Strong quarterly Group performance with €712 m Net Profit (+58.8% Y/Y) which equates to a RoTE of 7%, achieved without compromising on the Group’s prudent risk approach. Group Asset Quality improving with Gross Impaired Loans declining for the first time since the beginning of the crisis in 2008 (-€1.1 bn or -1.3% Q/Q) and coverage ratio confirmed at 52.4%, the highest among Italian banks and in line with best European peers. Sound balance sheet with Total Assets of €841.6 bn (+1.7% Q/Q), Tangible Equity of €42.1 bn (+1.8% Q/Q), stable Leverage Ratio at 18.4x and Funding Gap at €32.2 bn. Funding Plan executed at 36% to date. CET1 ratio Basel 3 fully loaded at 9.5% and CET1 ratio transitional at 9.9%; Total Capital Ratio transitional at 14.2%, also thanks to the successful placement of USD1.25 bn AT1 in 1Q14. Core Bank’s Net Profit at €1.0 bn, driven by resilient revenue generation and declining costs with Commercial Bank Italy being the largest contributor. Core Bank’s Net Interest Income strongly up (+2.9% Q/Q, +4.6% Y/Y at constant FX and days effect) thanks to the re-pricing of loans and deposits. Strong revamp in new lending volumes in Italy with €2.7 bn (+14.3% Q/Q, +63.2% Y/Y) granted to enterprises and households, with new mortgages up by 31% Q/Q, +153% Y/Y. Cost containment efforts allowed significant savings in the Core Bank with Total Costs landing to €3.3 bn (-7.2% Q/Q and -1.9% Y/Y) mainly thanks to commercial banks’ network restructuring in line with the Strategic Plan 2013-18. All divisions positively contributed to Core Bank’s results: Commercial Bank Italy’s Net Profit at €0.5bn sustained by revenues (+8.7% Q/Q) and costs (-0.8% Q/Q); CIB registered a high RoAC at 22% in the quarter sustained by low LLPs; CEE & Poland Net Profit at €0.3 bn, thanks to Central Europe and South Eastern Europe; Asset Management AuM reached €179 bn, supported by €3.2 bn net sales; Asset Gathering TFA reached €79.2 supported by €2.2 bn net sales. Non-Core portfolio run-down progressing well, with gross loans at €83.6 bn in 1Q14 (-€2.0 bn Q/Q and -€8.3 bn Y/Y). The IPO process of FinecoBank is on track, with the request for the admission to list and trade on the Mercato Telematico Azionario filed with Borsa Italiana on April 16th. The listing will facilitate the unlocking of the full potential of FinecoBank encouraging its growth and further optimizing the capital of UniCredit. FinecoBank showed a strong performance in 1Q14, with TFA of €45.6 bn (+€2.0 bn Q/Q), net sales of €1.1 bn in 1Q14 (+72% Q/Q) and Net Profit of €37 m (+37% Q/Q).

The Board of Directors of UniCredit approved the 1Q14 results on May 12th. Federico Ghizzoni, CEO of UniCredit commented: "The remarkable results achieved in the first quarter confirm the effectiveness of our strategy and demonstrate that the Group is heading in the right direction. Our target net profit 2014 of around €2 billion is now closer. In line with the Strategic Plan, we are working hard to achieve sustainable profitability across all divisions and geographies through a business model which is close to our customers’ needs. Thanks to the growth in revenues and a structural decline in the cost base, also Italy posted a positive result strongly supporting Group’s net profit. UniCredit reached these results though preserving a sound capital position and a coverage of impaired loans which is the highest among Italian banks and in line with best European peers. For the first time since 2008, the stock of gross impaired loans is decreasing. New loans origination is revamping, mainly in Italy. This allows us to look at the future with confidence, with the belief that we are best positioned to support the economic recovery that is starting to materialise.”

1Q14 key financial data: Group

Net Profit: €712 m

Revenues: €5.6 bn

Total Costs: €3.5 bn

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