The Italian bank posted ‘very strong’ quarterly results on the back of ‘resilient commercial dynamics’ and a solid set of results in the first half of 2019, in what was a ‘though macroeconomic environment,' according to chief executive officer Jean Pierre Mustier (pictured).
For the second quarter of 2019, the group reported an adjusted net profit of €1billion, up 0.4% year-on-year, and a stated net profit of €1.9 billion, up 81% on the prior year quarter.
Unicredit confirmed its targets for the first half of 2019, including a group return on tangible equity above nine percent and an adjusted net profit of €4.7 billion, on which a 30% cash dividend pay-out applies.
Unicredit issued almost 37,000 structured products in the second quarter of 2019, up 26% from the 29,300 products sold in the same quarter last year, but down by 19% compared to 1Q2019 when the bank launched 45,400 products.
The majority of products sold during the second quarter were flow and leverage certificates targeted at retail investors in Austria and Germany that were listed on the exchanges of Frankfurt and Stuttgart.
Apart from listed certificates, the bank sold 18 structured products worth a combined €522m in Italy in the quarter – including the best-selling Cash Collect Autocallable that collected €119m during the subscription period.
In Austria and Germany, the bank launched 250 primary market products, mainly express certificates (reverse convertibles), while it was also active in Slovakia (five products), the Czech Republic and Poland (one product each).
Structures linked to a single share dominated proceedings (€455m from 225 products), followed by those linked to a single index (€122m from 37 products), although the highest average sales were accumulated by the five products tied to a basket of two stocks that were sold in Italy and averaged €63m per product.
Unicredit’s balance sheet included €92.4 billion in issued debt securities as of June 30 2019, up 5.6% year-on-year and an increase of 9.7% compared to end-March 2019.
Around 66% of the total 2019 group funding plan, or €21.1 billion, had been completed by June 30 while the 2019 total loss-absorbing capacity (Tlac) subordination funding plan of €6.5 billion was also completed with a Tlac ratio of 20.69%, representing a buffer of 112 bps versus the 19.6% minimum Tlac requirement.
Assets under management (AUM) increased to €191.2 billion in the second quarter, a €3.1 billion quarter-on-quarter increase, driven by a positive market performance and net AUM net sales.
Trading income totalled €253m in 2Q2019, down 19% year-on-year and down 42.8% quarter-on-quarter due to negative valuation adjustments. Client driven trading reached €271m in the second quarter and for the rest of the year, the expected average quarterly run rate of trading income is revised down from €350m to around €300m, according to the bank.
Unicredit issued 12 Italian SME (small and medium-sized enterprises) minibonds in the first half of 2019 for a total of €71m while thanks to a ‘successful’ insurance partnership with Allianz in Germany, life insurance volumes were up 68.4% year-on-year.
Click the link to view the 2Q19 and 1H19 results, presentation and divisional database.