IBOS member UniCredit’s positive 2017 second quarter results confirm early progress of Transform 2019.
UniCredit has reported a net profit of €945m in Q2 2017 and at €1.9bn in 1H 2017, surpassing analysts’ expectations as the Milan-based bank pressed ahead with a turnaround effort under Jean Pierre Mustier, who was appointed as chief executive last year. Based on revenues of €4.7bn, analysts had predicted a net profit of €676m for Q2 2017; however, revenues were slightly higher than expected at €4.9bn. Net interest income totalled €2.7bn, a slight increase over Q1 2017.
Jean Pierre Mustier, Chief Executive at UniCredit, commented:
“UniCredit’s good 2017 second quarter results confirm the early positive impact of Transform 2019 already seen in Q1. All our teams remain focused on the execution and the successful delivery of the plan.”
Transform 2019 is UniCredit’s 2016-2019 strategic plan, with the aim of: taking decisive actions on legacy issues, transforming the bank and building on existing competitive advantages to capture opportunities, as well as achieve future long-term profitability.
The strong actions underpinned by the Transform 2019 plan, combined with the positive results registered at Group level, contributed to strengthening the fully loaded CET1 ratio at 12.80% in Q2 2017, an improvement by 135 bp compared to Q1 2017. Additionally, transitional CET1 ratio increased to 12.93% in Q2 2017.
Below are the highlights from UniCredit’s Q2 2017 financial results:
- Revenues at €4.9bn (an increase of 0.4%), thanks to resilient NII and strong fees generation
- Fees at €1.5bn, on track to reach 2019 target
- Costs/Income ratio improved to 56.2% from 57% in Q1 2017
- Improved LLP at €564m
- Low cost of risk at 50 bp with guidance revised for 2017 to low 60s while confirmed for Transform 2019 at 49 bp
- Stated net profit at €945m and €1.3bn excluding the currency effects of Bank Pekao disposal