business division revenues as of 1H19: CB Italy, CB Germany, CB Austria, CEE. (3) Data as of 1Q19, ranking between #1 and #5 in terms of total assets according to local accounting standards. (4) Austria, Bosnia, Bulgaria, Croatia, Czech Republic, Germany, Hungary, Italy, Serbia, Slovakia, Slovenia, Turkey. (5) Data as of June 2019 include revenues from GTB, ECM, DCM, M&A, Factoring, Markets products from Commercial Banking clients and structured finance products from Corporate clients. (6) Data as of 1H19 based on regional view.

UniCredit at a glance 1 2 3 4 5 6

4

SLIDE 5

Strong local Commercial Banks

Strong competitive advantage across countries and products

Rank by assets in Europe(2) Germany Austria CEE Italy # clients, m(1) 1.6 1.6 7.6 14.6 Revenues by geography(3)

(1) Data as of 1H includes 100% clients on Yapi. (2) Data as of 4Q18 based on available public data. For Germany, only private banks, for CEE compared to Erste, KBC, Intesa Sanpaolo, OTP, RBI, SocGen. UC data incl. Turkey pro quota. (3) Data as of 1H19 based on regional view. (4) Data as of 2Q19, where available (otherwise as of 1Q19), based on available public data; peers include: BNP, Deutsche Bank, Santander, HSBC, ISP, Société Générale. FX rate at 31 March 2019 for 1Q19 figures. (5) Dealogic as of beginning of July 2019; period: 1 Jan – 30 Jun 2019. (6) Source: Global Finance: www.gfmag.com; www.aifin.org.

22% 21% 10% 47% Italy CEE Austria Germany 1 2 3 4 5 6

"Go to" bank for European "Mittelstand" Corporates 2 3 1 1

UniCredit at a glance UniCredit at a glance

Best-in-class CIB product provider Awards

EMEA rankings(5) All Bonds in Euro in Italy, Germany and Austria(5) Syndicated Loans in Italy, Austria and CEE(5) EMEA Bonds in Euro by # of transactions(5)

1 2 1

Trade Finance Innovation: UC Trade Finance Gate(6) Global Finance Best Sub-custodian Bank in CEE, Austria, Bulgaria, Czech Republic, Hungary, Serbia and Slovenia(6) AIFIn Awards 2019 Financial Innovation: we.trade – New services for corporates(6) Loans to corporates in Eurozone, €bn(4) Peer 7 Peer 3 Peer 1 UniCredit Peer 4 Peer 5 Peer 6

5

SLIDE 6

1

UniCredit at a glance

2

Transform 2019 update

3

2Q19 results

4

Asset quality

5

Capital

6

Funding & Liquidity

Agenda

6

SLIDE 7

2015

UniCredit key targets

Revenues, €bn Cost/Income Costs, €bn Cost of risk Net profit, €bn RoTE(1) FL CET1 ratio Group gross NPEs, €bn Group gross NPEs ratio RWA, €bn Group Core gross NPEs ratio Non Core gross NPEs, €bn

2019 2Q19 1H19

Transform 2019 update

Adjusted net profit(1), €bn

(1) Group and Group Core adjusted net profit and RoTE exclude net impacts from disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal -178m and others -173m (o/w -151m Core and -22m Non Core)).

Group Core RoTE(1)

1 2 3 4 5 6

7 CET1 MDA buffer, bps 20.4 4.5 9.3 18.7

• 12.2
• 2.5
• 5.0
• 10.1

1.5 1.9 3.2 1.0 2.2 4.7 60.0% 54.3% 53.5% 53-54% 103bps 60bps 50bps 55bps 4% 8.3% 8.8% >9% 10.1% 10.7% >10% 10.4% 12.1% 12.1% 201 201 200-250 360.8 387.1 387.1 403.7 77.8 34.4 34.4 37.9 52.0 15.7 15.7 14.9 16.0% 7.0% 7.0% 7.5% 6.1% 3.9% 3.9% 4.7%

SLIDE 8

8

Transform 2019 achievements (1/2)

1

2 3 4 5 6 Transform 2019 update

• 2Q19 CET1 ratio at 12.08%. MDA buffer of 201bps
• CET1 MDA buffer by year end 2019 confirmed at the upper end of target range of

200-250bps(1)

• Sold remaining Fineco stake in July, expected CET1 ratio impact +0.3p.p. in 3Q19
• 2Q19 TLAC ratio 20.69%(2). 2Q19 buffer of 112bps, target now at the upper end of

50-100bps range

• S&P upgraded UniCredit SpA above the Italian sovereign
• Moody's upgraded UniCredit SpA's stand-alone rating and Tier 2 to investment grade
• 2Q19 Group gross NPE ratio improved to 6.98% (-1.8p.p. Y/Y) with Group gross NPEs down

8.2bn Y/Y and 3.1bn Q/Q, of which 2.1bn(3) disposals in 2Q19

• Group Core gross NPE ratio 3.9%, down 65bps Y/Y, well below FY19 4.7% target
• FY19 Non Core gross NPEs target meaningfully below 14.9bn and closer to 10bn
• 98% of 944 Transform 2019 branch closure target in Western Europe already achieved, with

24 branches closed in 2Q19 and 925 since December 2015

• Transform 2019 net FTE reduction target of 14,000 achieved. FTEs down by 274 Q/Q
• FY19 cost confirmed at 10.1bn, materially beating original Transform 2019 target

STRENGTHEN AND OPTIMISE CAPITAL FY19 CET1 ratio guidance confirmed TLAC ratio buffer now at upper end of 50- 100bps target range Rating upgrades IMPROVE ASSET QUALITY Original Transform 2019 asset quality targets materially beaten TRANSFORM OPERATING MODEL Transformation well ahead of plan FY19 costs confirmed

(1) Assuming BTP spreads remain at 2Q19 levels. (2) 2Q19 TLAC ratio 20.69%, o/w 18.20% TLAC subordination ratio and 2.5% senior preferred exemption. (3) Of which 1.1bn in Non Core.

SLIDE 9

Transform 2019 achievements (2/2)

Transform 2019 update

9

1 2 3 4 5 6

MAXIMISE COMMERCIAL BANK VALUE Multichannel offer/ customer experience Leading European CIB franchise

• Leading bond and loan market franchise confirmed: #2 in “EMEA All Bonds in EUR” by

number of transactions(1), #1 in EMEA Syndicated Loans in All Currencies(1) in Italy, Austria and CEE, #3 in Germany

• New Mobile Banking App across Western Europe, already successfully rolled out in Italy.

Standardisation creates a consistent user experience and faster innovation time to market

• New digital account opening process in Germany, enhancing customer experience, allowing
• pening of a current account in a few minutes via mobile and online

9

(1) Source: Dealogic, as at 1st July 2019. Period: 1 January – 30 June 2019; rankings by volume, unless otherwise stated.

• The ratio of GCC costs to total costs is down to 3.3% in 1H19. FY19 target of 3.5%

ADOPT LEAN BUT STEERING CENTRE Group CC streamlining Five Excellence Awards

• 2019 Euromoney Awards for Excellence: Best Bank in Italy, Croatia, Serbia, Wealth

Management in CEE and Transaction Services in CEE Commercial partnerships

• Successful insurance partnership with Allianz in Germany. Life insurance volumes

up 68.4% Y/Y Support for real economy

• UniCredit issued 12 Italian SME "Minibonds" in 1H19 for a total of 71m, contributing to the

development of an SME capital market culture in Italy

SLIDE 10

1

UniCredit at a glance

2

Transform 2019 update

3

2Q19 results

4

Asset quality

5

Capital

6

Funding & Liquidity

Agenda

10

SLIDE 11

10% 22% 16% 16% 12% n.m. n.m. n.m. n.m.

Group Core – Adjusted 1H19 RoTE 10.7% down 0.2p.p. 1H/1H(1)

RoTE

1 2 3 4 5 6

11

1H19 RoAC(2)

5,473

• 779

6,252 1,422 1,591 1,304 1,318 1,217 2,553 2,535 2Q18 1H19 2Q19 1Q19 1H18

• 6.7%
• 7.6%
• 0.7%

Group p Core adjusted net prof

• fit(1), m
• Adjusted 1H19 Group Core RoTE at 10.7%, down 0.2p.p. 1H/1H(1)
• CEE and CB Italy main drivers
• FY19 Group Core RoTE target >10% confirmed

Adjusted net profit(1) by division 2Q19, m

(1) Group and Group Core adjusted net profit and RoTE exclude net impacts from disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal -178m and others -173m (o/w -151m Core and -22m Non Core)). Stated net profit 2Q19: CB Italy +244m, CIB +100m, Group CC +925m and Non Core -211m. (2) Stated 1H19 RoAC. Normalised for non-recurring items (summarised in Annex on page 44), 1H19 RoACs are: CB Italy 11.4%, CB Germany 9.4%, CB Austria 12.1% and CIB 11.2%.

362 1,217 1,029 146 165 484 278 CEE Group Core CB Italy

• 218
• 189

CB Germany CB Austria CIB Group CC Non Core Group 11.3% 10.1% 10.9% 10.7% 11.3% 2Q19 results

SLIDE 12

Group Core – Adjusted 2Q19 net profit 1.2bn down 6.7% Y/Y(1) Adjusted 1H19 RoTE at 10.7% down 0.2p.p. 1H/1H(1)

12

(1) Group and Group Core adjusted net profit and RoTE exclude net impacts from disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal -178m and others -173m (o/w -151m Core and -22m Non Core)). (2) Managerial figures. (3) Weighted average "NPL" ratio of EBA sample banks is 3.1%. Source: EBA risk dashboard (data as at 1Q19). UniCredit's definition of "NPE" ratio is more conservative than EBA. Comparable "NPL" ratio for UniCredit at 2Q19 would be 3.4% for Group Core.

1 2 3 4 5 6

Main drivers

• Revenues down 4.1% Y/Y due to lower trading (-18.8% Y/Y) and

commercial revenues (-1.8% Y/Y)

• Net interest down 1.1% Q/Q impacted by pre-funding of TLAC

and higher deposit rates in CEE countries

• Fees down 2.7% Y/Y due to investment fees (-4.9% Y/Y) and

financing fees (-10.7% Y/Y), partially compensated by transactional fees (+6.8% Y/Y)

• 435,000 gross new clients in 2Q19
• Gross new loan production(2) at 45.8bn in 1H19 (-8.3% Y/Y)
• Costs down 4.5% Y/Y thanks to continued strong focus on cost
• discipline. 1H19 C/I ratio at 52.6%, down 0.6p.p. 1H/1H
• LLPs up 400m Y/Y after very low 2Q18 which benefitted from

write-backs in CIB, CB Austria and CEE

• Gross NPE ratio 3.9%(3), down 65bps Y/Y, well below FY19 4.7%

target

• 1H19 adjusted RoTE at 10.7%, down 0.2p.p. 1H/1H(1)

Data in m Total revenues 4,714 4,767 4,521

• 5.2%
• 4.1%

9,614 9,289

• 3.4%
• /w Net interest

2,581 2,576 2,549

• 1.1%
• 1.2%

5,108 5,125 +0.3%

• /w Fees

1,605 1,538 1,562 +1.6%

• 2.7%

3,238 3,100

• 4.3%
• /w Trading

319 444 259

• 41.7%
• 18.8%

811 703

• 13.3%

Operating costs

• 2,524
• 2,471
• 2,410
• 2.5%
• 4.5%
• 5,108
• 4,881
• 4.4%

Gross operating profit 2,190 2,296 2,111

• 8.1%
• 3.6%

4,505 4,407

• 2.2%

LLPs

• 114
• 364
• 514

+41.1% n.m.

• 483
• 878

+81.6% Net operating profit 2,076 1,932 1,597

• 17.3%
• 23.1%

4,022 3,530

• 12.2%

Net profit 1,304 1,576 2,065 +31.0% +58.3% 2,553 3,640 +42.6% Adjusted net profit(1) 1,304 1,318 1,217

• 7.6%
• 6.7%

2,553 2,535

• 0.7%

Adjusted RoTE(1) 11.3% 11.3% 10.1%

• 1.1p.p.
• 1.2p.p.

10.9% 10.7%

• 0.2p.p.

C/I 53.5% 51.8% 53.3% +1.5p.p.

• 0.2p.p.

53.1% 52.6%

• 0.6p.p.

CoR (bps) 10 31 44 +13 +34 22 38 +16 Gross NPE ratio 4.6% 4.2% 3.9%

• 23bps
• 65bps

4.6% 3.9%

• 65bps

1H18 1H19 ∆ % vs. 1H18 2Q18 ∆ % vs.2Q18 1Q19 2Q19 ∆ % vs.1Q19

2Q19 results

SLIDE 13

Group – Adjusted 2Q19 net profit 1.0bn up 0.4% Y/Y(1) Adjusted 1H19 net profit 2.2bn up 1.0% 1H/1H(1)

(1) Group and Group Core adjusted net profit and RoTE exclude net impacts from disposal of real estate (+258m in 1Q19), Fineco (+1,176m in 2Q19) and one-offs (-351m in 2Q19, o/w Ocean Breeze disposal -178m and others -173m (o/w -151m Core and -22m Non Core)). (2) 2Q19 net impact from disposal of Ocean Breeze -178m, with a related impact of +81m in the tax line.

1 2 3 4 5 6

Main drivers

• Net interest down 0.9% Q/Q impacted by pre-funding of TLAC and

higher deposit rates in CEE countries

• Fees down 3.0% Y/Y due to financing fees (-11.2% Y/Y) partially

compensated by transactional fees (+6.2% Y/Y)

• Costs at 2.5bn in 2Q19 down 4.4% Y/Y thanks to lower HR costs

(-4.5% Y/Y) and Non HR costs (-4.1% Y/Y)

• LLPs up 41.0% Y/Y following exceptional write-backs in 2Q18,

leading to 60bps CoR in 2Q19 (including 0bps of models)

• One-offs affecting other charges & provisions and profit from

investments for a total of -173m

• Profit from investments includes -259m gross(2) from Ocean

Breeze disposal

• Stated 1H19 tax rate 27.1%
• Net profit from discontinued operations in 2Q19 positively

affected by disposal of Fineco

• 2Q19 Group adjusted net profit of 1.0bn, up 0.4% Y/Y(1)

Data in m Total revenues 4,736 4,766 4,517

• 5.2%
• 4.6%

9,647 9,283

• 3.8%
• /w Net interest

2,608 2,578 2,554

• 0.9%
• 2.1%

5,169 5,132

• 0.7%
• /w Fees

1,613 1,541 1,565 +1.5%

• 3.0%

3,254 3,106

• 4.6%
• /w Trading

312 442 253

• 42.8%
• 19.0%

782 696

• 11.0%

Operating costs

• 2,564
• 2,515
• 2,452
• 2.5%
• 4.4%
• 5,198
• 4,966
• 4.5%

Gross operating profit 2,172 2,252 2,065

• 8.3%
• 4.9%

4,449 4,316

• 3.0%

LLPs

• 502
• 467
• 707

+51.4% +41.0%

• 997
• 1,175

+17.8% Net operating profit 1,670 1,784 1,357

• 23.9%
• 18.8%

3,452 3,142

• 9.0%

Other charges & provisions

• 660
• 214
• 236

+10.5%

• 64.2%
• 1,178
• 450
• 61.8%
• /w Systemic charges
• 173
• 538
• 118
• 78.0%
• 31.8%
• 638
• 656

+2.8% Profit (loss) from investments 204 391

• 307

n.m. n.m. 221 84

• 62.1%

Profit before taxes 1,212 1,959 812

• 58.5%
• 33.0%

2,505 2,771 +10.6% Income taxes

• 226
• 577
• 174
• 69.9%
• 23.1%
• 419
• 751

+78.9% Net profit from discontinued operations 96 65 1,307 n.m. n.m. 164 1,372 n.m. Net profit 1,024 1,387 1,854 +33.7% +81.0% 2,136 3,241 +51.7% Adjusted net profit(1) 1,024 1,129 1,029

• 8.9%

+0.4% 2,136 2,158 +1.0% 1H18 1H19 ∆ % vs. 1H18 2Q18 ∆ % vs.1Q19 ∆ % vs.2Q18 1Q19 2Q19

2Q19 results

13

SLIDE 14

Net Interest (1), m

Group – 2Q19 net interest at 2.6bn down 0.9% Q/Q. Fees down 3.0% Y/Y due to financing fees

Fees and commissions, m

• Net interest at 2.6bn in 2Q19, down 0.9% Q/Q due to TLAC pre

funding costs and deposit rates

• Fees down 3.0% Y/Y due to financing fees partially

compensated by transactional fees

2Q19 results 1 2 3 4 5 6

• 0.32%

Net interest margin (2) 1.42%

(-1bp Q/Q)

Average Euribor 3M 1.39% 1.34% 14

2,608 2,578 2,554 5,169 5,132 1H19 2Q18 1Q19 2Q19 1H18

• 2.1%
• 0.9%
• 0.7%

540 555 574 1,088 1,129 455 444 404 908 849 618 542 587 1,258 1,129

2Q18 1Q19 2Q19

Transactional Investment

1H18

3,106

1H19

Financing

3,254 1,541 1,613 1,565

• 3.0%

+1.5%

• 4.6%

(1) Net contribution from hedging strategy of non-maturity deposits in 2Q19 at 349m, -10.3m Q/Q and -20.1m Y/Y. (2) Net interest margin calculated as interest income divided by interest earning assets minus interest expenses divided by interest bearing liabilities.

SLIDE 15

Group – Trading income down 19.0% Y/Y due to XVA(1)

Dividends(2), m

15

83 76 63 183 139 86 90 91 171 182 167 2Q18 1H18 1Q19 2Q19 Other dividends 1H19 Yapi (at equity) 154 169 353 321

• 8.8%
• 7.3%
• 9.1%

1 2 3 4 5 6

• Trading income down 19.0% Y/Y due to XVA(1) (-98m Y/Y)
• Client driven trading includes valuation adjustments (XVA(1))

equal to -64m in 2Q19 (-112m in 1Q19 and +34m in 2Q18)

• Expected average quarterly run rate revised down from 350m

to around 300m

• Yapi´s contribution down 4.5% Y/Y at constant FX, down 23.7% Y/Y at

current FX due to depreciation of the Turkish Lira (TRY)

• The regulatory consolidation of Yapi's RWA is pro rata (22.5bn)
• The TRY FX sensitivity on the Group's CET1 ratio positive at around +1bp net

impact for 10% adverse FX move(3)

• Other dividends up 5.5% Y/Y thanks to insurance JVs in Italy

Trading income, m

128 271 93 110 312 314 689 586 1H19 1 Client driven 2Q18 1Q19 2Q19

• 18

1H18 Other trading 312 442 253 782 696

• 19.0%
• 42.8%
• 11.0%

(1) Valuation adjustments (XVA) include: Collateral Valuation Adjustment (OIS), Debt/Credit Value Adjustment (DVA/CVA), Fair Value Adjustment and Funding Valuation Adjustment (FVA). (2) Include dividends and equity investments. Yapi is valued by the equity method and contributes to the dividend line of the Group P&L based on managerial view. (3) TRY sensitivity: 10% depreciation of the TRY has around +1bp net impact (-3bps from capital, +3bps from RWA) on the fully loaded CET1 ratio. Managerial data as at 30 June 2019.

2Q19 results

SLIDE 16

Group – 2Q19 Group costs at 2.5bn down 4.4% Y/Y and 2.5% Q/Q FY19 costs confirmed at 10.1bn

FTEs Es (end-of-period)

16 (1)

Branch figures consistent with CMD 2016 perimeter.

1 2 3 4 5 6

Branc nche hes(1) Main drivers

• Transform 2019 well ahead of

plan:

• Net FTE reduction target

achieved (14,000)

• 98% of branch closures

completed (925 out of 944)

• FTEs down 2,708 Y/Y, branches

down 163 Y/Y

• 1H19 C/I 53.5%, down 0.4p.p.

1H/1H

• 2Q19 total costs at 2.5bn, down

4.4% Y/Y thanks to continued strong focus on cost discipline

• FY19 costs confirmed at 10.1bn

2,564 2,515 2,452 5,198 4,966 2Q18 1Q19 2Q19 1H18 1H19

• 4.4%
• 2.5%
• 4.5%

C/I 63,556 60,911 60,555 23,988 24,200 24,281 W.E. 2Q18 1Q19 2Q19 CEE 87,544 85,111 84,836

• 2,708
• 274

3,019 2,908 2,884 1,679 1,651 1,651 2Q18 W.E. CEE 1Q19 2Q19 4,698 4,559 4,535

• 163
• 24

Q/Q Q/Q

Costs, m

54.1% 52.8% 54.3% 53.9% 53.5%

+0.3%

• 0.6%

+0.0%

• 0.8%

2Q19 results

SLIDE 17

• 2Q19 LLPs up 41.0% Y/Y, leading to CoR of 60bps, including 2bps of

IFRS9 macro scenario and 0bps of models. 1H19 CoR at 50bps, FY19 55bps CoR target confirmed, including 4bps from models

• Group gross NPE ratio improved to 7.0% in 2Q19, down 1.8p.p. Y/Y.

Coverage ratio at 61.0%, up 0.1p.p. Y/Y

• Group Core gross NPE ratio at 3.9%(1), down 65bps Y/Y, well below

FY19 4.7% target

• CoR across divisions in 2Q19:
• CB Italy CoR at 88bps in 2Q19, up 27bps Y/Y due to one large file

(12bps) and seasonal adjustments including IFRS9 macro scenario (14bps). FY19 CoR target confirmed at 58bps

• CB Germany CoR at 2bps. FY19 CoR expected to be low
• CB Austria CoR at -2bps in 2Q19 thanks to net write-backs. FY19

CoR expected to be very low

• CEE CoR low at 52bps thanks to a supportive risk environment.

FY19 CoR will be well below 102bps target

• CIB CoR at 35bps in 2Q19 due to non-recurring single names. FY19

CoR target confirmed at 21bps

Loan loss provisions, m

Group – 2Q19 LLPs up 41.0% Y/Y due to exceptional write-backs in 2Q18 Gross NPE ratio 7.0% down 1.8p.p. Y/Y

Cost of risk

• Cov. ratio

gross NPE Gross NPE ratio

1 2 3 4 5 6

Main drivers

502 467 707 997 1,175 2Q18 1Q19 2Q19 1H18 1H19 +41.0% +51.4% 17.8%

(1) Weighted average "NPL" ratio of EBA sample banks is 3.1%. Source: EBA risk dashboard (data as at 1Q19). UniCredit's definition of "NPE" ratio is more conservative than EBA. Comparable "NPL" ratio for UniCredit at 2Q19 would be 3.4% for Group Core.

45bps 40bps 60bps 60.9% 61.7% 61.0% 8.8% 7.6% 7.0% 45bps 50bps

• /w 5bps models

impact

2Q19 results

17

SLIDE 18

1

UniCredit at a glance

2

Transform 2019 update

3

2Q19 results

4

Asset quality

5

Capital

6

Funding & Liquidity

Agenda

18

SLIDE 19

Group – 2Q19 Group gross NPE ratio at 7.0% (-180bps Y/Y) Coverage ratio at 61.0 % up 0.1p.p. Y/Y

• /w Gross bad loans, bn
• /w Gross unlikely to pay, bn

Non performing exposures(1), bn

24.2 20.2 Coverage ratio Gross NPE ratio Coverage ratio Net bad loans Net NPE ratio Net NPE 1 2 3 4 5 6 1 2 3 4 5 6

16.7 2Q19 2Q18 14.4 1Q19 13.4

42.6 37.6 34.4

• 19.2%
• 8.4%

Coverage ratio Net UTP

2Q19 5.3 6.4

24.1

2Q18 5.8 1Q19

21.4 19.1

• 20.5%
• 10.5%

2Q18 9.6 7.9 1Q19 2Q19 7.5

17.5 15.3 14.4

• 18.1%
• 6.2%

8.8% 7.6% 7.0% 3.7% 3.1% 2.9% 60.9% 61.7% 61.0% 73.5% 72.8% 72.2% 45.1% 48.2% 47.9%

Asset quality

(1) Gross NPEs including gross bad loans, gross unlikely to pay and gross past due.

19

SLIDE 20

(1) Gross NPEs including gross bad loans, gross unlikely to pay and gross past due. Gross past due at 28m in 2Q19 (-14.3% Q/Q and -76.5% Y/Y).

Non Core – Gross NPEs at 15.7bn, down 27.1% Y/Y and 11.6% Q/Q Coverage ratio 66.0%, up 1.9p.p. Y/Y

Asset quality

• /w Gross unlikely to pay, bn
• /w Gross bad loans, bn

2Q18 2Q19 7.7 6.1 1Q19 5.3 21.5 17.7 15.7

• 27.1%
• 11.6%

Coverage ratio Gross NPE ratio Net NPEs 4.2 2Q18 2Q19 3.1 2.8 1Q19 7.8 6.3 5.6

• 27.8%
• 10.4%

Coverage ratio Net UTP Coverage ratio Net NPE ratio 2019 Target <<14.9 2Q19 3.4 1Q19 2Q18 2.9 2.6 13.6 10.0 11.5

• 26.3%
• 12.3%

Net bad loans

Non performing exposures(1), bn

90.0% 100.0% 100.0% 64.0% 65.8% 66.0%

100% 100% >57%

74.9% 74.7% 74.6% 45.3% 49.7% 50.6% 100.0% 77.5% 100.0% 1 2 3 4 5 6 1 2 3 4 5 6

20

SLIDE 21

2021 Non Core runoff fully on track

NPEs coverage, % Bad loans cov., % UTP coverage, % Net Loans, €bn Performing NPE

2021 3Q16

6.7

2Q19

49.6

2019

56.3 15.7 <<14.9

• 40.6
• 0.8

Gross Loans, €bn €bn

Total FINO phase 2 closed in Jan 2018 Mostly corporate Mainly driven by corporate, small business Both single name and portfolios Cash recoveries on workout and UTP Active portfolios' management and cost

• ptimization

Other movements (i.e. Debt to Equity) 1 2 3 4 5 6 1 2 3 4 5 6 FINO "Back" to Core Repayments Disposals Recoveries Write-offs Other

Non Core evolution

Full rundown

Asset quality Sep16-Jun19

• 17.0
• 5.4
• 0.9
• 7.0
• 3.1
• 5.7
• 1.5
• 40.6

Actions of Non Core rundown

29.5 5.3 6.4 53.5 66.0 >57 33.3 50.6 >38 60.5 74.6 >63

21

SLIDE 22

1

UniCredit at a glance

2

Transform 2019 update

3

2Q19 results

4

Asset quality

5

Capital

6

Funding & Liquidity

Agenda

22

SLIDE 23

Group – CET1 ratio at 12.08% as negative regulatory headwinds exceeded the Fineco disposal benefit

Common Equity Tier 1 ratio, %

Capital

(1) Combined impact on CET1 ratio from sale of first tranche of Fineco in May 2019 which led to deconsolidation. (2) Excluding impact from disposal of Fineco. (3) Payment of coupons on AT1 instruments (152m pre tax in 2Q19, 372m expected for FY19) and CASHES (32m pre and post tax in 2Q19, 125m expected for FY19). Dividends accrued on adjusted net profit. (4) In 2Q19 CET1 ratio impact from FVOCI +8bps, o/w +3bps thanks to BTP. (5) BTP sensitivity: +10bps parallel shift of BTP asset swap spreads has a -2.5bps pre and -1.8bps post tax impact on the fully loaded CET1 ratio as at 30 June 2019. (6) TRY sensitivity: 10% depreciation of the TRY has around +1bp net impact (-3bps from capital, +3bps from RWA) on the fully loaded CET1 ratio. Managerial data as at 30 June 2019. (7) DBO sensitivity: 10bps decrease in discount rate has a -4bps pre and -3bps post tax impact on the fully loaded CET1 ratio as at 30 June 2019. (8) Assuming BTP spreads remain at 2Q19 levels.

• 2Q19 CET1 ratio at 12.08% down 18bps Q/Q as regulatory headwinds more than compensated the Fineco disposal benefit
• CET1 MDA buffer by year end 2019 confirmed at the upper end of target range of 200-250bps(8)

+24bps

12.25%

2Q19 stated

• 55bps

Net profit 2Q19(2) 1Q19 stated Fineco deconsolidation(1) Dividend & AT1/CASHES Coupon(3) FVOCI(4,5), FX(6), DBO(7) reserves RWA dynamics(2) Other(2)

12.08%

• 13bps

+18bps +7bps +2bps

FVOCI: +8bps FX: +1bp o/w TRY: -1bps DBO: -2bps Regulatory headwinds: -40bps TRY: +1bps

23

1 2 3 4 5 6 1 2 3 4 5 6

SLIDE 24

CET1

CET1 11.71% AT1 0.94% CET1 11.71% AT1 0.94% CET1 13.94% AT1 1.38% T2 2.87%

1Q19 12.25% 2Q19 12.08%

• 0.2p.p.

2Q19 13.93% 1Q19 1.56% 13.63% 12.08%

• 0.3p.p.

1Q19 2.58% 1.56% 2Q19 12.08% 16.36% 16.21%

• 0.1p.p.

CET1 AT1 CET1 AT1 T2

Tier 1 1 trans nsitiona nal Total capi pital trans nsitional

Group – Transitional capital ratios well above MDA levels

1 2 3 4 5 6 1 2 3 4 5 6 Capital €45.6 bn

Absolute amount for CET1, Tier1 capital transitional and total capital transitional. 10.07% MDA 2Q19 11.57% MDA 2Q19 13.57% MDA 2Q19

€46.7 bn €51.8 bn €52.8 bn €60.8 bn €62.8 bn

24

SLIDE 25

Solid fully loaded CET1 ratio at 12.08% and leverage ratio at 4.98%

Peer 8 Peer 5 Peer 7 Peer 2 Peer 1 Peer 3 Peer 4 Peer 6 Peer 11 UniCredit Peer 9 23.6 Peer 10 112.1 23.6 36.9 38.1 41.5 43.4 46.2 46.5 46.7 68.4 79.7

Total assets €/bn Total capital(2)

3.92 4.10 4.30 4.30 4.40 4.50 4.98 5.00 5.00 5.40 5.50 6.60 UniCredit Peer 6 Peer 1 Peer 2 Peer 4 Peer 3 Peer 5 Peer 7 Peer 9 Peer 8 Peer 10 Peer 11 Peers Avg. 4.8% 56.6 60.2 55.6 64.7 29.1 31.6 49.3 58.7 62.8 89.6 102.0 158.5 698 503 1,389 583 1,512 1,660 828 913 1,436 832 2,373 2,370

2Q19 1Q19

1 2 3 4 5 6 1 2 3 4 5 6

Fully loaded CET1 capital(1) as of June 19, €bn Fully loaded Basel 3 Leverage ratio(3) as of June 19, %

Capital

25

(1) FL CET1 capital where available or calculated as FL CET1 ratio * RWA (FL where available) (2)

• 2. Transitional Total Capital for UniCredit. Fully loaded Total Capital where available or calculated as Total Capital ratio * RWA (FL where available)

(3)

• 3. FL leverage ratio where available. Peers: BBVA, BNP, Commerzbank, CASA, DBK, HSBC, ISP, ING Group, Nordea, Santander, SocGen. FX rate at 31 March 2019 for 1Q19 figures

SLIDE 26

1

UniCredit at a glance

2

Transform 2019 update

3

2Q19 results

4

Asset quality

5

Capital

6

Funding & Liquidity

Agenda

26

SLIDE 27

Well diversified and centrally coordinated funding and liquidity profile

(1) Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Russia, Slovakia, Slovenia, Serbia and Turkey.

CEE Banks (11 CEE countries(1)) Western Europe

 UniCredit S.p.A. operates as the Group Holding as well as the Italian operating bank and is the TLAC/MREL issuer assuming Single-Point-of-Entry (SPE)  Coordinated Group-wide funding and liquidity management to

• ptimise market access and funding costs

 Diversified by geography and funding sources  All Group Legal Entities to become self-funded by progressively minimising intragroup exposures  UniCredit Bank AG and UniCredit Bank Austria AG may resume issuance of Senior Preferred bonds into the wholesale institutional market

Funding & Liquidity 1 2 3 4 5 6 1 2 3 4 5 6

27

SLIDE 28

102 21 58

Strong and disciplined liquidity steering

• €160bn liquid assets immediately available, well above

100% of wholesale funding maturing in 1 year (Managerial figures)

Additional eligible assets available within 12 months(1) Cash and Deposits with Central Banks Unencumbered assets (immediately available)(1)

181 160

€bn

2Q19 strong liquidity buffer

Funding & Liquidity 1 2 3 4 5 6 1 2 3 4 5 6

• UniCredit S.p.A. LCR(2) and NSFR(3) >100%

Compliant with key liquidity ratios

Group LCR(2) Group NSFR(3) >100% >100%

(1) Unencumbered assets are represented by all the assets immediately available to be used with Central Banks. Additional eligible assets (available within 12 months) consist of all the other assets eligible within 1 year time. Figures are net of ECB haircut. (2) Regulatory figure as of June 2019. (3) Managerial figure based on Basel III assumption as of June 2019.

28

SLIDE 29

29

Group – TLAC ratio 20.69%(1), 112bps buffer

UniCredit SpA 2019 TLAC Funding Plan

CET1 ratio

Tier 2

TLAC Requirement >19.6%

Senior Preferred exemption Senior Non Preferred & Other(3)

Subordination req. >17.1%

€/bn

20.1-20.6% 17.6-18.1%

AT1

(1) 2Q19 TLAC ratio 20.69%, o/w 18.20% TLAC subordination ratio and 2.5% senior preferred exemption. (2) As at 2 August 2019. (3) Non computable portion of subordinated instruments.

2.5%

• 2019 TLAC funding plan 9.0bn, o/w 7.7bn already issued(2), de facto completed
• Fully compliant with TLAC requirements of >19.6%. 2Q19 TLAC ratio 20.69%(1). 2Q19 buffer of 112bps, target now at the

upper end of 50-100bps range

Plan 2019 1.0 2.3 2.5 3.2

• /w to be issued(2)

1.25 6.5

TLAC buffer target now at upper end of 50- 100bps range

Target FY 2019

• /w subordinated

9.0 1.25 Total 20.69% 18.20% 12.08% 2Q19

CET1 MDA buffer target 200- 250bps

1 2 3 4 5 6 1 2 3 4 5 6 Funding & Liquidity

SLIDE 30

Funding & Liquidity 1 2 3 4 5 6 1 2 3 4 5 6

As of 30th June 2019 ca. 66% (€21.1bn) of the Group Funding Plan was executed

UniCredit Group 2019 Funding Plan

Note: Managerial figures.

65.7% of Group Funding Plan was executed in 1H 2019, in particular UniCredit issued in Q2 2019:

• €1.25bn callable Senior Preferred 6NC5 Fixed/FRN from UniCredit SpA
• €0.75bn callable Senior Non Preferred 6NC5 Fixed/FRN from UniCredit SpA
• €1bn 15-Year Pfandbrief from UniCredit Bank AG
• $0.5bn 3-Year Pfandbrief from UniCredit Bank AG
• €0.5bn 8-Year Pfandbrief from Bank Austria

2019 M/L Term Funding Plan by bank

2.3 (69.1%) 11.3 13.0 UniCredit SpA 3.3 5.6 (49.7%) 4.5

2019 Planned

10.1 (77.6%) 3.1 (68.9%)

2019 Actual

UniCredit Bank AG Bank Austria CEE

32.1

UniCredit SpA UniCredit Bank AG Bank Austria CEE

€ bn

UniCredit SpA CEE UniCredit Bank AG Bank Austria

€21.1bn (65.7%)

30

SLIDE 31

Funding & Liquidity

Ratings overview

31

BBB/Negative/A2(1) Baa3/Stable/P3(1) BBB/Negative/F2(1) Senior Non Preferred T2 AT1 OBGI/OBGII (Ital CB)(5),(6) BBB/Stable/A2(1) (bbb)(2) Baa1/Stable/P2(1) (baa3)(2) BBB/Negative/F2(1) (bbb)(2) BBB- BB+ n.r. AA-/n.r. Baa2 Baa3 n.r. Aa3/Aa3 BBB BBB- B+ AA/n.r.

 Since July 19 UniCredit S.p.A. is rated above the

Italian sovereign with outlook changed to 'stable' from 'negative' based on UC S.p.A's significantly enhanced ability to withstand a sovereign distress scenario. Expected to continue benefitting from much stronger geographic diversification

• utside Italy than peers and the material progress

it has made in reducing its stock of NPEs in Italy and in strengthening its capitalization

 In July 19, UniCredit S.p.A.'s stand-alone and Tier 2

rating were upgraded to 'baa3' at investment grade level. SNP rating was upgraded to 'Baa2'. This reflects the continued de-risking and strengthened credit profile underpinned by a sharp reduction in the stock of NPL's in recent years jointly with improved and more stable profitability. Issuer Rating at max +2 notches above the Italian sovereign ratings, is capped at 'Baa1'

 UniCredit S.p.A. execution of the bank’s Transform

2019 plan has been good to date and where feasible has accelerated declared targets (e.g. NPL and FTE reductions, branch closures). Regarding asset quality, the discipline in new origination has strengthened. In Sep18 the bank’s outlook has been aligned with Italian sovereign at ‘negative’ (previously ‘stable’) BBB+/Negative/A2(1) (bbb+)(2) A2(3)/Stable/P1(1) (baa2)(2) BBB+/Negative/F2(1) (bbb+)(2) BBB+/Negative/A2(1) (bbb+)(2) Baa1(4)/Stable/P2(1) (baa2)(2) Not rated (1) Order: Long-Term Sr Unsecured Debt Rating / Outlook or Watch-Review / Short-Term Rating. (2) Stand-Alone Rating. (3) Deposit and Senior-Senior rating shown, while Junior Senior Debt at 'Baa3' (4) Long-Term Sr Unsecured debt rating shown, while deposit rating at 'A3' with stable outlook (5) Soft Bullet. (6) Conditional Pass Through

1 2 3 4 5 6 1 2 3 4 5 6

SLIDE 32

32

Disclaimer

This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of UniCredit S.p.A. (the “Company”). There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and

• pinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Neither this Presentation nor any part of it nor the

fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision. The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the “Other Countries”), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries. Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Stefano Porro, in his capacity as manager responsible for the preparation of the Company’s financial reports declares that the accounting information contained in this Presentation reflects the UniCredit Group’s documented results, financial accounts and accounting records. Neither the Company nor any member of the UniCredit Group nor any of its or their respective representatives, directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.