GENERAL MEETING DRAFT - Bankier.pl

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>> Report on Operations
Corporate & Investment Banking (CIB)
Despite the considerable downturn in the economy and markets, the Corporate & Investment Banking
area ended 2009 with significantly better results than the previous year, and reported a 125% increase
in operating profit.
Income Statement (€ million)
YEAR CHANGE 2009
CHANGE 2008
2009 2008 % Q4 Q3 % Q4
CORPORATE & INVESTMENT BANKING ON Q3 '09
Operating income 10,033 6,474 + 55.0% 2,190 2,680 - 18.3% 1,098
trading revenues 691 -2,555 - 127.0% 46 476 - 90.3% -1,384
non-trading revenues 9,342 9,030 + 3.5% 2,143 2,204 - 2.8% 2,482
Operating costs -3,309 -3,484 - 5.0% -828 -833 - 0.6% -881
Operating profit 6,724 2,991 + 124.8% 1,361 1,846 - 26.3% 217
Net write-downs on loans -4,464 -2,144 + 108.2% -1,177 -1,142 + 3.0% -1,076
Profit before tax 1,555 690 + 125.5% 98 476 - 79.4% -815
Operating income totaled €10,033m with an increase of €3,559m over the previous year (+55% y/y) with
a positive impact on both net interest income, which was up by €478m (+7% y/y), and on net noninterest
income, which rose by €3,081m. This increase was primarily driven by growth in income from
financial transactions, and by more favorable market conditions than in 2008. At the same time, fee
contribution was weak since it suffered primarily from a reduction in cash management transaction
volume, which is more heavily correlated to the recessionary performance of the economic cycle.
Operating costs totaled €3,309m, a decline of €175m (-5% y/y). This decrease was driven by the
reduction in staff expenses (due in part to the rationalization of the business following the
implementation of the new operating model that resulted in a reduction of over 1,000 FTEs) and by the
continuing tight controls over other administrative expenses, which were down 8%.
Impairment losses on loans rose sharply compared to 2008 and totaled -€4,464m (+108% y/y) due to
the overall deterioration in many loan positions. In consideration of the intensity of the current economic
crisis and increased risks, with the resulting deterioration of loan quality, the measures taken at the end of
2008 to manage and monitor credit risk were reinforced in 2009 using shared and coordinated
management strategies, especially in an attempt to anticipate and manage any deterioration situations.
Balance Sheet (€ million)
AMOUNTS AS AT
CHANGE ON DEC '08
12.31.2009 09.30.2009 12.31.2008 AMOUNT %
CORPORATE & INVESTMENT BANKING
Loans to customers 290,514 302,997 330,120 -39,606 - 12.0%
Customer deposits (incl. Securities in issue)
(1)
139,712 142,534 189,260 -49,548 n.s.
Total RWA 253,115 254,345 278,371 -25,256 - 9.1%
RWA for Credit Risk 235,149 233,676 251,805 -16,656 - 6.6%
(1)
The change from previous year 2008 is not meaningful due to perimeter change occurred in 2009 on some of the issues bonds
The Risk Weighted Assets dynamics showed that at the end of 2009 total RWAs were down by 9% from
the end of the previous year. Specifically, credit risks dropped from €251.8bn in 2008 to €235.1bn at
year end 2009. These results are a reflection of the selective risk reduction policy implemented by
UniCredit. This decrease, which can also be seen in the volume of loans provided to customers (-12%), is
in fact due to a thorough modification of the customer portfolio in the context of a broader strategy to
reduce the Group's leverage. In this context, it also makes sense a selective credit approach was
performed.